JD Vance and Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz announced that the Trump administration is temporarily halting certain Medicaid funding to Minnesota amid an ongoing fraud investigation.
This comes after President Donald Trump condemned the rampant fraud in Democrat-run Minnesota and pointed to Vance as the one leading the efforts of his administration’s “war on fraud” in his Feb. 24 State of the Union address.
"When it comes to the corruption that is plundering — it really, it’s plundering America — there’s been no more stunning example than Minnesota, where members of the Somali community have pillaged an estimated $19 billion from the American taxpayer," Trump said at the SOTU, adding, "Oh, we have all the information."
"And, in actuality, the number is much higher than that, and California, Massachusetts, Maine and many other states are even worse. This is the kind of corruption that shreds the fabric of a nation, and we are working on it like you wouldn’t believe," Trump continued.
The pause affects $259 million in federal payments to the Gopher State, which will be withheld until the state government demonstrates corrective actions against widespread social and welfare fraud.
The vice president has given Democrat Tim Walz of Minnesota 60 days to clean up the state’s Medicaid rolls after it was exposed that taxpayer dollars exceeding $9 billion were misallocated for illegal purposes, according to investigators.
“We have decided to temporarily halt certain amounts of Medicaid funding that are going to the state of Minnesota in order to ensure that the state of Minnesota takes its obligation seriously to be good stewards of the American people’s tax money,” Vance said.
“A lot of people were getting rich off the generosity of the American taxpayer!” JD Vance said in regard to criminals fraudulently taking money from needy assistance programs like “Feeding Our Future” and other government-funded initiatives meant to help autistic children.
“There are kids that need these autism services, and the money is not going to those kids. They're going to fraudsters in Minneapolis. That is unacceptable. And that's the sort of thing that we're cutting off with this action today," he added.
The U.S. Department of Justice and Republican Party members in Congress have been highlighting the massive scandal since December 2025, when years of unaccounted-for fraud, mostly perpetrated by members of Minnesota’s Somali immigrant community, came under the national spotlight.
The fraud concerns center on 14 state programs, including those for autism services and medical transports, where funds allegedly went to fraudsters instead of beneficiaries.
Vance emphasized that the move aims to ensure that Minnesota acts as a responsible steward of taxpayer money, calling the misuse a "disgrace."
Oz called the scandal the largest anti-fraud action in the agency’s history and clarified that care providers in Minnesota have already been paid by the state, so services should continue uninterrupted, despite the freeze in federal reimbursement payments.
"We have notified the state and said that we will give them the money, but we're going to hold it and only release it after they propose and act on a comprehensive corrective action plan to solve the problem," Oz said in reference to the $259 million of deferred payments being withheld by the Trump administration.
"If Minnesota fails to clean up the systems, the state will rack up $1 billion of deferred payments this year," Oz warned.“This is not a problem with the people of Minnesota. It’s a problem with the leadership of Minnesota and other states who do not take Medicaid preservation seriously."
“Any delay in services is going to be, should be laid at the at the seat of Governor Walz. I believe he will take this seriously,” he continued.
With President Trump back in the White House, the state of our Union is strong once again.
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