In the heartland of America, Minnesota has long prided itself on its progressive welfare state, offering generous safety nets to vulnerable populations. But beneath this facade of compassion lies a sprawling network of fraud that has siphoned billions from taxpayers, enriching a select few while depriving those in genuine need. Under Governor Tim Walz's administration, the state has become a hotbed for sophisticated scams targeting Medicaid and federal nutrition programs. Worse still, federal counterterrorism investigators reveal that a portion of these ill-gotten gains—millions of dollars—has flowed back to Somalia, bolstering the terrorist group Al-Shabaab. As one confidential source starkly put it: “The largest funder of Al-Shabaab is the Minnesota taxpayer.” This isn't hyperbole; it's the grim reality of how unchecked generosity, cultural blind spots, and political timidity have turned public assistance into a pipeline for international extremism.
The story begins with Minnesota's Somali diaspora, one of the largest in the United States, numbering over 80,000 in the Twin Cities alone. Fleeing civil war in the 1990s, many arrived as refugees, building vibrant communities in Minneapolis and St. Paul. Yet, as integration challenges persist—high unemployment, language barriers, and clan-based loyalties—some have exploited the system's lax oversight. A "tribal mindset," as experts describe it, prioritizes family and clan networks over legal norms, enabling graft on an industrial scale. Accusations of racism often shield these operations from scrutiny, silencing critics and media alike. The result? A cascade of scandals that have eroded public trust and drained resources meant for the elderly, disabled, and homeless.
At the epicenter of this crisis is the Housing Stabilization Services (HSS) program, a Medicaid initiative launched in 2020 to address homelessness among seniors, addicts, the disabled, and the mentally ill. Billed as a groundbreaking effort with low barriers to entry and minimal documentation requirements, HSS promised quick reimbursements for housing support. Pre-launch estimates pegged its annual cost at a modest $2.6 million. Reality proved far more extravagant: payouts ballooned to $21 million in 2021, $42 million in 2022, $74 million in 2023, and $104 million in 2024. By the first half of 2025, another $61 million had vanished into the ether.
The scheme's unraveling came swiftly. On August 1, 2025, the Minnesota Department of Human Services (DHS) halted payments to 77 providers amid "credible allegations" of fraud and abruptly terminated the entire program. U.S. Attorney Joe Thompson, leading the federal probe, didn't mince words: “The vast majority of HSS was fraudulent,” he declared, estimating statewide losses could top $1 billion. Indictments unsealed on September 18, 2025, charged eight individuals—Moktar Hassan Aden, Mustafa Dayib Ali, Khalid Ahmed Dayib, Abdifitah Mohamud Mohamed, Christopher Adesoji Falade, Emmanuel Oluwademilade Falade, Asad Ahmed Adow, and Anwar Ahmed Adow—with orchestrating a web of deceit. Six of the defendants hail from the Somali community, underscoring the demographic patterns in these cases.
The mechanics were audacious in their simplicity. Fraudsters established fictitious companies, billing Medicaid for services never rendered. Operations ran from dilapidated storefronts in Minneapolis's Cedar-Riverside neighborhood, a Somali enclave. They stacked schemes like Russian dolls: overbilling HSS while simultaneously defrauding other programs, including Early Intensive Developmental and Behavioral Intervention (EIDBI) for autism, Adult Rehabilitative Mental Health Services, Integrated Community Support, Community Access for Disability Inclusion, and Personal Care Assistance (PCA) services. “Most of these cases... aren’t just overbilling,” Thompson explained. “Purely fictitious companies solely created to defraud the system... schemes stacked upon schemes... the depth of the fraud in Minnesota takes my breath away.”
This wasn't isolated opportunism; it was systemic predation. Providers recruited desperate clients with promises of cash kickbacks, only to ghost them after securing approvals. One indicted operator, Abdifitah Mohamud Mohamed, allegedly funneled funds through shell entities tied to luxury purchases and overseas transfers. The human cost is staggering: legitimate recipients waited months for aid, while resources meant to stabilize lives instead lined pockets.
The HSS scandal echoes the infamous Feeding Our Future fraud, a $250 million heist that exposed similar vulnerabilities. Founded in 2016 as a nonprofit sponsoring daycares and after-school meals under the federal Child Nutrition Program, the organization—run largely by Somali entrepreneurs—started modestly, receiving $3.4 million in 2019. By 2021, amid pandemic-era waivers easing oversight, it exploded to nearly $200 million through fake meal counts, doctored attendance records, and fabricated invoices. Defendants splurged on Lamborghinis, multimillion-dollar homes in the U.S., and real estate in Turkey and Kenya.
Red flags waved early: explosive growth in 2020 prompted USDA warnings, but Feeding Our Future sued, crying racial discrimination and claiming it served "foreign nationals" overlooked by mainstream providers. The ploy worked, buying time. On September 18, 2025, the 56th defendant, Abdullahe Nur Jesow, pleaded guilty, joining a roster that includes political insiders. Donors and associates rubbed shoulders with Rep. Ilhan Omar; her deputy district director, Ali Isse, lobbied for the program. Former state Sen. Omar Fateh pressed Gov. Walz for expansions, while Abdi Nur Salah, a senior aide to Minneapolis Mayor Jacob Frey, faced charges.
Former Minnesota state Sen. David Gaither, a Republican who navigated these waters, pulls no punches: “That’s the standard operating playbook... when in doubt, claim racism... the media does not want to put a light on this... if you don’t win the Somali community, you can’t win Minneapolis.” The scandal's fallout lingers, with trials revealing how clan ties funneled funds abroad, mirroring patterns in newer frauds.
Compounding the outrage, a September 24, 2025, indictment targeted Asha Farhan Hassan—already entangled in Feeding Our Future—for a $14 million rip-off of Minnesota's autism services. The Early Intensive Developmental and Behavioral Intervention (EIDBI) program, designed for children with autism spectrum disorders, became prey to a recruitment drive in Somali neighborhoods. Hassan allegedly enrolled kids without genuine diagnoses, fabricating medical records and paying parents $300 to $1,500 monthly kickbacks—scaled to the authorization amounts bilked from Medicaid.
The numbers are jaw-dropping: Autism claims surged from $3 million in 2018 to $399 million in 2023, with providers jumping from 41 to 328. Among Somali four-year-olds, diagnoses hit one in 16—triple the state average—raising questions about over-diagnosis for profit. Thompson frames it as part of a larger "web": “This is not an isolated scheme... these massive fraud schemes... have stolen billions.” Real families, seeking legitimate therapy for autistic children, found waitlists clogged by ghosts.
What elevates this from fiscal crime to national security nightmare is the money trail. Stolen funds don't stay stateside; they traverse informal hawala networks—clan-based money transfer systems evading banks—to Somalia. In 2023, Somali diaspora remittances hit $1.7 billion, with 40% of households receiving support. Law enforcement sources, speaking off-record, confirm Al-Shabaab's cut: every dollar sent bolsters the group's arsenal, from IEDs to recruitment.
Retired Seattle detective Glenn Kerns, who probed similar networks, traced $20 million abroad in a single year, linking Minnesota welfare scams to hawalas funding extremists. An anonymous ex-Minneapolis Joint Terrorism Task Force official concurs: “Every cent... sent back to Somalia benefits Al-Shabaab... [they] are... taking a cut.” Federal probes tie this to the "Minnesota men"—nearly half of 58 U.S. ISIS recruits hailed from here, many from welfare-dependent families who appeared assimilated but harbored radical ties. Blogger Scott Johnson chronicled their trials, noting how benefits masked deeper allegiances.
Kayesh Magan, a Somali-American ex-investigator, laments: “Nearly all... defendants... are from my community.” Yet, he insists, most Somalis are law-abiding victims of the same system's failures.
Since Walz's 2019 election, Minnesota has unearthed at least 28 fraud scandals, most starring Somali-led rings. Democratic officials face accusations of "timidity," prioritizing progressive optics over audits. Media silence, Gaither argues, stems from fear of alienating voters in a bloc pivotal to urban elections. As 2026 looms—with Walz eyeing a third term and Republican Kristin Robbins vowing fraud-proof reforms—political blowback brews. “We aren’t even close to being halfway there,” Gaither warns, of grasping the full scope.
Thompson's prosecutions offer hope, but billions lost demand reckoning. The path forward? Stricter verifications, cultural competency in oversight, and honest dialogue unshackled by racism charges. Minnesota's welfare ethos endures, but only if rebuilt on accountability. Until then, taxpayers fund not just fraud, but far darker causes. The heartland's compassion, twisted, now echoes in distant battlefields—a cautionary tale for America's generosity.
Editorial comments expressed in this column are the sole opinion of the writer.
