Since late last year, the Trump administration has unleashed an immigration crackdown in Minnesota, threatened to cut off billions of dollars in federal child care funding to Democratic-led states and intensified scrutiny of other federal money going to more than a dozen states.
The administration has linked all of those actions to a welfare fraud scandal in Minnesota. And in his State of the Union speech on Tuesday, President Trump went further, announcing a broader “war on fraud” to be led by Vice President JD Vance. Critics say the president is using the scandal as a tool to punish blue states.
What is the Minnesota fraud case about exactly, and how did it become a driving factor in the administration’s domestic agenda? Here’s what we know.
What is the fraud about?
Scores of people in Minnesota have been accused of stealing up to hundreds of millions of dollars from state programs meant to help the poor and vulnerable. Prosecutors say people cheated the government out of money by setting up companies that billed state agencies for millions of dollars’ worth of services that were never provided.
Working with state programs, these companies were supposed to use taxpayer money to help some of the neediest Minnesotans — feeding hungry children, providing therapy to autistic children and assisting people at risk of becoming homeless. Prosecutors said the owners of these companies had spent the money on things like luxury cars, houses and real estate projects.
How far does this go back, and how costly has this been?
The first arrests in the set of fraud cases the F.B.I. is investigating happened in September 2022. That’s when the Justice Department, under the Biden administration, charged 48 people with stealing $240 million for exploiting a child nutrition program during the pandemic, a period in which there was a wave of scams involving federal money.
But over time, investigators found that the fraud went deeper. A recent assessment by federal prosecutors suggested that since 2018, more than half of the $18 billion in taxpayer funds spent on 14 state programs in Minnesota was most likely stolen.
So far, nearly 100 people have been charged, and at least 60 people have been convicted. Others are awaiting trial or have fled the country.
How is this connected to the Somali community?
The vast majority of people who have been charged to date are of Somali descent. Most are U.S. citizens or legal permanent residents.
Minnesota is home to the largest diaspora of Somalis in the world, a community of some 108,000 people. Many Somali Americans there said the actions of some people have unfairly damaged the reputation of the entire community, at a moment when their political and economic standing was on the rise.
How is this connected to the recent immigration crackdown in Minnesota?
Cities around the country have taken their turn in the spotlight of President Trump’s immigration enforcement campaign. And late last year, the president made Minnesota the focus of his administration’s crusade after a series of news articles and a viral video about the fraud scandal drew national attention. While most Somalis in the state are in the country legally, immigration agents have questioned and detained many of them in recent weeks.
Overall, the Department of Homeland Security has said that it arrested more than 4,000 undocumented immigrants during the surge, which the agency said this month that it would wind down, but the number of those arrested from Somalia was unclear.
In a social media post, Mr. Trump claimed that Somalis were “taking over” Minnesota, and he has used inflammatory language in castigating that group. He also called Minnesota “a hub of fraudulent money laundering activity” and said that Somali perpetrators should be sent “back to where they came from.”
What does the viral video have to do with this?
In late December, after the immigration crackdown in Minnesota began, a viral video by Nick Shirley, an influencer aligned with the MAGA movement, claimed to show extensive fraud at Somali-run child care centers in Minnesota. Top Trump administration officials and Minnesota Republicans praised the exposé, even though it did not conclusively present evidence of fraud.
In early January, the Trump administration said it was ramping up the immigration enforcement operation by sending in even more agents. During the peak of the operation, the total was said to be around 3,000.
Soon after, Gov. Tim Walz announced he would not run for re-election because of the widening fraud scandal, saying that he needed to focus his attention on that.
How has the scandal influenced other Trump moves?
In early January, the Trump administration, without the permission of Congress, froze $10 billion in funding to Minnesota and four other states also controlled by Democrats. That money was slated to support child care subsidies and low-income families. The administration claimed that widespread fraud had occurred throughout those states, but did not provide any evidence beyond the Minnesota schemes. After the states sued to stop the freeze, a judge agreed to block the order while the case proceeds.
Also in January, the administration threatened to stop funding public-housing assistance to states unless they provided personal records about millions of poor people who receive food stamps.
Mr. Vance also said that the Justice Department would create a high-ranking position that would be “run out of the White House” and answer directly to himself and President Trump with broad authority to investigate fraud across the country. On Wednesday, Mr. Vance announced that more than $250 million in funding for Medicaid in Minnesota would be paused because of fraud concerns.
The White House says that the administration is intent on protecting Americans from people stealing from the government. But critics of the president say he and Minnesota Republicans are using the scandal as a tool for retribution and a pretext to curtail social programs they don’t like, while also seeking to cut parts of government — including nonpartisan investigators — that are designed to prevent fraud. Commenting on the withholding of Medicaid funds, Gov. Tim Walz of Minnesota said on X, “This has nothing to do with fraud.”
Reporting was contributed by Tony Romm, Minho Kim, Zach Montague, Tyler Pager, Reid J. Epstein, David A. Fahrenthold and Ruth Graham.
Christina Morales is a national reporter for The Times.
The post The Minnesota Fraud Scandal and the Fallout, Explained appeared first on New York Times.
