We begin today with one of the biggest and most publicized frauds involving taxpayer money in recent memory: Minnesota’s ongoing scandal centering on the nonprofit “Feeding Our Future.” As that controversy unfolds, Minnesota Governor Tim Walz announced this past week that he will not run for a third term.

Prosecutors say the case involves the theft of $250 million in taxpayer money meant to feed needy children. At least 78 people, mostly from Somalia, have been charged so far, and dozens convicted. Investigations have now expanded to broader allegations in multiple states regarding housing assistance and Medicaid-funded autism services. Cases allege bogus autism therapy providers and kickbacks given to parents.

U.S. attorneys say about 90 percent of the defendants in the three schemes are from Somalia. Minnesota U.S. Attorney Joe Thompson has stated that half or more of $18 billion in federal taxpayer money given through 14 high-risk Minnesota programs since 2018 may have been lost to fraud.

How could such massive scams happen—and go on for so long? Lisa Fletcher reports.

The following is a transcript of a report from “Full Measure with Sharyl Attkisson.”
Watch the video by clicking the link at the end of the page.

Sixty years ago, President Lyndon Johnson laid the groundwork for modern anti-poverty programs, launching his “Great Society” agenda.

The plan reshaped the federal government’s role in fighting poverty, expanded healthcare through Medicare and Medicaid, and increased federal involvement in education and civil rights, among other programs.

President Lyndon Johnson (January 4, 1965): “The Great Society asks not how much, but how good.”

The first-year price tag: $1 billion. Today, the system it spawned costs more than a trillion dollars a year—and a staggering share is lost to fraud, waste, and abuse.

According to the U.S. Government Accountability Office—the non-partisan watchdog that audits federal spending—most of the bad or mistaken payments are in three programs: Medicaid, the health insurance program for low-income Americans; the Supplemental Nutrition Assistance Program, or “SNAP,” the grocery benefit once called food stamps; and Supplemental Security Income, or “S.S.I.,” monthly cash help for very low-income people who are elderly or have disabilities.

All told, those errors, much of which is fraud, add up to about $521 billion a year.

To be clear—that’s about half the total cost of the program.

Andrew McClenahan, United Council on Welfare Fraud: We have a massive identity fraud problem in all of our programs.

Andrew McClenahan is an investigator for the United Council on Welfare Fraud. He says the root cause is simple: we don’t verify.

Lisa Fletcher: Is there one program that enables fraud more easily than any of the other welfare programs?

Andrew McClenahan, United Council on Welfare Fraud: They’re tied together. In Medicaid, states have the option—it’s called the 1634 option—that allows the Social Security Administration to determine eligibility for SSI. The problem is that the Social Security Administration bases eligibility on the honor system. The SSA inspector general has said you need to verify everybody’s eligibility. They don’t. That means that liars and millionaires can get on SSI.

In many states, SSI opens the door to Medicaid for seniors and people with disabilities and often makes them automatically eligible for SNAP, multiplying the opportunity for fraud.

Andrew McClenahan, United Council on Welfare Fraud: If you get SSI, which is a maximum of almost a thousand dollars a month, and you get SNAP, you’re going to be getting about $15,000 a year. We’re not checking to make sure that they’re not on other states’ enrollments, that they’re not dual-enrolled even in the same state, and that they’re not incarcerated or deceased.

The overlapping systems, with little accountability, make the system ripe for rip-offs in several states.

News broadcast: “The federal agency that runs the Medicaid program is threatening to withhold payments to Minnesota programs unless the state addresses widespread fraud.”

Minnesota has drawn attention for a series of fraud scandals with taxpayer money, in which several day care centers—including the Quality Learning Center in Minneapolis, alleged to have been only an empty building—received government funds despite not providing actual child care services. Additionally, some 60 people in the local Somali community have been convicted of felonies, accused of stealing from a program meant to feed children during the Covid-19 pandemic, skimming more than a billion dollars in taxpayer money.

In Maine, a similar investigation is underway into alleged multi-million-dollar Medicaid fraud tied to Gateway Community Services, a health care contractor run by a Somali-American. The organization denies the allegations.

And in Florida, the Opa-locka/Hialeah flea market became a case study in how quickly SNAP benefits—which are on a state-issued debit card—turn into cash, guns, and even sex trafficking.

News broadcast: “Food stamp fraud. Police and the feds sweep into a South Florida flea market and make dozens of arrests.”

Andrew McClenahan, United Council on Welfare Fraud: We were seeing EBT being exchanged for assault weapons, AK-47s, cash—50 cents on the dollar. People were exchanging sex with workers for EBT benefits. That’s not what this entitlement program’s design was made for.

Lisa Fletcher: Are there enough people on the job to get their arms around the size of this problem?

Andrew McClenahan, United Council on Welfare Fraud: Not at all. In fact, the regulations say that you have to have at least one fraud investigator for every 5,000 households. Some of the states only have one or two fraud investigators for the whole state.

With so few investigators on the ground, Agriculture Secretary Brooke Rollins recently flagged massive fraud challenges, from deceased people receiving benefits to individuals collecting in multiple states.

Agriculture Secretary Brooke Rollins: When we found 186,000 dead people, or dead people’s Social Security numbers being used, 500,000 people receiving benefits more than twice—we had a couple of people receiving benefits in six states.

Lisa Fletcher: What’s the fix?

Andrew McClenahan, United Council on Welfare Fraud: I think Secretary Brooke Rollins has signaled that they’re going to be getting back to the basics. They’re focused on helping people get out of and off SNAP. There needs to be improved data sharing and eligibility verification, and protecting the program because there are people who need it.

Which is why the Trump administration is bringing back Clinton-era work requirements, making benefits conditional on work or volunteer hours and applying the rules to Medicaid—measures now implemented in the recent One Big Beautiful Bill.

Andrew McClenahan, United Council on Welfare Fraud: The One Big Beautiful Bill has tried to go back to the 1996 reform and say, if you are an able-bodied adult, you have to work. Now, if you’re between the ages of 18 and 55, you have to either work, volunteer, or look for work. If you don’t, you’re going to be off the program in three months. And now the One Big Beautiful Bill has also extended those work requirements to Medicaid as well.

Not everyone agrees. Twenty-one Democratic-led states and Washington, D.C., are suing the U.S. Department of Agriculture, which runs SNAP, to stop its plan to collect five years of benefit recipients’ names, addresses, and Social Security numbers—a step officials say could help prevent fraud by spotting duplicate accounts and verifying eligibility.

Andrew McClenahan, United Council on Welfare Fraud: And the elephant in the room is that they’re concerned this administration is going to use those recipient rolls and the data in them to identify, locate, and deport illegal immigrants.

Sharyl (on camera): With fraud estimated at around 20% nationwide, how much is this actually costing taxpayers?

Lisa: For every $1 lost to fraud, taxpayers pay nearly $4 in true costs once you add the staff and investigators who chase the fraud, the audits and court cases and numerous ripple costs when ineligible people use services that were meant for others.

Watch video here.