An investigation into fraud in Minnesota’s social services programs has broadened significantly, federal prosecutors said on Thursday.
The prosecutors told reporters that they were investigating suspicious billing practices in 14 Medicaid-funded programs. Until now, the investigation had focused on only three safety net programs run by state agencies.
“What we see in Minnesota is not a handful of bad actors committing crimes,” Joseph H. Thompson, the federal prosecutor overseeing the investigation said at a news conference. “It is staggering industrial-scale fraud.”
A preliminary assessment suggests that more than half of the $18 billion in taxpayer funds spent on the 14 programs and intended to help low-income, vulnerable people since 2018 was most likely stolen, the federal prosecutors said.
Prosecutors described the expansion of their investigation as they announced charges against six new people, accusing them of defrauding safety net programs. That brought to 92 the number of people charged in a yearslong fraud investigation that has roiled state politics in Minnesota and has drawn the attention of the White House. So far, at least 60 people have been convicted. Others are awaiting trial or have fled the country.
The new defendants included two men from Philadelphia who engaged in what Mr. Thompson called “fraud tourism.” He said they had been drawn to the state “because they knew and understood that Minnesota was a place where taxpayer money can be taken with little risk and few consequences.” Lawyers for the men did not immediately respond to a request for comment.
Also on Thursday, F.B.I. agents searched a business in a Minneapolis suburb that the authorities say had billed the state more than $1.1 million as part of a program designed to support for disabled adults. A call to the business went unanswered.
The new developments came a week after Gov. Tim Walz of Minnesota, a Democrat, appointed a judge and former F.B.I. agent to oversee a state effort to create stronger fraud safeguards for social service programs.
Mr. Walz, who is seeking re-election, has been criticized by President Trump and Minnesota Republicans, who say the state lacked adequate safeguards to prevent fraud. On Thursday, the governor applauded the latest federal charges. He has said Minnesota is in the process of overhauling a system that had long assumed that most people in social services fields were acting with integrity.
“We are a state that chooses not to let people go hungry, or homeless or uneducated,” the governor told reporters last week. “However that generosity has been taken advantage of by an organized group of fraudsters and criminals.”
In recent weeks, as reports of the fraud caught the attention of the White House, the Trump administration announced a crackdown on illegal immigration in the state, and Mr. Trump used derogatory language to attack Somali Americans.
The vast majority of the people charged in the fraud cases to date are of Somali origin. Most are United States citizens by birth or naturalization.
Dr. Mehmet Oz, who oversees the Centers for Medicare and Medicaid Services, has accused the Walz administration of turning a blind eye to fraud out of fear of alienating Somali American voters.
“Somali scammers get rich off the programs Governor Walz was supposed to be managing,” Dr. Oz said in a video earlier this month as he threatened to cut off federal funding for programs administered by state officials. “Minnesota politicians get elected with Somali votes and keep the money flowing.”
Mr. Walz has said the backgrounds of the people involved in carrying out social services for residents had no bearing on his administration’s oversight of them. The governor has said that fraud took root in state programs during the Covid-19 pandemic as state officials were hurrying to keep people fed, housed and safe during a health emergency.
The fraud cases have become Mr. Walz’s biggest challenge as he campaigns for a third term as governor. Several Republican competitors have made fraud the central issue of their campaigns.
Mr. Walz has said that he expects more instances of fraud will come to light in the months ahead as his administration works to root out problems. Mr. Walz hired an independent auditor to review claims in the 14 programs that are now under criminal investigation. He said results of those audits, which may come as soon as next month, would help state officials get a better handle on the amount of money that has been stolen.
The federal fraud investigation came to light in 2022 when prosecutors charged dozens of people with stealing hundreds of millions from a program intended to keep children fed during the pandemic.
Earlier this year, federal prosecutors charged people with stealing from other programs. One was designed to help people at risk of homelessness and the other involved therapy services for children with autism.
Ernesto Londoño is a Times reporter based in Minnesota, covering news in the Midwest and drug use and counternarcotics policy.
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