In response to rising concerns about fraud in state programs, Minnesota Governor Tim Walz has established a new fraud investigation unit through an executive order and introduced several legislative proposals aimed at combating public fund theft.
During a news conference on Friday, Walz expressed frustration over individuals exploiting government programs, particularly in light of recent fraud investigations, including FBI raids on autism treatment centers. These investigations have uncovered significant evidence of fraudulent Medicaid claims linked to the state’s autism program, which also intersected with the notorious Feeding Our Future scheme that resulted in the theft of $250 million from a federally funded meal program for children during the pandemic.
“These crimes are not just financial offenses against the state; they are attacks on children,” Walz declared. “It’s simply unacceptable.”
The new centralized fraud investigation unit will operate within the Bureau of Criminal Apprehension (BCA), merging resources from the Minnesota Department of Commerce to enhance the state’s capability to prevent and prosecute fraud-related crimes. BCA Superintendent Drew Evans noted that this collaboration would better equip the state in its ongoing fight against fraud.
However, some Republican leaders have expressed skepticism about Walz’s initiative. House Republican Leader Lisa Demuth criticized the approach, arguing that establishing a fraud bureau under the same administration that allowed significant fraud to occur is insufficient. She called for truly independent processes to address the issue effectively.
In addition to the fraud unit, Walz has proposed several measures that will require legislative approval when lawmakers convene on January 14 for the 2025 session. These proposals include adding nine staff members to the Medicaid Fraud Control Unit, granting state agencies greater authority to halt payments to suspected fraudsters, and initiating a pilot program utilizing artificial intelligence to detect payment anomalies in Medicaid.
Minnesota IT Commissioner Tarek Tomes emphasized the need for advanced technology to combat sophisticated fraud schemes. He highlighted the potential of machine learning and AI to identify early signs of fraudulent activity, which could enhance the state’s ability to safeguard taxpayer dollars.
Walz is also advocating for a new law that would impose tougher penalties for the theft of public funds. His proposals further include establishing a provisional licensing system for autism service providers, as current regulations do not require such facilities to be licensed, resulting in limited oversight.
The governor’s legislative initiatives are projected to cost $39 million over the next two years, according to his office. Senate Minority Leader Mark Johnson remarked that Walz’s actions may be too late to effectively address the ongoing issues of fraud, stressing the importance of accountability and bipartisan support for meaningful reform.
In a show of collaboration, Walz welcomed input from Republican lawmakers and emphasized his commitment to a culture of compliance within state agencies. He urged agency leaders to prioritize vigilance and trust in dealing with public funds, acknowledging that a previous tendency to be overly trusting has contributed to the problem.
