If ordinary Minnesotans ran the same multi-program billing operation that has drained hundreds of millions—and by federal estimates possibly billions—from state and federal programs, they would already be under RICO indictment. The people who designed, funded, defended, and then looked the other way at the system that made the theft easy have so far faced nothing of the kind.
This is not one scandal. It is a business model that has been scaled across agencies for years.
The model is straightforward. Stand up or expand a benefit or service program with high volume and low real-time verification. Outsource delivery to nonprofits, LLCs, and “providers.” Accept enrollment, attendance, and service claims with minimal cross-checks against actual delivery. Treat aggressive oversight as a political risk rather than a duty. When red flags appear, keep the money moving. When prosecutors eventually charge the people who submitted the fake claims, frame the story as isolated bad actors or community targeting rather than a predictable result of the rules and incentives that were put in place and left in place.
The record shows the pattern repeatedly.
In 2009 the Office of the Legislative Auditor reviewed Personal Care Assistance services and stated the program remained “unacceptably vulnerable to fraud and abuse.” Spending had grown from $153 million to more than $400 million. Auditors found hundreds of cases in a single month in which the Department of Human Services paid claims for personal care assistants who allegedly worked more than 24 hours in a day. The warning was written. The structural problems were not fixed.
Child-care assistance followed the same trajectory. Multiple prosecutions documented overbilling, fake attendance, and kickback schemes. Explosive claims of $100 million annual losses and direct terror financing were not substantiated by the Legislative Auditor, but the underlying problems of weak controls and documented fraud cases were real and continued.
Then came the COVID-era and Medicaid expansions that put the model on steroids.
Feeding Our Future took roughly $250 million from a federal child nutrition program through ghost meal sites and fabricated rosters. Nearly 80 people have been charged; roughly two-thirds have been convicted or pleaded guilty. Ringleader Aimee Bock received a 500-month sentence and was ordered to pay more than $240 million in restitution. The nonprofit went from a few million in federal funds in 2019 to nearly $200 million in 2021.
Housing Stabilization Services was projected at roughly $2.6 million a year. It reached $104 million in 2024 before the state shut it down after federal investigators described it as extremely vulnerable to fraud. Recent convictions include a $3.6 million scheme in which services were not provided and employees were instructed to maximize billings to the hourly cap. “Fraud tourists” from other states traveled to Minnesota because the program was known as easy money.
The Early Intensive Developmental and Behavioral Intervention (EIDBI) autism program grew from roughly $600,000 in claims in 2018 to over $400 million by 2025. Federal prosecutors have charged schemes in the tens of millions, including cases involving kickbacks to parents, diagnoses without medical necessity, and billing for services never delivered. One defendant pleaded guilty to $14 million in such fraud and was also linked to Feeding Our Future.
Former Assistant U.S. Attorney Joe Thompson has stated that of the roughly $18 billion spent on 14 high-risk Medicaid programs since 2018, “half or more” may have been fraudulent—an estimate in the range of $9 billion. That figure is an assessment of scope based on patterns, not a total of proven losses in court. Proven and charged amounts across the major cases are already in the hundreds of millions and continue to grow. The common features are the same: explosive growth, weak verification, shell entities, inflated or fabricated claims, and proceeds used for real estate, vehicles, and overseas transfers.
Identity issues, duplicate or nonexistent enrollees, and billing for people who received little or nothing appear across these cases. Concentrated populations created by resettlement and high benefit eligibility rates made large-scale enrollment and billing easier once the low-verification rules were already in place. The operators who exploited those rules have been charged. The officials and agencies that maintained the rules after repeated auditor and investigator warnings have not.
This model has been weaponized against the people it was supposedly designed to serve. Hungry children, people with disabilities, and families who needed housing help were the cover. The money meant for them was diverted while legitimate providers and taxpayers absorbed the cost. When the programs collapsed under the weight of the theft, the vulnerable lost services. Average citizens who tried the same thing—fake invoices, shell companies, billing for work never done, laundering proceeds—would be treated as an organized criminal enterprise. In Minnesota’s political and bureaucratic system, the enterprise that built and protected the conditions for the theft has been treated as policy.
The difference is power, not conduct. Private citizens do not get to ignore written fraud warnings for years, keep the funding open after red flags, and then have the resulting prosecutions framed as something other than the predictable result of the system they maintained. That double standard is the protection racket.
Minnesota does not have to remain the place where this model thrives. A constitutional republic rests on the principle that public money is a trust, not a revenue stream for connected operators. Restoring that principle means real-time verification before payment, independent audits that cannot be buried, criminal accountability that reaches the people who designed and defended the weak controls, and an end to treating oversight as optional when the numbers look good for political purposes. Farmers, veterans, small business owners, and working families who pay the taxes and follow the rules have every right to demand that the same standard applies to everyone else.
The street-level operators who submitted the fake claims are being sentenced. The machine that made their work easy, lucrative, and low-risk for years is still running. That is the record. That is the choice still in front of Minnesota.
For more information or to follow Freedom Talk with Phil, visit https://parrish4mn.com or contact Phillip C. Parrish at phillip@parrish4mn.com, manager Heidi Wanty at heidi@parrish4mn.com, or (612) 460-1717.