I've been covering the massive Minnesota fraud schemes since 2022, when the NGO Feeding Our Future was exposed as a COVID-era fraud scheme. Subsequent audits and investigations revealed that the $250 million grift that literally stole food from the mouths of babes was just the tip of the iceberg.
Matthew Schneider, a former U.S. attorney from Michigan, told NBC News in 2022, “It is the biggest fraud in a generation.”
That was before the other fraudulent schemes masterminded by Minnesota's Somali community came to light. Power Line's Scott Johnson, writing in City Journal, has been on this story since it first broke in 2021. It involves billions of dollars in fraud, besides the Feeding Our Future NGO. "Housing Stabilization Services, Early Intensive Developmental and Behavioral Intervention, autism services, and 12 other such programs that Governor Tim Walz has now temporarily suspended for review," writes Johnson.
Joe Thompson is now the First Assistant United States Attorney in the Minnesota Office of the United States Attorney. Johnson refers to him as "one of the best and smartest trial attorneys I’ve ever seen."
Thompson is a bulldog. He's latched onto the fraud and has continued bringing indictments. As of Nov. 24, there have been "78 indictments, resulting in seven guilty verdicts, two acquittals, 50 guilty pleas, and five fugitives, with one deceased defendant. Thirteen unresolved cases await trial," Johnson reports.
Most disturbingly, Thompson believes that millions of dollars ended up in the hands of the al-Qaeda offshoot in Somalia, Al-Shabaab, as a result of the fraudulent proceeds being circulated through the hawala networks in Somalia. Money sent by immigrants in America to relatives in Somalia through the crude hawala banking system ended up in the pockets of terrorists.
Thompson isn't finished.
The Feeding Our Future fraud schemes "represent a phenomenon that may be even more damaging than incidental support for a foreign terrorist organization: the element of pervasive public corruption," writes Johnson.
Indeed, the liberal system of governance in Minnesota that pervades the bureaucracy, the judicial system, and the politics of the state all contributed to the ease with which Somali criminals were able to defraud the Minnesota and U.S. taxpayers.
All these frauds have occurred under the auspices of the administration of Governor Tim Walz. He has denied fault and deflected blame, going so far as to attribute responsibility to a local judge who handled a case brought by Feeding Our Future challenging the Department of Education’s temporary refusal to process (i.e., approve or deny) “site” applications that it had submitted. The judge issued an unusual public statement demonstrating the falsity of Walz’s attribution of blame.
Minnesota citizens want to know how and why this vast wasteland of scandal has come to be. This is how Thompson put it to the Star Tribune this past July: “This fraud crisis didn’t come out of nowhere. It’s the result of widespread failure across nearly every level of leadership in Minnesota: Politicians who turned a blind eye. Agencies that failed to act. Prosecutors and law enforcement who didn’t push hard enough. Reporters who ignored the story. Community leaders who stayed silent. And a public that wanted to believe it couldn’t happen here. This isn’t just a few criminals exploiting the system, this is a system that’s been begging to be exploited. We left the door wide open, and now our state has been ransacked. If we keep ignoring the truth, we’re going to lose something far more important than money. We’re going to lose the Minnesota we know and love.”
Doubt and cynicism are the order of the day in a state that once prided itself on good government.
The $250 million fraud was part of the COVID-era relief funds that Democrats and Joe Biden poured into schools. The grant that Feeding Our Future and its partners received was federal education aid.
The funds came from the Federal Child Nutrition Program, which is administered by the U.S. Department of Agriculture (USDA).Specifically, the fraud involved two federally funded programs: the Child and Adult Care Food Program (CACFP) and the Summer Food Service Program (SFSP).
The money was considered COVID-era relief funds because the USDA waived some standard requirements during the pandemic to allow for-profit restaurants and off-site distributors to participate, which the perpetrators of the fraud exploited.
For a long time here at Cato, we’ve called into question aid-to-state programs because they are so wasteful. In 2018, I discussed huge fraud in federally funded Medicaid. In 2023, I examined common fraud problems in federally funded food stamps. In 2025, I described fraud in federally funded school lunches. I have also highlighted how the online distribution of government benefits has escalated program fraud.
This Cato study discussed the endemic waste and bureaucracy in all federal aid-to-state programs. If state governments funded their own handout programs, they would have more incentive to run them lean and efficiently.
When everyone is responsible for how taxpayer dollars are spent, no one is responsible. That's a lesson that Washington has yet to absorb, and it's costing taxpayers massive amounts in waste and fraud.
