Trump Admin Announces Next Phase in Welfare Fraud Investigation

Vice President JD Vance announced this week the start of a new phase in an initiative to expose fraud across the country.

On Feb. 25, Vance, alongside Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, held a press conference in the White House.

Singling out Minnesota, Vance said the federal government would withhold $259 million in health care-related welfare reimbursements to the state in response to allegations of financial fraud.

The allegations are that welfare payments intended for genuine recipients in need have instead been funneled into corruption schemes and fake claims.

“There are kids in Minnesota who deserve these services, who need these services, and they’re not going to those kids; they’re going to fraudsters in Minneapolis,” Vance said.

The United States doesn’t have a publicly funded health care system like the National Health Service in the UK, but Medicare and Medicaid are the closest equivalents: Medicare is a pension-linked health care scheme, while Medicaid is a welfare scheme for low-income and vulnerable groups.

Oz described the latest effort as part of a broader investigation into the industry as a whole.

“We’re launching the largest action against fraud that we’ve ever taken,“ Oz said.

President Donald Trump, in his State of the Union address on Feb. 24, declared a “war on fraud,” and announced the appointment of Vance to lead the team of investigators.

“There’s been no more stunning example than Minnesota, where members of the Somali community have pillaged an estimated $19 billion from the American taxpayer. We have all the information, and in actuality, the number is much higher than that,” Trump said at the address.

On Feb. 26, Minnesota Gov. Tim Walz responded to the allegations, describing them as a “campaign of retribution.”

“Trump is weaponizing the entirety of the federal government to punish blue states like Minnesota,” Walz said.

Democrats are synonymous with blue, while Republicans are synonymous with red.

On Jan. 8, the White House announced the establishment of a new Department of Justice division for national fraud enforcement. It said that 98 people had been charged with fraud, 85 of whom were Somali, and 64 of whom had prior convictions.

Investigations began in December 2025 over allegations that empty child daycare centers were receiving state funds.

The Department of Homeland Security began Operation Metro Surge around the same time, deploying immigration enforcement agents to the Twin Cities of Minneapolis–Saint Paul, which resulted in the arrest of more than 4,000 illegal immigrants.

The operation received criticism from local officials, with violent opposition from protesters resulting in the death of two protesters.

Democrats in Congress accused immigration enforcement of overreach, demanding reforms, and refused to vote for immigration enforcement funding, resulting in a partial government shutdown, still in effect.

Travis Gilmore contributed to this report.