When federal prosecutors revealed troubling details in December about a sprawling fraud ring in Minnesota, the White House quickly vowed a “relentless assault” to stop the theft of taxpayer funds.
“Our country has been losing over half a trillion dollars to fraud every single year,” President Trump claimed during a speech the following month, adding that “those days are over.”
The Trump administration has since turned its anti-fraud campaign largely into a tool for political retribution. Without the permission of Congress, the federal government has tried to hold up billions of dollars for programs that Mr. Trump has long disfavored, including those that provide child care, housing and groceries for the poor. And the White House has meted out some of its harshest punishments for states led by Democrats, particularly the president’s rivals.
Mr. Trump’s tactics and motivations are apparent in a battery of public statements, letters, internal memos and court filings viewed by The New York Times. They cast doubt on the president’s claims that the chief goal of his fraud crackdown is to save taxpayers money and help balance the budget.
Instead, Mr. Trump has coupled the new politically charged scrutiny with steep cuts to the parts of government that historically try to ferret out fraud. The president in his second term has tried to fire, defund or otherwise impede dozens of nonpartisan investigators, including those who have previously scrutinized his administration.
He has also pardoned political allies who have been charged with fraud in programs that he now seeks to protect. Some of those pardons concern crimes that allegedly bilked Medicare and Medicaid, according to prosecutors’ court filings, which peg the possible losses to taxpayers into the hundreds of millions of dollars.
Mark Greenblatt, who served as an inspector general for the Interior Department until he was fired by Mr. Trump in 2025, said that it is “welcome” when any administration uses the levers of government to protect taxpayers’ interests.
Mr. Greenblatt added, however, that in the president’s latest efforts “there are some very troubling signs, and very troubling events over the past year, that I think should send up red flags for the American people.”
In a statement, Abigail Jackson, a spokeswoman for the White House, said that the administration “remains committed to stopping fraud and the president’s only motivation is protecting the American people from nefarious fraudsters who seek to steal and exploit.”
Multiple federal agencies declined to comment or did not respond to requests for comment. Ms. Jackson added that their efforts had “already been fruitful,” citing “ongoing investigations and important actions to ensure American dollars aren’t being stolen.”
‘Somewhat Suspicious’
Even in a highly divided Washington, Democrats and Republicans have long shared a contempt for waste, fraud and abuse. But the task to eliminate it took on new urgency in the aftermath of the coronavirus pandemic, when the U.S. government unleashed $5 trillion in emergency aid that enticed grift and theft.
The inquiry in Minnesota arose amid that crisis, as federal prosecutors under President Joseph R. Biden Jr. uncovered a sprawling network that bilked $240 million in aid to feed low-income students. The investigation would come to widen considerably, and by December, preliminary estimates found the losses may have amounted to about half of the $18 billion in total taxpayer funds spent on 14 programs funded by Medicaid since 2018.
Mr. Trump quickly seized on the expanded allegations to attack Democrats, including Gov. Tim Walz of Minnesota, and to embark on a review covering a vast set of other federal accounts.
In early January, the Trump administration announced it would freeze about $10 billion in federal child care funds to Minnesota and other states, claiming the money was at risk of fraud. Mr. Trump then promised additional actions against California, whose Democratic governor, Gavin Newsom, is a frequent target of the president’s ire.
The administration also began scrutinizing public-housing assistance, and it threatened to choke off funding to states unless they surrendered detailed personal records about millions of poor people who receive food stamps. The White House later instructed nearly every federal agency to inventory other sources of money sent to more than a dozen states, including Colorado, California, New York and Virginia.
The review was meant to “facilitate efforts to reduce the improper and fraudulent use of those funds,” according to a memo viewed by The Times. Like most of its announcements, however, the White House memo almost exclusively concerned states with Democratic governors, whom Mr. Trump has frequently tried to punish by denying congressionally authorized aid.
Gov. Jared Polis of Colorado, a Democrat, described Mr. Trump’s tactics as “somewhat suspicious.” He said in an interview that many states probably would have been willing to “align ourselves with real efforts to go after fraud.”
The federal government’s own data make clear that fraud in benefit programs affects red and blue states alike, including Republican-led Florida and Texas. As a result, Democratic-led states caught in Mr. Trump’s crackdown have fought his punishments vigorously, accusing the president of political motives.
With food stamps, for example, state officials in late January sharply resisted the new federal demands for six years of intricate records about the roughly one in eight Americans enrolled in the Supplemental Nutrition Assistance Program, or SNAP, which has been frequently targeted by Mr. Trump for cuts.
In an ongoing lawsuit, two dozen states led by Rob Bonta, the Democratic attorney general of California, told a judge that the demand raised privacy and security concerns, and that it could double as a “Trojan horse” that could empower Mr. Trump’s work to deport immigrants.
In an interview, Mr. Bonta said Mr. Trump’s actions suggested that he wasn’t trying to combat fraud but that he sought “data to fuel their mass surveillance machine.”
Brooke Rollins, the agriculture secretary, has previously described fraud in SNAP as “rampant.” Lawyers for U.S.D.A. told the court last month that some states had already turned over records, which it first sought last year.
In other cases, the Trump administration has failed to furnish detailed evidence to justify its focus on Democratic-led states. That became apparent in late January, when a judge heard a separate challenge brought by some of the same states against a freeze imposed on child care funding.
Lawyers for the Justice Department at first insisted that the administration had never instituted a freeze, despite announcing one publicly. They later said they could not answer questions about the reasons they had targeted only five Democratic-led states.
The responses appeared to perplex Judge Vernon Broderick, of the U.S. District Court for the Southern District of New York, who questioned if the administration had put the “cart before the horse.” He temporarily blocked the Department of Health and Human Services from putting into place its policy.
Absent that order, federal aid could have been halted under programs including Temporary Assistance for Needy Families, which serves low-income households. Republican-led states did not appear to be affected by that freeze, even though one — Mississippi — had found itself under scrutiny years earlier for substantial fraud.
The Biden administration had ordered Mississippi to pay a roughly $100 million penalty. But Mr. Trump’s Health and Human Services Department halted that order in April. Only last week did the agency indicate that Mississippi could still face punishment, according to a letter viewed by The Times. HuffPost reported earlier on the letter.
‘Red Flags’
By one measure, the United States loses about $233 billion to $521 billion annually to fraud, according to Rebecca Shea, the director of forensic audits and investigative service at the Government Accountability Office. That amounts to roughly 3 percent to 7 percent of federal spending, she estimated, adding that such losses are in line with what other countries experience. (The figure does not include inaccurate payments or wasteful programs.)
In his second term, Mr. Trump has adopted a broad view of the problem, evident in the work of the Department of Government Efficiency, which shuttered entire agencies, fired droves of workers and halted billions in spending, often on the disputed premise that much of it was wasteful. In the end, however, it saved little money.
Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, which supports deficit reduction, said that DOGE had “successfully put waste, fraud and abuse centrally on the agenda.” But she also acknowledged that it left a “legacy of massive concerns that DOGE itself went after the wrong areas of the budget to surface those savings.”
Mr. Trump has forged ahead with cost cutting while simultaneously attacking federal officials that keep close watch over taxpayer money, including G.A.O. The president and his aides have tried to discredit or block its investigations, which have repeatedly found that the White House itself had violated the law by exerting excessive control over spending.
The standoff appeared to intensify in December and into January, even as Mr. Trump redoubled his commitment to rooting out waste. Privately, the accountability office raised alarm that at least one agency, the Commerce Department, had blocked its investigations into programs that put into place the president’s trade agenda and dole out money for infrastructure, according to letters viewed by The Times.
A White House official, who spoke on condition of anonymity to describe private discussions, said the administration did not have to comply because the G.A.O. inquiries had been requested by congressional Democrats, who are serving in the minority.
The refusal to cooperate continued a pattern under Mr. Trump, who within days of his inauguration fired more than a dozen inspectors general, a set of officials who had been instrumental in uncovering extensive fraud during the pandemic. His administration has also sought at times to block funding for some of their work.
Mr. Greenblatt, one of the fired watchdogs, said that alone sowed doubt as to “whether the administration wanted to root out waste fraud and abuse throughout the federal government.”
Instead, Mr. Trump has announced a new, high-level fraud division within the Justice Department. Last week, he said it would be overseen by Colin McDonald, a D.O.J. lawyer whom the president described on social media as a “Highly Respected AMERICA FIRST Federal Prosecutor.”
The way that Mr. Trump established the unit spurred immediate concern from observers, after Vice President JD Vance initially said it would be “run out of the White House.” Legal experts soon questioned if its work would be politicized, citing instances in which the administration had levied fraud accusations against Mr. Trump’s political rivals.
“It is very dangerous to have prosecutions driven by politics,” said Elizabeth G. Oyer, who served as the top Department of Justice pardon attorney from 2022 to 2025.
Ms. Oyer said the creation of the unit came as the president pardoned convicted perpetrators of fraud, perhaps undermining federal prosecutors.
In May, for example, Mr. Trump pardoned Lawrence Duran, who was sentenced in 2011 for orchestrating what federal officials described at the time as a “$205 Million Medicare Fraud Scheme.”
The president also pardoned Paul Walczak, a nursing home executive and top donor, who had been awaiting sentencing on charges related to tax fraud. And Mr. Trump pardoned Robert Harshbarger Jr., the husband of a Republican congresswoman, who had pleaded guilty to health care fraud that had cost Medicare and Medicaid, according to an indictment.
Explaining the pardons, a White House official claimed that Mr. Duran faced an overly harsh sentence as he had no prior convictions; that Mr. Walczak was targeted for his politics; and that Mr. Harshbarger did not harm any patients.
By Ms. Oyer’s count, however, Mr. Trump has essentially wiped away about $1 billion in penalties and restitution secured by federal prosecutors in fraud cases. That, she said, had further compromised the president’s renewed push to protect taxpayer dollars from theft.
“Certainly, Trump’s pardons have had a significant effect in undercutting efforts by his own Justice Department to recover money that’s owed to taxpayers and victims of crimes,” she said.
David A. Fahrenthold and Lisa Friedman contributed reporting.
Tony Romm is a reporter covering economic policy and the Trump administration for The Times, based in Washington.
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