Prosecutors believe criminals may have stolen up to $9 billion in federal aid meant for Minnesota’s social services. These programs were designed to help vulnerable people, but organized crime groups turned them into easy targets. What started as small scams during the COVID-19 pandemic has grown into a huge network that exploits the state’s safety net. Investigators keep finding new multimillion-dollar schemes almost every day.
This scandal shows deep problems in how aid money is managed and protected. Families who truly need support now face delays and doubts because of the theft. Law enforcement officials stress that the discoveries so far only scratch the surface of the damage.
Prosecutors Chase Down Crooks Daily
First Assistant U.S. Attorney Joe Thompson says finding big fraud cases has become an everyday task. “Every day, we look under a rock and find a new $50 million fraud scheme,” he explained. Federal prosecutors have charged 90 people so far, with nearly 60 convictions, that’s a 67 percent success rate, including wins in jury trials.
They have followed stolen money to luxury cars, homes by the lake, and properties overseas. Even with these wins, officials warn that this is just the start. The cases reveal a pattern of bold theft that has gone on for years, shaking trust in public aid systems.
How Scams Grew from Small Tricks to Big Crimes
The fraud began around 2018 but exploded when pandemic relief money poured in. The nonprofit Feeding Our Future became the main center of the schemes. There, 78 people, including founder Aimee Bock, faced charges for stealing $250 million. They did this by faking meal counts for children who did not exist.
State agencies ignored early red flags, which let the problem spread. Crooks then moved on to other areas like Medicaid health care, housing help, and therapy services. They set up fake businesses to bill for services that were never provided, hitting weak spots across the system.
Crooks Target Kids, Housing, and Health Aid
Fraudsters went after the Early Intensive Developmental Behavior Intervention program, which helps autistic children. In Minneapolis’s Somali community, providers allegedly paid kickbacks to parents and billed for therapy sessions that never happened. For instance, the Smart Therapy Center, run by Asha Farhan Hassan, filed $31.8 million in false claims.
Out-of-state criminals also joined in. Two men from Philadelphia grabbed $3.5 million from Housing Stabilization Services, seeing Minnesota as an easy target. These groups spread their schemes across 14 different programs, switching tactics whenever officials got too close.
Governments Fight Back, But Recovery Is Slow
A huge federal crackdown involves the FBI, Homeland Security, and ICE agents. Officials describe the current charges as just the “tip of a very large iceberg.” President Donald Trump froze child care funding because of the widespread fraud. On the state side, Governor Tim Walz stopped payments to risky Medicaid programs and brought in Optum to review claims by hand.
Walz also named a program integrity director and plans to use artificial intelligence to spot unusual billing patterns. So far, they have recovered $60-70 million, less than 1 percent of the stolen amount. Full repayment seems out of reach.
The scandal mostly involves Somali Americans, who make up 89 percent of the Feeding Our Future defendants. This has unfairly hurt the community’s image, even though federal officials say they target actions, not backgrounds. Critics blame seven years of poor state oversight, and a House Oversight Committee is now investigating possible retaliation against whistleblowers. Minnesota Inspector General James Clark told lawmakers that fraud turned into a “business model” because of these failures. As probes widen, more arrests are expected, forcing tough talks on fixing programs, easing taxpayer costs, and ensuring real help reaches those in need.
Sources:
“How Fraud Swamped Minnesota’s Social Services System,” The New York Times, November 29, 2025
“Minnesota fraud case is biggest among many multimillion-dollar pandemic scams,” CBS News, December 11, 2025
“Prosecutor: Billions Stolen From Minnesota Federal Aid Programs,” Newsmax, December 17, 2025
“U.S. Attorney estimates $9B may have been lost in Minnesota social services fraud,” YouTube/U.S. Attorney’s Office Press Conference, December 18, 2025
“Feds: Fraud total could top $9 billion,” Axios Twin Cities, December 19, 2025
“‘Tip of a very large iceberg,’ Feds surge response to Minnesota fraud investigations,” ABC News, December 29, 2025