Fraud is never acceptable.
Fraud in the news is often brought up as I talk with voters. Many lay the blame on Governor Walz, with the best spin in his favor that “he did not act quicky enough to fight it and stop it”. In an early blog post, I cited the MPR news video What’s the deal with fraud in Minnesota? The Feeding Our Future scandal explained as the best information I had seen up to that point.
Knowing this will be a major issue throughout the 2026 campaign in Minnesota, I decided to do a deep dive on the history of fraud and what the Governor Walz administration has done, which follows below.
This issue will not go away soon, with the results of the ongoing criminal trials and criminal investigations released bit by bit throughout the year and Republicans seizing this as their key issue of the 2026 campaigns against the state and local DFL candidates.
Here are my tentative conclusions:
- The efforts of the Governor Walz administration to stop the fraud were actually considerable, although they may not have received the attention in the media or the public as did the revelations of the fraud themselves.
- There were numerous factors that slowed the MN Department of Education and the Department of Human Services to effectively deal with the fraud.
- Governor Walz was slow to say the equivalent of “the buck stops here” until on or about October 25, 2025. (Or at least I could not find any earlier indications.)
- There were missed opportunities to act faster in not only catching the criminals but also to stop the money going out in the first place.
- In retrospect (i.e., Monday morning quarterbacking), I am sure Governor Walz wishes he had owned the problem sooner and pushed sooner and harder to root out the fraud. But it is easy to be critical and harder to actually be constructive.
In July 2019, prior to the Covid-19 pandemic, Minnesota state officials spotted early signs of fraud, but they quickly faced pressure from leaders of the charitable group Feeding Our Future to stop asking questions, according to multiple former employees at the Minnesota Department of Education.
Well before the pandemic, state officials told CBS News that they began experiencing tension with the woman later convicted of masterminding the fraud, Aimee Bock. They began documenting her “concerning behavior.” One former employee told CBS News that Bock almost immediately began pressuring state workers who might have had follow up questions or concerns before processing reimbursements.
Then the pandemic took hold. The officials told CBS News the scheme rapidly accelerated. Safeguards fell away — removed intentionally to ensure residents in need did not go hungry.
In March 2020, because of COVID, federal Child Nutrition Programs (begun in 2017) money became available to feed children who were now learning at home via national waivers:
- Mealtime Flexibility (March 20, 2020).
- Non-congregant dining (March 20, 2020).
- Community Eligibility guidelines (March 25, 2020).
- Meal Pattern (March 25, 2020).
- Parent Pickup (March 25, 2020).
In June 2020, Feeding Our Future began operating the Summer Food Service Program.
In the summer of 2020, the Minnesota Department of Education grew suspicious of Feeding Our Future’s rapid expansion and high volume of meal claims and reached out to the USDA Midwest Regional Office seeking advice and support.
In October 2020, MDE escalated the issue to the USDA Office of the Inspector General. MDE claims they got nowhere with the office and contacted the FBI.
In October 2020, MDE terminated Safari Restaurant’s participation in the Federal Child Nutrition Program effective October 31, 2020. During this same time frame, MDE utilized a multi-step review process for approving new sites to ensure that Federal Child Nutrition Program funds were being used properly.
In November 2020, Feeding Our Future (FOF) filed a civil lawsuit
in Ramsey County District Court against the MN Department of Education. The original lawsuit was based solely on claims that the Department of Education violated federal regulations and laws prohibiting race discrimination, by failing to act on FOF’s applications for new food-distribution sites as part of its administration of the federal Child and Adult Care Food Program.
The lawsuit included a motion by FOF for an order to require the Department of Education to act on pending site applications. Before the court could rule, the parties reached an agreement in which the Department of Education agreed to handle these federally regulated site applications “reasonably promptly.” A consent order approving the settlement was issued on December 22, 2020.
In December 2020, MDE stopped approving Feeding Our Future’s new SFSP site applications. MDE denied dozens of Feeding Our Future site applications that month.
In January 2021, MDE conducted an audit of Feeding Our Future. This audit was triggered, in part, by suspicions about the large amount of Federal Child Nutrition Program money being received by Feeding Our Future and sites under its sponsorship.
The Department of Education suspended payments to FOF based on a “serious deficiencies” letter it issued to FOF on March 30, 2021.
Feeding Our Future responded by threatening and then filing a lawsuit, claiming discrimination and that the state was not promptly processing applications.
As a result, FOF filed a motion asking Judge Guthmann to order the Department of Education to resume payments and to pay sanctions.
Thereafter, the Department of Education voluntarily resumed making payments to FOF. The Department of Education was not ordered by the court to do so. (Note: incorrect claims were made by the MN Department of Education that the court had ordered MDE to do so, claims which have been rebutted by the judge in news release. According to the MN Attorney General’s News Release, “At the hearing on Feeding Our Future’s motion, the court told MDE it had “a big problem” with its decision to stop payments to Feeding Our Future. That hearing did not result in any written order from the court, so there was nothing to appeal. MDE and the Attorney General’s Office did not pursue the stop-pay through other legal channels because to do so would have risked having to disclose to Feeding Our Future MDE’s report of suspected fraud to the FBI and the subsequent federal criminal investigation.”
After the Department resumed voluntary payments, counsel for the Department of Education wrote to the court asking that FOF’s motion for sanctions based on non-payment be denied as moot because the Department voluntarily resumed payments. In a later court filing related to FOF’s separate motion for sanctions based on the failure to approve or deny 144 applications for new food delivery sites, the Department of Education advised the court that FOF’s serious deficiencies were resolved as of June 4, 2021. Of the 144 applications, 143 were denied, resulting in FOF’s separate administrative appeal.
In the spring of 2021, MDE contacted the FBI with its concern that Feeding Our Future was committing criminal fraud, and the FBI began to investigate. According to a September 26, 2022 News Release by MN Attorney General Keith Ellison, “Subsequently, representatives of Attorney General Ellison’s office met confidentially with the FBI on a regular basis to cooperate fully with the investigation. The FBI repeatedly made it clear to the Attorney General’s Office and MDE that it should not disclose the existence of the investigation in Feeding Our Future’s state court lawsuit so that it could proceed without tipping off Feeding Our Future and the target of the investigation.”
After MDE raised concerns about the number of new sites being sponsored by Feeding our Future and the increase in meal reimbursement claims, Feeding Our Future filed a lawsuit against MDE in Ramsey County, related to 143 site applications.
In June 2021, Ramsey County District Court Judge John Guthmann, ruled in favor of Feeding Our Future:
- MDE is in contempt for failing to process FOF applications.
- fines MDE $35,750 payable to FOF, citing MDE’s attempts to slow down application process.
- orders MDE to pay FOF’s attorneys fees in the amount of $11.750; and
- allowed FOF to file an amended complaint with an allegation of defamation
Through the remainder of 2021, FOF continued to attempt to restrain the MN DOE from denying applications and stop making payments:
- July: FOF files another motion for contempt against MDE in the Ramsey County case because MDE rejected the 143 site applications that the FOF previously sued over for not being processed quickly enough.
- August: MDE grants FOF access to apply for additional sites based on Court’s rulings.
- September: FOF files additional discovery motions against MDE.
- October: FOF moves for another temporary restraining order and injunction.
- December: FOF files motion to compel production of additional documents in the Ramsey County case.
According to MN Attorney General Keith Ellisson, “The suspicions of fraud that MDE and the Attorney General’s Office presented to the FBI was the trigger for the FBI’s criminal investigation, which eventually involved hundreds of agents, investigators, and attorneys from the FBI, the U.S. Department of Justice, the IRS, and the U.S. Postal Service.”
On January 28, 2022, a search and seize warrant was issued by the U.S. District Court Judge vs. Feeding Our Future.
On September 20, 2022 federal criminal indictments were issued of 48 people, notably including Feeding Our Future founder Aimee Bock, for alleged fraud in the amount of $250 million.
June 7, 2024: Jurors convict 5, acquit 2 defendants in first Feeding Our Future trial.
Jun 13, 2024: Feeding Our Future audit finds Minnesota Dept. of Education’s oversight “created opportunities for fraud”.
A special review from the Office of the Legislative Auditor (Judy Randall) determined that the Minnesota Department of Education’s oversight of Feeding Our Future was “inadequate” and “created opportunities for fraud.”
The 120-page report details the ways in which the department failed to act on prior warning signs about the nonprofit and was ill-prepared to hold Feeding Our Future accountable, even when they were signs before the pandemic began.
Education Commissioner Willie L. Jett II testified to the Legislative Committee receiving the report that the department has made changes to strengthen its oversight, establishing an Office of Inspector General, adding a general counsel’s office, training staff on updated fraud reporting policy, and contracting with a firm to conduct financial reviews of certain sponsors.
The auditor’s office offered a host of recommendations, including that the department should take additional steps to verify information, conduct follow-up reviews and revise its complaint investigation procedures.
The legislature should also establish criteria or give the department the ability to create criteria that it must consider when determining eligible recipients for federal nutrition program funds, the report said.
January 3, 2025: Walz signs executive order to create a state fraud investigation unit
Gov. Tim Walz signed a new executive order in an effort to try and prevent fraud involving state government funds.
- The executive order created a centralized state fraud investigations unit aimed at detecting, investigating and punishing people who commit fraud in state programs based in the Minnesota Bureau of Criminal Apprehension under BCA Superintendent Drew Evans. This unit did not need legislative approval.
- The governor also proposed a wide range of initiatives that would need legislative approval, including using artificial intelligence (AI) to detect and prevent fraud sooner, additional employees in the Department of Human Services to focus on fraud detection and prevention and a new “theft of public funds” statute that increases criminal penalties.
KSTP July 15, 2025 report: The MN Department of Human Services (DHS) began to suspect fraud in Minnesota’s autism program which began a decade earlier. The program pays out Medicaid claims to clinics and organizations that provide early intervention treatment to kids diagnosed with autism. EIDBI reimbursements are payments from Minnesota Health Care Programs (MHCP) to providers for Early Intensive Developmental Behavioral Intervention services, covering therapies and support for kids under 21 with Autism Spectrum Disorder (ASD) or related conditions.
85 autism treatment centers (out of more than 450 autism centers) registered in Minnesota are under investigation by the state amid a new crackdown to root out fraud. Also, recently, the FBI raided various therapy centers suspected of millions of dollars in fraud in autism programs.
Shireen Gandhi, the temporary commissioner of DHS (appointed on February 3, 2025, replacing Jodi Harpstead, who stepped down from the role after serving as the commissioner for about five and a half years) said the state’s crackdown started in the fall of 2024, around the time the feds raided Smart Therapy in Minneapolis and Star Autism Center in St. Cloud.
Since then, many autism centers have been subjected to unannounced compliance visits from the DHS enforcement team. Gandhi said in January 2025 that “We are visiting every single one,” and that “they’ve already visited 270 locations since November 2024.”
DHS also rolled out a slew of new oversight measures in the summer of 2024. Autism providers are now required to undergo enhanced background checks, and the agency has designated all providers as “high-risk,” indicating the need for a more thorough screening process.
Perhaps the most significant new measure is a system to license autism centers, similar to daycares or other programs overseen by DHS. The commissioner must propose the licensing system by January 2027.
Records show that DHS has paid out claims totaling nearly $700 million since the program began a decade ago.
KSTP July 16, 2025 report: Feds serve search warrants related to alleged housing stabilization fraud scheme. Federal authorities executed several search warrants in connection with an investigation into purported Medicaid fraud through Minnesota’s Housing Stabilization Services (HSS) program.
HSS began in 2020 and was meant to help vulnerable people find permanent housing. According to a search warrant affidavit, Minnesota was the first state in the country to offer this benefit through Medicaid, and it was estimated to cost approximately $2.6 million per year. Five years later, HSS surpasses $100 million annually in billed services, with approximately 1,600 enrolled providers with about 21,000 enrolled recipients. HSS was shuttered entirely in October 2025.
Governor Tim Walz issued an executive order establishing an Office of Inspector General Coordinating Council under the leadership of the Minnesota Bureau of Criminal Apprehension to improve interagency fraud prevention and data sharing. This council brings together inspectors general from various state agencies and representatives from the BCA’s financial crimes unit.
This council is not the same as a statutorily created inspector general office within the BCA, but it is the closest recent development to an inspector general role associated with the BCA.
The Minnesota Department of Human Services has suspended payments to several providers under the state’s Integrated Community Supports (ICS) program. The Minnesota Department of Human Services’ ICS program helps with daily care and housing needs for over 1,000 vulnerable Minnesotans daily through a total of 260 ICS providers across the state.
More than 50 defendants have been convicted in connection to the massive Feeding Our Future fraud investigation since the first indictments came down in September 2022.
KSTP October 21, 2025 report: Walz says ‘organized crime’ to blame for extensive fraud in Minnesota
Gov. Tim Walz says his administration is focused on rooting out fraud and preventing it before it happens but says there is still likely more revelations of fraud to come.
Walz acknowledges there was so much federal and state money running through these programs that how it was being spent didn’t get the scrutiny it deserved.
“I think it’s an unfortunate situation, but yeah, I think you need to be more skeptical in this world,” he said. “I think the COVID pandemic and … the relaxing of the rules fostered this.”
On the Feeding Our Future scheme, he says state regulators should have done a better job of recognizing sooner the implausibility of some of these food sites allegedly serving thousands of children out of very small venues with no physical evidence the food was actually being disbursed.
“I think in retrospect now, if you have the resources — and I think we do have more of those now — yes, it does make sense to just go out there and see if someone is doing this,” Walz said. “Go out there and knock on the door and see if they’re doing it.”
As for criticism that he hasn’t done enough to hold members of his administration accountable, he points to major changes that have been made.
“We got new leadership, especially DHS (Department of Human Services) is the one where the most money is, so that’s where most of the criminals are,” Walz said. “I’m still concerned about some of these programs, but I think what I would assure Minnesotans is you’re seeing more of this now because we’re stopping them, we’re auditing.”
He’s also faced criticism for not showing enough support for creation of an Office of Inspector General separate from the executive and legislative branches. It passed on a bipartisan basis by a wide margin, 60-7, in the Minnesota Senate but didn’t get to the House floor for a vote. Some lawmakers say Walz didn’t support the idea.
Payments for more than a dozen Department of Human Services programs that bill through Medicaid will be subject to delays as the outside analytics consulting company Optum audits for suspicious billing activity14 DHS programs in a new approach to stop the bleeding.
Optum will verify all fee-for-service claims submitted by licensed providers, and any suspicious claims will be flagged for further review, temporary DHS Commissioner Shireen Gandhi said. DHS will strive to pay all legitimate claims within 30 days, but she cautioned that providers could have to wait up to the federal requirement of 90 days for payment on claims that are
flagged for further review. “If signs of fraud are detected, though, DHS will not pay the claim, and providers will be referred to our Office of Inspector General for investigation.”
DHS Inspector General James Clark said the 14 “high-risk” programs, listed below, were identified through investigations, tips, an assessment of weak spots and internal analysis:
- Housing Stabilization Services
- Early Intensive Developmental and Behavioral Intervention
- Integrated Community Supports
- Nonemergency Medical Transportation
- Peer Recovery Services
- Adult Rehabilitative Mental Health Services
- Adult Day Services
- Personal Care Assistance/Community First Services and Supports
- Recuperative Care
- Individualized Home Supports
- Adult Companion Services
- Night Supervision
- Assertive Community Treatment
- Intensive Residential Treatment Services
The “high-risk” designation for providers in these programs means they could be subject to mandated fingerprinting, background checks, screening visits upon enrollment and random site visits, Clark said.
DHS says Optum’s screening technology is geared toward stopping fraudulent claims from being paid out in the first place, using an “AI-enabled prepayment integrity program” to detect irregularities in billing claims. This will help identify issues like missing documentation, unusually high billing patterns and inconsistencies suggesting a claim may not have met program requirements.
“DHS has always had fraud detection and auditing functions, but they have largely been post-payment and program-specific for what I call ‘pay and chase,’” Clark said. “This moves our fraud detection efforts in an enhanced fashion upstream so we’re not paying and chasing.”
Last session, lawmakers passed legislation giving DHS $2.5 million specifically for prepayment review. Optum’s contract is for one year at $2.3 million, absorbing nearly all of those funds. DHS said it will evaluate Optum’s success after a year.
Gov. Tim Walz announced that Tim O’Malley will serve as the state’s new director of program integrity and will work with third-party experts at Minnesota-based WayPoint to implement a new statewide fraud prevention program.
WayPoint, a White Bear Lake-based firm of former law enforcement agents, specializes in forensic accounting and financial investigations. The company’s website says it’s completed thousands of investigations and crisis responses for businesses and individuals. Walz’s office says WayPoint will advise as the state develops consistent investigative and reporting policies, data sharing and specialized positions needed to prevent and cut down on fraud across state agencies.
CBS News December 13, 2025, report: Minnesota Gov. Walz unveils new fraud prevention program
On Friday, Walz said Minnesota’s “generosity” was “taken advantage of by an organized group of fraudsters and criminals,” and he’ll “take responsibility” for the failures that led to the massive COVID relief funding theft, admitting his office “should have been keeping Minnesotans more up to speed on what was happening.”
Tips to fraud committee not passed to DHS.
Rep. Kristin Robbins, chair of the Minnesota House Fraud Prevention and State Agency Oversight Policy Committee, shared on Wednesday that whistleblower tips that come to GOP leadership have not been forwarded on to the Department of Human Services.
Instead, Robbins said they’re being sent to other investigators, including the U.S. Attorney’s Office.
After the committee meeting, 5 EYEWITNESS NEWS asked Minnesota DHS Inspector General James Clark, who is tasked with stopping fraud in taxpayer-funded safety net programs, about the tips not being shared with his office.
“I want to work in partnership with anybody that is serious about tackling these issues,” Clark said. “If you have evidence, I can use to stop payments going to fraudsters, I would like that information.”
Assistant U.S. Attorney Joe Thompson said the Centers for Medicare and Medicaid Services (CMS) pulled claims for 14 programs identified by Minnesota officials as being particularly vulnerable to fraud and found $18 billion in Medicaid billing since 2018.
While not all of those payments were illegitimate, Thompson estimated “half or more” of the $18 billion was received through fraudulent means, though he said prosecutors are still working to find the exact number.
‘No indication’ fraud money went to al-Shabaab
The Minnesota Department of Human Services announced Tuesday it will soon pause licensing of new adult day care centers as the Walz administration expands its probe of fraud in human services programs.
The agency said the licensing pause will likely last for two years — from Feb. 1, 2026, through Jan. 31, 2028 — and will allow regulators to focus on oversight of existing licensed providers. The agency may make exceptions for new providers in working with counties, tribes and managed care organizations.
This is the second time DHS has leveraged its new authority — granted by the Legislature earlier this year — to pause licensing if it finds new applications are growing beyond program needs. More licensing pauses are likely on the way, DHS Inspector General James Clark said.
DHS has recovered “several hundred thousand dollars” from adult day centers in recent years and referred more than 100 providers across Medicaid-funded service programs to law enforcement for criminal investigations this year, Clark said.
DHS catalogued in a press release the steps they’ve taken to address fraud this year, including terminating Housing Stabilization Services, hiring the health care company Optum to audit billing in 14 “high-risk” services and pausing licenses for Home and Community-based Services, which include group homes for people with disabilities.
The agency has also disenrolled around 800 inactive providers in “high-risk” programs and moved 11 Medicaid benefits into a “high-risk classification,” which allows regulators to increase scrutiny including through unannounced site visits and other oversight actions.
Summary of total amount of fraud:
Assistant U.S. Attorney Joe Thompson estimated “half or more” of the $18 billion was received through fraudulent means but has provided no evidence to support that estimate.
Feeding Our Future claims are estimated to be between $250 million to $300 million; Medicaid reimbursements for the federal Housing Stabilization Services program exceed $100 million; and autism centers could exceed $200 million. Investigations into those schemes are all still ongoing, with exact totals still unclear.
Walz disputes the estimated total cited by Joe Thompson, but only time, investigations and trials will ultimately determine the amount. Little is expected to be recovered. Whatever the amount, it is too much and unacceptable.
Citations:
- Minnesota District Court statement on Feeding Our Future v. Minnesota Department of Education.
- Minnesota Senate Committee Timeline (April 4, 2022, PDF).
- Minnesota Attorney General Press Release (Sept. 26, 2022).
- S. District Court Search and Seizure Warrant, January 14, 20202.
Other links are embedded in the text. My apologies where I have not done a perfect job in quoting exactly as the news articles published and/or copied and pasted various sentences from their reports.