A shocking $9 billion is believed to have been embezzled in a wide-reaching social services scam in Minnesota, primarily orchestrated by members of the Somali community. This amount is nearly equivalent to the entire economy of Somalia.
The new estimate represents a significant increase from the previously suspected $1 billion that was stolen, according to federal prosecutors.
It is reported that this $9 billion accounts for approximately half of the $18 billion in federal funds provided to Minnesota-run services since 2018. Governor Tim Walz, a Democrat, continues to face criticism for his handling of the situation.
Comparatively, Somalia’s GDP was less than $12 billion last year, according to the World Bank.
“The scale of this fraud cannot be overstated,” remarked First Assistant US Attorney Joe Thompson, emphasizing the widespread nature of the criminal activity. “What we are witnessing in Minnesota is not just a few individuals committing crimes. It is a staggering, large-scale fraud operation.”
“Every day, we uncover new fraudulent schemes amounting to tens of millions of dollars,” Thompson added.
The scheme involved numerous individuals, predominantly from Minnesota’s Somali community, who established businesses and non-profits claiming to offer services like housing, food, or healthcare assistance. They would then bill the state programs for these services that were never provided.
The fraud was so extensive that it went beyond typical over-billing tactics seen in similar cases. Individuals were setting up elaborate operations, sometimes traveling from out of state, to exploit the fraudulent opportunities available, explained Thompson.
Charges against six additional individuals allegedly involved in the scam were announced recently, bringing the total number of defendants to 92.
Among the new defendants were two individuals who engaged in what Thompson described as “fraud tourism.” They traveled from Philadelphia to Minnesota to establish a fake housing aid program, aiming to capitalize on the state’s programs for personal gain.
Anthony Waddell Jefferson, 37, and Lester Brown, 53, allegedly visited Minnesota shelters and affordable housing to create a facade as local “housing experts” with an aid business. They then enlisted a network of family members and associates to fabricate client notes and submit them for reimbursement from the state.
They filed claims worth $3.5 million with the state’s Housing Stability Services Program, purporting to assist approximately 230 clients, according to prosecutors.
Another individual charged was Abdinajib Hassan Yussuf, 27, who allegedly established a youth autism foundation that falsely claimed to provide therapy for children on the autism spectrum.
In reality, Yussuf allegedly paid parents to enroll their children in the program, regardless of their actual conditions, and then billed the state for services that were never rendered.
Yussuf’s program received around $6 million in reimbursements, prosecutors claimed.
Another defendant, 28-year-old Asha Farhan Hassan, was allegedly involved in an autism scheme that fraudulently obtained $14 million in reimbursements while also profiting from another scam related to Minnesota’s food program Feeding Our Future.
“Approximately two dozen Feeding Our Future defendants were connected to autism clinics,” mentioned Thompson. “This is how we discovered the autism fraud.”
The scandal began to unravel around 2022 when Feeding Our Future came under scrutiny, but it was only recently that the full extent of the alleged fraud became apparent.
A significant portion of the embezzled funds was transferred overseas or spent on luxury items like cars.
Thus far, 57 individuals have been found guilty in connection to the scheme.
The scheme led to increased immigration enforcement in Minnesota by the White House, with President Trump criticizing Somalis as “garbage” and calling Governor Walz “retarded” for his perceived mishandling of the situation.
Walz, who is seeking re-election in 2026 and was Kamala Harris’ running mate in the 2024 presidential campaign, defended his actions in response to the scandal.
“We are committed to combating fraud and will collaborate with federal partners to prevent fraudulent activities and hold wrongdoers accountable,” he stated on Thursday.
Source: Post wires
