The widespread fraud in Minnesota’s welfare programs, centered in the Somali community, has been a local story for a long time. Last December, it hit the national news in a big way. The story is significant in itself, but also because it suggests that fraud in federal/state welfare programs is probably common around the country. True, it is no doubt worse in Minnesota because of the gross incompetence (or complicity, take your pick) of the Tim Walz administration. But I suspect it is bad in many states.
How bad? Here are a couple of data points.
Minnesota has a Medicaid-funded program for “Non-Emergency Medical Transportation.” Drivers drive people around for non-emergency medical treatment. That was the idea, anyway, but the program turned out to be riddled with fraud. My American Experiment colleague Matt Dean, former Majority Leader of the Minnesota House of Representatives, reports:
DHS now has 71 open fraud investigations, has suspended payments to 14 providers, and is pursuing monetary recoveries in five cases. Inspector General James Clark laid out the playbook: “phantom billing” for trips with no matching medical appointment, excess mileage claims, and kickbacks to patients or recruiters. Low barriers to entry—anyone with a vehicle could become a provider—created ghost companies and unverifiable claims.
As a result of the fraud crackdown, rides billed to the program have dropped by 64%:
In 2025 alone, the program served roughly 250,000 Minnesotans and racked up millions of trips at a cost of $127 million. Yet when the Department of Human Services finally noticed fraud—-after NEMT became one of 14 high-risk Medicaid services—-billed rides dropped by 64 percent.
It is reasonable to infer that the program was two-thirds criminal fraud.
But that is nothing compared to Minnesota’s autism program. If you believe the numbers, there are an astonishing number of Somali children in Minnesota who are autistic. Again, from Matt Dean:
Rep. Kristin Robbins, chair of the House Fraud Prevention and State Agency Oversight Committee, highlighted the program’s staggering growth during a February 23 hearing. The [Early Intensive Developmental and Behavioral Intervention] budget ballooned from $1 million in 2017 to $343 million by 2024—a more than 34,000% increase—while the number of providers surged from 41 to nearly 500.
So 500 individuals or alleged companies were billing the state for taking care of, and training, autistic children. As a result of rampant fraud, Minnesota belatedly adopted a system where a provider under this program has to be licensed–a simple procedure. The result?
When the state finally imposed basic reforms by requiring licensure to weed out fraud, the response exposed the depth of the problem. Vice Chair Rep. Patti Anderson reacted bluntly: “There are 500 unlicensed providers, and only six applied for licensure, which is shocking.”
Six out of 500. Unbelievable. Like some other Minnesota/federal welfare programs, the autism program appears to have been virtually all fraud.
I expect that when the United States Attorney’s office announces its next round of criminal prosecutions, fake autism centers will be high on the list.
