Fraud in state programs isn’t a victimless crime.

It affects every Minnesotan who pays taxes and everyone who depends on these programs. When money meant for seniors, people with disabilities, and families in need is stolen, the people hurt most are the ones these programs were designed to help.

Minnesota s Acting U.S. Attorney Joe Thompson said our state could be facing up to one billion dollars in fraud. That kind of money could cover school district deficits a couple times over. It s more than the $750 million bonding bill we passed this year to repair roads and bridges. Instead of helping people, that money is funding luxury shopping and international trips for those stealing it.

Fraud has become rampant in Minnesota, and it s giving our state a reputation we don t want. The $250 million Feeding Our Future scheme is nearing 50 convictions or guilty pleas. The FBI recently raided two Minnesota autism centers as part of an investigation into Medicaid fraud in autism services. Payments to autism providers in Minnesota exploded from $6 million in 2018 to $234 million in 2024.

Now, there’s another investigation into fraud in Minnesota, this time into the Housing Stabilization Services (HSS) program, a Medical Assistance benefit meant to help people with disabilities including mental illness and substance use disorders and seniors find and keep housing.

In 2020, that program was expected to cost $2.5 million a year. Last year, it cost $104 million. We won t know how much of that was stolen until it is too late. Just look at the Feeding Our Future scandal. Of the $250 million taken, the government has only been able to recover about $60 million. Once the money is out the door, it s almost impossible to get it back.

The FBI search warrant into HSS describes how this fraud started: Since Minnesota became the first state to offer Medicaid coverage for Housing Stabilization Services, dozens of new companies have been created and enrolled in the program. These companies and the individuals that run them have taken advantage of the housing crisis and the drug addiction crisis in Minnesota to prey on individuals who need help.

Fraud like this drives up budgets and hurts everyone. When fraud is allowed to continue, state agencies ask for more money to fill the gaps. Honest Minnesotans pay the price while scammers enjoy a comfy life.

That is why the Senate, with strong bipartisan support, passed a plan to create an independent Office of Inspector General. This office would have the authority to catch fraud earlier and stop it before millions more are lost. Unfortunately, some House Democrats blocked it from becoming law.

Gov. Tim Walz and his administration have given only a lukewarm response to Minnesota’s fraud crisis, and that s not enough. We need clear, decisive leadership on anti fraud efforts. Minnesotans deserve to know their tax dollars are protected and that these programs will be there for the people who truly need them.

— Rich Draheim represents District 22 in the Minnesota Senate