2,000 Federal Agents Descend On Minnesota—Over 1,000 Arrested In Sweeping Crackdown

The Department of Homeland Security deployed 2,000 federal agents to Minnesota’s Twin Cities in early January 2026, launching the largest fraud enforcement operation in state history.

Prosecutors estimate between $9 billion and $18 billion may have been stolen from Minnesota social services programs since 2018. The unprecedented crackdown has resulted in 98 criminal charges, 64 convictions, and triggered Governor Tim Walz’s withdrawal from his 2026 reelection campaign.​

“Industrial-Scale Fraud” Exposed Across 14 Programs

First Assistant U.S. Attorney Joe Thompson characterized the crisis as “staggering industrial-scale fraud” that is “swamping Minnesota and calling into question everything we know about our state”.

Federal investigators identified systematic criminal activity across at least 14 Minnesota-administered Medicaid programs, with prosecutors estimating “half or more” of approximately $18 billion allocated during this period was fraudulently obtained. ​

Feeding Our Future: $250 Million Pandemic Fraud Scheme

The largest confirmed case centers on Feeding Our Future, labeled by federal prosecutors as “the largest pandemic relief fraud scheme charged in U.S. history”.

The Minneapolis-based nonprofit fraudulently claimed more than 250 food distribution sites served 91 million meals to children—meals that largely never existed. Defendants created elaborate fake documentation including fabricated meal count sheets, falsified food purchase invoices, and attendance rosters filled with generated names of nonexistent children.​

Parking Lots Masqueraded as Feeding Sites

Empire Cuisine and Market, a small halal storefront in Shakopee, claimed to serve 18 million meals to children at more than 30 distribution sites.

Federal investigators discovered many purported feeding locations were nothing more than parking lots, vacant commercial spaces, or small storefronts physically incapable of serving the thousands of meals claimed daily. ​

Harsh Prison Sentences for Scheme Leaders

Abdiaziz Shafii Farah, identified as a Feeding Our Future scheme leader, received 28 years in prison and was ordered to pay $47 million in restitution.

Aimee Bock, the nonprofit’s executive director, was convicted in March 2025 on wire fraud, bribery, and conspiracy charges with sentencing pending. To date, 78 individuals have been indicted and 57 convicted in the Feeding Our Future case, with federal authorities recovering approximately $60-75 million in assets including cash, real estate, and luxury vehicles.​​

Housing Program Attracted “Fraud Tourism”

Federal prosecutors charged 13 individuals with defrauding Minnesota’s Housing Stabilization Services program, which was designed to help individuals facing housing instability.

Two Pennsylvania residents allegedly engaged in “fraud tourism”—traveling to Minnesota specifically to enroll companies in the program before returning home and submitting over $3.5 million in fraudulent claims remotely. ​​

Autism Therapy Centers Employed Unqualified Staff

Asha Farhan Hassan pleaded guilty to stealing $14 million through Smart Therapy Center, which billed Minnesota $31.8 million between 2021 and 2025.

Her company employed unqualified individuals—often 18- or 19-year-old relatives with no formal education beyond high school and no autism-related training—as “behavioral technicians”. Abdinajib Hassan Yussuf’s Star Autism Center obtained more than $6 million through fraudulent billings and kickback schemes, offering payments to parents who enrolled their children.​

SBA Suspends 6,900 Minnesota Borrowers

The Small Business Administration suspended 6,900 Minnesota borrowers collectively approved for approximately 7,900 loans totaling roughly $400 million in January 2026.

SBA Administrator Kelly Loeffler described the situation as “a complex scheme that was set up to defraud taxpayers, our federal government of needed funds that would have gone out during COVID for hungry families, for children, small businesses”. ​​

Multi-Agency Response Coordinates Federal Power

The Department of Justice has issued over 1,750 subpoenas, executed over 130 search warrants, and conducted over 1,000 witness interviews as of January 2026. The FBI deployed forensic accountants and data analytics teams while investigating potential links to elected officials.

The Department of Health and Human Services froze $185 million in federal child care payments to Minnesota, forcing providers to meet a January 9, 2026 deadline to provide funding records or lose federal support.

HHS Implements Nationwide Payment Reforms

HHS Deputy Secretary Jim O’Neill announced sweeping changes requiring states nationwide to provide “a justification and a receipt or photo evidence before we send money to a state” for all Medicaid-supported daycare claims.

The reforms extend beyond Minnesota as federal officials identified vulnerabilities in child care payment systems across multiple states. The policy shift represents the most significant overhaul of federal child care funding oversight in decades, fundamentally changing how billions in annual payments are verified and distributed.​

State Oversight Failures Created Fraud Opportunities

A June 2024 report by Minnesota’s nonpartisan Office of the Legislative Auditor found that the Department of Education’s “inadequate oversight” of Feeding Our Future “created opportunities for fraud”.

The department received approximately 30 complaints about Feeding Our Future between 2019 and 2021 but failed to take decisive action. When state officials raised concerns in 2020, Feeding Our Future countered with threats of lawsuits alleging racial discrimination, which “affected MDE’s decisions about the regulatory actions it did and did not take”.​

Viral Video Accelerated Federal Response

Conservative YouTuber Nick Shirley posted a 48-minute video in December 2025 investigating Minnesota child care centers that garnered 127 million views across social media platforms. The video showed Shirley visiting approximately a dozen Minneapolis daycare facilities, many appearing closed or unstaffed during business hours while continuing to receive government payments.

Senior Trump administration officials circulated the video internally, with the White House subsequently publishing an article on its official website outlining enforcement actions titled “Here’s What the Trump Administration Is Doing to Crush Minnesota’s Fraud Epidemic”.​

Congressional Hearings Examine State Accountability

The House Oversight Committee held its first hearing on Minnesota fraud on January 7, 2026, with a second scheduled for February 10 featuring invitations to Governor Walz and Attorney General Keith Ellison.

House Oversight Committee Chairman James Comer stated the hearings would examine “rampant fraud in Minnesota’s social services programs” and “the state’s failure to implement basic safeguards”. Three Minnesota Republican state representatives—Harry Niska, Walter Hudson, and Shane Mekeland—testified about their unsuccessful efforts to address fraud concerns through state legislation.​

Governor Walz Withdraws from Reelection Campaign

Governor Tim Walz announced January 4, 2026, that he would not seek a third term, citing the fraud crisis among factors influencing his decision. Walz had faced intense scrutiny over his administration’s oversight failures and delayed response to mounting evidence of systematic fraud.

The announcement came just three days after the House Oversight Committee scheduled hearings specifically examining Minnesota’s program integrity failures under his administration.​

Somali Community Faces Disproportionate Scrutiny

Eighty-five of the 98 individuals charged in Minnesota fraud cases are of Somali descent, representing 89% of defendants. The demographic concentration has sparked civil rights concerns, with advocates warning against stigmatizing an entire community based on the actions of criminal networks.

Representative Ilhan Omar, who represents Minneapolis and is Somali-American herself, stated fraud “is not a Somali problem or a daycare problem, but a financial crime problem”.​

Denaturalization Reviews Target Convicted Fraudsters

The Trump administration announced it is reviewing denaturalization cases for individuals convicted of fraud who obtained citizenship. White House Deputy Press Secretary Anna Kelly stated officials are “looking at” denaturalization for those who “came in legally and then defrauded the American taxpayer”.

Legal experts predict significant court challenges to any denaturalization efforts, noting the complex constitutional and procedural requirements for revoking citizenship, which typically requires proof that citizenship was obtained through fraud or material misrepresentation.​

Minnesota Child Care Centers Operating Despite Allegations

State inspectors found that nine Minneapolis child care centers featured in the viral video were “operating as expected” when officials conducted unannounced visits in early January 2026. The Minnesota Department of Children, Youth and Families stated the centers maintained current licenses, met staff-to-child ratios, and complied with health and safety standards during inspections.

However, state officials acknowledged inspections verify regulatory compliance at a specific moment and cannot determine whether providers previously submitted fraudulent billing claims for services not rendered.​

Housing Program Costs Exploded Before Termination

The Housing Stabilization Services program’s costs ballooned from an estimated $2.6 million annually when launched in 2020 to $104 million in 2024, with projections reaching $122 million for 2025. Federal prosecutors characterized the program as having “low barriers to entry” and minimal record-keeping requirements, making verification of services nearly impossible.

The rapid cost escalation and vulnerability to exploitation prompted the Minnesota Legislature to terminate the entire program in October 2025 rather than attempt comprehensive fraud prevention reforms.

Federal Recovery Efforts Reclaim Luxury Assets

Federal authorities have seized luxury vehicles, real estate properties, and cash totaling approximately $60-75 million in connection with the Feeding Our Future case. A federal judge cleared the path to seize millions in assets from Aimee Bock, including properties and luxury items purchased with fraud proceeds.

The Department of Justice continues pursuing forfeiture actions against defendants, with prosecutors seeking to recover as much stolen taxpayer money as possible through criminal restitution orders and civil asset forfeiture proceedings.​

Ongoing Investigations Promise Additional Charges

Federal prosecutors indicated the investigation remains active with additional charges expected in coming months as investigators analyze financial records from thousands of entities. U.S. Attorney Andy Luger stated in July 2025 that the fraud “could be double what it is today” as investigators uncover additional schemes across Minnesota’s social services programs.

The multi-agency task force continues examining potential connections to elected officials, overseas money laundering networks, and organized criminal enterprises that may have coordinated fraud activities across multiple programs.

Long-Term Implications for Federal Program Administration

The Minnesota fraud crisis has prompted fundamental reassessment of federal-state partnership programs nationwide, particularly those involving direct payments to service providers without real-time verification mechanisms.

Federal agencies are implementing enhanced monitoring systems, stricter eligibility requirements, and mandatory documentation standards for programs administered by state governments. The reforms represent the most significant tightening of federal program oversight since the aftermath of Hurricane Katrina revealed widespread fraud in disaster assistance programs, potentially affecting billions in annual federal payments across all 50 states.