A staggering $9 billion may have been stolen in Minnesota’s sprawling social-services scam orchestrated mainly by members of its Somali community — a figure nearly equivalent to the entire economy of Somalia.
The enormous new estimate is a nearly nine-fold increase from the swiped $1 billion previously suspected, according to federal prosecutors.
It also accounts for roughly half of the $18 billion in total federal funds provided to the Minnesota-run services since 2018, the feds said — as Democratic Gov. Tim Walz continues to take heat for his handling of the debacle.
By comparison to the $9 billion figure, Somalia’s entire GDP was under $12 billion last year, according to the World Bank.
“The magnitude cannot be overstated,” First Assistant US Attorney Joe Thompson said Thursday of the tentacles of the fraud. “What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering, industrial-scale fraud.
“Every day, we look under a rock and find a new $50 million fraud scheme.”
The scheme saw dozens of people — the vast majority from Minnesota’s Somali community — setting up businesses and non-profits that claimed to provide services such as housing, food or healthcare assistance and then billing the federally funded state programs for the non-existent services.
The fraud was so enormous that it went beyond the over-billing tactics typically seen in similar fraud cases and instead saw people setting up entire operations — sometimes coming from out of state — to get in on the goldrush of fraud opportunity, Thompson explained.
Charges for six more people allegedly involved in the scheme were announced Thursday, bringing the total number of defendants up to 92.
Among the latest defendants were two people who engaged in what Thompson called “fraud tourism” by allegedly travelling from Philadelphia to set up a bogus housing aid program after spotting an opportunity to make “easy money” off Minnesota’s programs.
Anthony Waddell Jefferson, 37, and Lester Brown, 53, allegedly visited Minnesota shelters and affordable housing to establish a reputation as local “housing guys” with an aid business, then hired a network of family members and associates to write up fake client notes and submit them to the state for reimbursement.
In total, they submitted $3.5 million worth of claims with the state’s Housing Stability Services Program and claimed to help around 230 clients, according to prosecutors.
Another recently charged suspect was Abdinajib Hassan Yussuf, 27, who allegedly set up a youth autism foundation which claimed to provide therapy for children on the spectrum.
In reality, Yussuf allegedly paid local parents to sign their kids up for the program regardless of their mental conditions and then billed the state for fake services provided.
Yussuf’s program obtained about $6 million in reimbursements, prosecutors alleged.
Another defendant — 28-year-old Asha Farhan Hassan — allegedly participated in another autism scheme that made off with $14 million in bogus reimbursements while also pocketing just under $500,000 for participating in a separate scam preying on Minnesota’s food program Feeding Our Future.
“Roughly two dozen or so Feeding Our Future defendants were getting money from autism clinics,” Thompson said. “That’s how we learned about the autism fraud.”
The scandal began unraveling around 2022 when Feeding Our Future came under scrutiny, but it was only in recent months that the full scope of the alleged fraud began to come into focus.
Much of the funds were sent overseas or else were spent on luxury cars and other lavish items.
So far, 57 people have been convicted.
The scheme prompted a White House crackdown on immigration in Minnesota, with President Trump calling Somalis “garbage” and Walz “retarded” in November for the scheme that unfolded largely under his watch.
Walz — who is running for re-election in 2026 and was former VP Kamala Harris’ presidential running mate in 2024 — has defended his handling of the scandal.
“We will not tolerate fraud, and we will continue to work with federal partners to ensure fraud is stopped and fraudsters are caught,” he said Thursday.
With Post wires
The post Minn.’s Somali social-services scammers may have stolen $9 billion — nearly Somalia’s entire economy appeared first on New York Post.
