First Assistant U.S. Attorney Joe Thompson said the scale of fraud in Minnesota outpaces that of other states and puts services at risk for people who really need them.
While prosecutors typically see fraud manifest as providers overbilling, Thompson said during a news conference in Minneapolis that companies have been created to provide zero services while pocketing federal funds for international travel, luxury vehicles and lavish lifestyles.
“The magnitude cannot be overstated,” Thompson said. “What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering, industrial-scale fraud.”
The investigators’ new findings may bolster President Donald Trump in his claims that Minnesota is a “hub of fraudulent money laundering activity” under Gov. Tim Walz, who was the Democrats’ vice presidential nominee in last year’s presidential election.
More than 90% of the people charged in the major fraud cases announced before today were of Somali descent, according to the U.S. Attorney’s Office for Minnesota.
Five new defendants have been charged in connection with a Minnesota housing services fraud, Thompson said. Two of them pocketed $750,000 instead of helping Medicaid recipients find stable housing, he said. Prosecutors allege they used the proceeds to travel to international destinations, including London, Istanbul and Dubai.
One defendant submitted $1.4 million in fraudulent claims, using some of the funds to purchase cryptocurrency, Thompson said. Federal officials say he fled the country after receiving a subpoena.
The five charged include two Philadelphia residents who have been accused of “fraud tourism” after they registered as Minnesota providers, Thompson said, adding that for them the scheme was “easy money.”
