“Fraud” doesn’t begin to cover it. Under Gov. Tim Walz’s watch, Minnesota has become the hub of an exorbitant federal fund money-laundering scheme.

Updated reports reflect nearly 100 individuals, the majority being Somali immigrants, have been charged for involvement in a fraud scandal that cost American taxpayers billions. The silver lining is that this corruption is finally being exposed and those involved are being held accountable.

Minnesota nonprofit Feeding Our Future was the first case to catch FBI attention in 2021. Many Somali defendants created shell companies and fake distribution sites to claim $250 million in federal child nutrition fund reimbursements for millions of nonexistent meals.

The investigation expanded to Medicaid and other state-administered programs like Early Intensive Developmental and Behavioral Intervention, Housing Stabilization Services, and Integrated Community Services. Broader probes now suggest total losses across 14 state welfare programs may exceed $9 billion, meaning half of all billed funds may be fraudulent.

Corruption has even extended to daycare centers in Minneapolis which received millions in federal funding but do not actually operate. Journalist Nick Shirley uncovered $110 million in questionable payments to Somali-run businesses his first day of investigating.

The cash that should have been used to provide goods and services to Minnesota’s most vulnerable—children, homeless, and mentally challenged individuals—was instead spent financing lavish lifestyles, funding terrorism abroad (al Qaeda affiliate al Shabaab), and paying kickbacks to co-conspirators—potentially including Minnesota lawmakers.

The fraud was obvious for those willing to look, and Gov. Walz certainly wasn’t. He failed to address corruption out of fear of political backlash or accusations of racism. An important distinction: pursuing truth and holding criminals accountable is not racist.

Minnesota lawmakers’ inaction forced federal government intervention, and now the complex web of corruption is finally being uncovered. As such, President Donald Trump announced he would immediately terminate Temporary Protected Status for Somalia, though that role lies with Department of Homeland Security Secretary Kristi Noem, who is evaluating the status. This is in addition to the president’s full suspension of Somali permanent and temporary aliens included in his June 2025 Proclamation.

Americans share a unique combination of values including self-reliance, social mobility, equal opportunity, and patriotism. Individuals who believe in and live out these ethics best contribute to a flourishing nation. So, when considering immigration, we want to import individuals who share American values, assimilate, and contribute to the economy; not ones who are a net negative to our society and certainly not those who defraud America—for either immigration or welfare benefits.

The Center for Immigration Studies reports an alarming disparity in poverty rate and welfare reception for Minnesota’s Somali immigrants compared to the general population. Over 82% of children in Somali households and 66% of adults live in or near poverty, a drastic difference to 22% of native-born children and 18% of native adults.

Rates of social service use by Somalians are also disproportionately high. Approximately 81% of Somali-immigrant households, 89% with children, receive some form of welfare compared to only 21% of native households. Over 73% of Somali households have at least one member on Medicaid, 54% receive food stamps, and 27% receive direct cash transfers. This compares to 18, 7, and 6% for native-born households, respectively.

Not only have program benefits far exceeded Somali economic contributions, creating a net drain on society, but community members have actively sought to defraud government systems. Economic efficiency should be an objective of all lawmakers, and blatant theft of taxpayer funds combined with local and state governments turning a blind eye is completely unacceptable and un-American.

Eradicating corruption within the welfare system is vital, but it will not alone address the holistic costs of social programs on taxpayers. Deporting those who game the system and reducing the inflow of new immigrants who, not only have low earning power and do not contribute economically, but actively oppose American values and commit fraud, will shrink federally funded social services in Minnesota and across the nation.

While a welfare state currently exists, benefits should not be dispersed to immigrants—legal or otherwise. Lawmakers must re-establish the precedent enforced in years past where immigrants cannot burden the taxpayer and social safety net programs are reserved exclusively for American citizens.

The solution to shrinking the welfare state is twofold. It can be achieved by reducing the supply of benefits, namely enforcing eligibility requirements and addressing fraud, as well as lowering demand by deporting illegal aliens and fostering an environment of incentives that push people to be self-sufficient, not government dependent.

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Nicole Huyer is a Senior Research Associate in the Roe Institute at The Heritage Foundation.

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