Minnesota prosecutors cite $9B Medicaid fraud risk

Federal prosecutors in Minnesota say roughly half or more of the $18 billion paid out through 14 state-run Medicaid and safety-net programs since 2018 could be fraudulent. That estimate amounts to $9 billion or more in potentially stolen taxpayer money, according to prosecutors. Officials described the alleged activity as widespread and systematic, not limited to isolated billing errors. The suspected fraud spans multiple programs meant to support vulnerable populations, including housing assistance, autism therapy, and community support services.

First Assistant U.S. Attorney Joe Thompson said the schemes are “industrial-scale,” rather than the type of overbilling sometimes seen in individual cases. Investigators also report that when they review the claims data tied to the programs, they see more red flags than legitimate activity. The allegations point to fraud patterns that extend across different types of benefits and services funded through Medicaid and related safety-net programs.

Prosecutors have announced new criminal charges in recent days connected to these schemes. Dozens of individuals have been charged so far in various cases. Some defendants are accused of creating fake providers. Others are accused of billing for services that were never delivered. Prosecutors also allege that some funds were used for personal expenses.

The current probe has roots in earlier fraud cases, including the Feeding Our Future COVID-relief fraud scandal. That case helped uncover weak oversight and led investigators to take a closer look at Medicaid-related billing. Officials have emphasized that fraud on this scale can disrupt legitimate services. They say it makes it harder for people who actually need care to get it, as resources intended for supports are diverted through fraudulent claims.