$9 Billion Fraud Alarm Hits Minnesota

Minnesota’s top Democrats are being hauled under oath to explain how billions meant for kids, the disabled, and Medicaid patients allegedly became a fraud magnet on their watch.

Story Snapshot

House Oversight Chairman James Comer scheduled Minnesota Gov. Tim Walz and Attorney General Keith Ellison to testify under oath on March 4, 2026, at 10 a.m. EST.
The hearing focuses on alleged fraud and money laundering across Minnesota social-service programs, with public estimates reaching roughly $9 billion.
Investigators and lawmakers say repeated warnings dating back years were ignored, while Democrats argue prosecutions are already underway and the hearing is political theater.
Federal scrutiny includes reviewing Suspicious Activity Reports tied to questionable transactions, while Minnesota also says it is auditing high-risk Medicaid areas.

Congress Puts Walz and Ellison on the Clock

House Oversight leaders set a March 4 hearing titled “Oversight of Fraud and Misuse of Federal Funds in Minnesota: Part II,” with Gov. Tim Walz and AG Keith Ellison slated to testify under oath. Republicans say the point is accountability for federal dollars routed through Minnesota’s welfare and health programs. The committee’s timeline includes prior testimony from Minnesota lawmakers in January and additional transcribed interviews expected to wrap in February.

Chairman Comer’s public statements frame the case as “rampant misuse” and focus on whether state leadership acted on warnings, protected whistleblowers, and implemented controls that would have stopped repeat schemes. Walz’s team has pushed back publicly, arguing the process resembles “circus hearings.” At this stage, the most concrete near-term fact is procedural: the hearing is scheduled, the witnesses are named, and Congress is demanding records.

Where the Alleged Fraud Hit: Child Nutrition, Autism Services, Housing, and Medicaid

Reporting and committee materials describe a broad set of programs touched by alleged fraud, including child nutrition reimbursements, autism support services, housing-related spending, and Medicaid. A key public estimate came from former U.S. Attorney Joe Thompson, who has said the total fraud may approach $9 billion out of roughly $18 billion allocated since 2018. That estimate is not a final court finding, but it explains why national oversight escalated.

Minnesota’s own audits and watchdog findings add weight to concerns about internal controls. A Legislative Auditor report and related coverage described compliance problems and misconduct within a behavioral health administration structure, including allegations of weak oversight and unreliable documentation. Separate state action has included auditing 14 high-risk Medicaid programs and appointing a new fraud-prevention lead, steps that suggest officials acknowledge systemic vulnerabilities even as they dispute partisan narratives.

What “Part I” Raised—and What Still Isn’t Proven Yet

The January “Part I” hearing featured Minnesota lawmakers and outside voices describing failures going back to at least 2012. Among the most explosive claims were allegations that some money flowing through fraud networks could have reached al Shabaab, a Somalia-based terrorist organization. That allegation is politically and morally serious, but the available reporting also indicates the federal government is still reviewing financial intelligence, including Suspicious Activity Reports, meaning definitive public proof remains limited.

That gap matters for conservatives who want real accountability, not headlines. Congress can spotlight warnings, process failures, and enforcement choices, but criminal culpability still depends on evidence, charging decisions, and court outcomes. The oversight posture is familiar: when government grows and disperses cash through complex programs, fraudsters move fast, and taxpayers are left paying twice—once for the program and again for the waste—unless controls and prosecutions keep up.

Whistleblowers, Retaliation Claims, and the Government-Overreach Trap

Republicans involved in the probe argue that warnings were ignored and that whistleblowers faced retaliation, a claim the March hearing is positioned to test through sworn testimony and document trails. Those allegations are not yet fully adjudicated in public, but they point to a basic constitutional concern: when bureaucracies punish internal critics, the public loses transparency, and lawmakers lose oversight. That pattern, if substantiated, undermines the accountability conservatives expect from government.

Keep the Pressure going!

We can't let this corruption slip by. Testimony isn't scheduled for nearly a Month.

Minnesota Gov. Tim Walz and AG Keith Ellison Set to Testify Before Congress About Massive Fraud Allegations https://t.co/yGYsq9m3f5 #gatewaypundit via @gatewaypundit

— RVGregoryZ (@gregory_rv62820) January 31, 2026

Ellison’s office has countered that Minnesota has already prosecuted hundreds of fraud cases and recovered tens of millions of dollars, while Democrats warn against politicizing enforcement or unfairly stigmatizing communities. The hearing now becomes a test of two competing claims: whether leadership acted aggressively once problems surfaced, and whether earlier decisions—or failures—allowed fraud to scale. Either way, taxpayers deserve hard numbers, clear timelines, and policy fixes that prevent recurrence.