A war of words has erupted in St. Paul after federal prosecutors dropped a bombshell estimate regarding Minnesota’s public coffers: they believe nearly $9 billion has been siphoned off through “industrial-scale” fraud in state-run Medicaid programs.
The staggering figure—alleged by First Assistant U.S. Attorney Joe Thompson last week—has turned the already heated debate over Minnesota’s financial oversight into a full-blown political firestorm for Governor Tim Walz.
The Allegation: “Half or More”
Thompson was direct during a press conference that left state officials reeling. He focused on 14 specific Medicaid services deemed “high risk,” which have paid out approximately $18 billion since 2018.
READ: ‘Political’ Kill Switch? Revolt At ’60 Minutes’ After Weiss Spikes Trump Deportation Story
“When I say significant amount, I’m talking on the order of half or more,” Thompson told reporters, suggesting the fraudulent activity could eclipse the previously shocking $250 million Feeding Our Future scandal. He described a system besieged not just by local bad actors, but by “fraud tourism”—schemers traveling to Minnesota specifically to exploit lax oversight before funneling cash overseas.
“It is swamping Minnesota and calling into question everything we know about our state,” Thompson added, describing the graft as “staggering.”
“Fraud Tourism” and Empty Shells
Federal investigators painted a picture of brazen theft. Among the examples cited were companies set up to provide services for children with autism or housing assistance for the vulnerable. Instead, prosecutors allege, these were often shell companies providing zero services.
In one glaring instance, two men from Philadelphia were charged with treating Minnesota’s Housing Stabilization Services program as “easy money.” They allegedly registered as providers, pocketed millions, and never set up a legitimate operation in the state. Prosecutors claim much of the stolen loot has been traced to real estate purchases in Kenya and other parts of East Africa.
READ: MAGA Movement Shows Strength In Diversity As Vance Champions Free Thought At Turning Point Summit
Walz Fires Back: “Speculation”
Governor Walz, currently serving his second term, vehemently rejected the $9 billion projection. In a tense response, he accused the U.S. Attorney’s Office of throwing out sensational numbers without the evidence to back them up.
“It’s speculating,” Walz said, seemingly frustrated by what he views as a lack of cooperation from federal agents. “To extrapolate what that number is for sensationalism… doesn’t really help us.”
State officials backed the Governor, arguing that while they have identified fraud in the “tens of millions,” the jump to billions is unfounded. Walz further claimed that his administration has been trying to stop payments to suspicious vendors but has been hamstrung by federal prosecutors who refuse to share details of ongoing investigations.
“They didn’t come in here and stop payments,” Walz countered. “I am the one that will fix it.”
READ: “We’re The Cool Kids”: Nicki Minaj And Erika Kirk Unite To Electrify Turning Point Summit
A Deepening Rift
The clash highlights a rare and public breach between a Democratic governor and a federal prosecutor’s office. While Walz insists his team has been proactive—hiring former FBI agents and shutting down vulnerable programs—the Feds argue the state’s response has been too little, too late.
With the Feeding Our Future verdict still fresh in the public’s mind, the prospect of a fraud scheme thirty times larger poses a serious challenge to the Walz administration’s narrative of accountability. As investigators continue to dig, the question remains: was it tens of millions, or was it, as Thompson fears, a $9 billion free-for-all?
Please make a small donation to the Tampa Free Press to help sustain independent journalism. Your contribution enables us to continue delivering high-quality, local, and national news coverage.
Sign up: Subscribe to our free newsletter for a curated selection of top stories delivered straight to your inbox.
