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Walz’s Minnesota mess could spark the toughest fraud reforms in decades
By Chris Swecker
Published January 21, 2026
Multibillion-dollar government benefit fraud cases in Minnesota are making headlines for being so pervasive and brazen. But the Minnesota fraud machine is not an isolated concern. Benefit fraud is a big business across dozens of states and scores of benefit programs. I say this because I saw it firsthand as the former head of all FBI criminal investigations and later Global Security Director at one of the largest financial institutions in the U.S., where we used advanced data analytics to detect fraud schemes.
This is not a new problem. An April 2025 GAO report estimated that since 2003, taxpayer losses from fraud in state-administered benefit programs such as SNAP and Medicaid exceed $2.3 trillion. Based on the same GAO data, losses from fiscal years 2018 through 2022 alone range from $233 billion to $521 billion. The exposure of the Minnesota fraud machine — and the remediation that follows — may ultimately be the greatest accomplishment of Tim Walz’s political career. A 2025 California State Auditor’s report put that state’s benefit fraud at more than $70 billion.
Among the largest programs that have been exploited are Medicare and Medicaid. For too long, unscrupulous healthcare providers have used strategies such as medical identity theft, billing for unnecessary services or items, billing for services not furnished, upcoding, unbundling and kickbacks to unfairly profit from Medicaid programs. According to the National Health Care Anti-Fraud Association, about 3% — roughly $300 billion — of healthcare spending is lost to fraud annually. That’s a bonfire fueled by taxpayer dollars.
The Minnesota scandal has at long last brought this seedy situation into full public view and, ironically, may become the catalyst for initiatives that finally staunch the long-standing hemorrhage of taxpayer funds. A sleeping giant has been awakened: taxpayer outrage and an administration now under pressure to act. Minnesota will be ground zero to unleash the FBI, IRS and various inspectors general, who have long been limited to chasing whistleblower complaints one by one in a wasteful game of whack-a-mole. Reliance on sporadic tipsters is not an effective way to confront systemic fraud.
Make no mistake, significant indictments will follow for years to come because of the Minnesota benefits crime tsunami. Arresting and prosecuting criminals works — it deters future crime.
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But law enforcement is the tail end of the process. The real failure comes earlier: programs must be administered responsibly, and crimes must be detected before the money is gone. The ancient Greek tragedian Sophocles famously said, "What is not sought will go undetected." That maxim applies perfectly to fraud schemes draining taxpayer funds.
What federal prosecutors have described as "industrial-level" fraud was predictable and detectable. States willing to use modern tools — especially artificial intelligence — will find it. Simple steps, such as allowing the U.S. Treasury Department’s "Do Not Pay" system to cross-check beneficiaries against Social Security death records, were implemented only recently. Meanwhile, financial institutions and insurance carriers have used data analytics — now marketed as AI — for decades to prevent fraud. Banks deploy predictive analytics, anomaly detection and network analysis because they have a financial incentive to do so.
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Although CMS and other stakeholders have attempted to install safeguards, evidence suggests Medicaid programs are still losing billions. Traditional "pay and chase" approaches remain ineffective. The system shovels benefits out the door, then attempts recovery long after the damage is done. But there is something even more troubling than sheer incompetence.
The uncomfortable truth is that blue enclaves like Minnesota, California and New York often lack the political will to aggressively detect fraud because permissive systems serve electoral goals. Showering large blocs of friendly voters with taxpayer funds wins elections. That same logic fueled open-border policies under the Obama and Biden administrations. Ungoverned benefits programs and illegal migration translate into votes and campaign cash for the facilitators.
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Case in point: under Gov. Tim Walz, Minnesota has experienced the largest increase in SNAP benefits in the nation. Between 2018 and 2023, benefits surged 128%, followed by Massachusetts, Vermont and California at 120%, 96% and 89%, respectively. It is no accident that 82 of the 92 defendants indicted in Minnesota child nutrition, housing services and autism program fraud schemes are Somali. This voting bloc can swing elections. Meanwhile, funds intended for those who rightfully need help are siphoned off by criminal enterprises.
There are success stories. A new artificial intelligence tool helped the U.K. government recover nearly £500 million in the past year, according to the BBC, by cross-referencing data across agencies and flagging vulnerabilities before they are exploited. Officials say it can help make policies effectively fraud-proof before rollout.
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States willing to look for fraud will find it. The hope is that the Trump administration’s response to Minnesota’s systemic malfeasance becomes a template nationwide — red, blue and purple.
Taxpayers deserve the same relief achieved through firm border enforcement: near-zero losses without changing a single law. The goal should be zero tolerance for sloppy administration and criminal schemes — preventing losses before they occur, not chasing them after the fact.
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https://www.foxnews.com/opinion/walzs-minnesota-mess-could-spark-toughest-fraud-reforms-decades