Trump Says Minnesota Fraud Investigation Only the Start, Suggests Other States Next

President Donald Trump said on Dec. 31 that his administration is going to continue to target alleged social services fraud in Minnesota, but said that it’s worse in other states.

“Can you imagine they stole $18 billion?” Trump said during remarks at his New Year’s Eve celebration at Mar-a-Lago on Dec. 31, referring to allegations of fraud in Minnesota.

“That’s just what we’re learning about. That’s peanuts. And California is worse, Illinois is worse, and, sadly, New York is worse,” he said, adding, “We’re going to get to the bottom of all those. It was a giant scam.”

Earlier in the weekend, the Trump administration said it is freezing child care funds to Minnesota after a series of alleged fraud schemes were uncovered at Minnesota day care centers run by Somali residents.

Deputy Secretary of Health and Human Services (HHS) Jim O’Neill said the decision was a response to “blatant fraud that appears to be rampant in Minnesota and across the country” in a social media post announcing the change on Dec. 30. He also said that HHS officials have identified people in a viral video recorded by independent journalist Nick Shirley about a day care center in the state.

All Administration for Children and Families (ACF) payments, meanwhile, will now “require a justification and a receipt or photo evidence before HHS sends money to a state,” said HHS in the post.

“HHS has launched a dedicated fraud-reporting hotline and email address at childcare.gov. Whether you are a parent, a provider, or a member of the general public, we want to hear from you. We have turned off the money spigot and we are finding the fraud,” the post said.

In response to HHS, Minnesota Democratic Attorney General Keith Ellison said in a statement posted on social media Wednesday that he was “exploring all our legal options to ensure that critical childcare services do not get abruptly slashed based on pretext and grandstanding.”

Minnesota has been under the spotlight for years for Medicaid fraud, including a massive $300 million pandemic fraud case involving the nonprofit Feeding Our Future. Prosecutors said it was the country’s largest COVID-19-related fraud scam and that defendants exploited a state-run, federally funded program intended to provide food for children.

Over the past several years, dozens of people have been charged. So far, 57 people have been convicted, either because they pleaded guilty or lost at trial since 2022. Most of the defendants are of Somali descent.

Minnesota Gov. Tim Walz, the 2024 Democratic vice presidential nominee, said earlier in December that fraud in his state will not be tolerated and his administration “will continue to work with federal partners to ensure fraud is stopped and fraudsters are caught.”

The fraud could be a major issue in the 2026 gubernatorial race as Walz seeks a third term. Walz has said an audit due by late January should give a better picture of the extent of the fraud but allowed that the $1 billion estimate could be accurate. He said his administration is taking aggressive action to prevent additional fraud. He has long defended how his administration responded.

The Associated Press contributed to this report.