Federal Prosecutors Announce $90 Million Minnesota Fraud Takedown

(KNSI) – Lawmakers are reacting to the latest federal fraud charges filed in Minnesota linked to social welfare programs in the state.

House Speaker Lisa Demuth of Cold Spring is calling on Minnesotans to reject what she described as a “culture of fraud” in state government after federal prosecutors announced charges Thursday against 15 defendants in connection with more than $90 million in alleged Medicaid and social services fraud schemes.

The U.S. Department of Justice unveiled the Minnesota Health Care Fraud Takedown in Minneapolis, calling it the largest Medicaid autism fraud case ever charged by the department. Acting Attorney General Todd Blanche said the cases are “just the tip of the iceberg.”

Demuth, a Republican candidate for governor, said she applauds federal officials for stepping in. “The level of fraud in Minnesota is appalling. This rampant fraud hurts real people in need.”

Demuth pointed to families seeking autism services as among those hurt most. “When a mother who is seeking treatment for her child with autism cannot get it because fraudsters stole those resources from legitimate providers, that is the true cost of fraud,” she said.

The largest case announced Thursday involves a $46.6 million scheme to defraud Minnesota’s Early Intensive Developmental and Behavioral Intervention program, which provides services to children under 21 with autism spectrum disorder. Federal prosecutors allege the defendants paid kickbacks to parents, diagnosed children with autism regardless of medical necessity, and billed for services that were never provided.

Other charges announced Thursday target Minnesota’s Integrated Community Supports program, the Individualized Home Supports program, Housing Stabilization Services, the Great Start Compensation Support Payment Program, and the Child Care Assistance Program.

Demuth tied the schemes to 16 years of DFL control of the governor’s office. She also addressed the 2026 governor’s race. “Whether it be Tim Walz or Amy Klobuchar, Minnesota can’t afford more of the same. Minnesotans work too hard to have their tax dollars stolen. When I am governor, fraud ends.”

House Floor Leader Harry Niska of Ramsey said House Republicans pushed through new anti-fraud measures during the most recent legislative session that he credits with prompting state action.

Federal officials said Thursday that Minnesota’s Housing Stabilization Services program, which began in 2020 as the first of its kind in the country, was shut down on October 31st, 2025, because of fraud. The program was projected to cost $2.6 million annually but paid out more than $104 million in claims in 2024.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty in a court of law.

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