MN fraud crackdown: Gov. Walz announces legislative package, new state unit

Gov. Walz proposes fraud crackdown unit in MN

Gov. Walz has announced a new task force meant to "prevent, detect, investigate and penalize fraud" throughout the state.

ST. PAUL, Minn. (FOX 9) - Gov. Tim Walz announced a new legislative package and centralized investigations unit aimed at stopping fraud in Minnesota on Friday. This comes after multiple scandals were uncovered under his administration’s watch.

Gov. Walz unveils measures to combat fraud [RAW]

Minnesota Gov. Tim Walz signed an executive order that created a centralized state fraud investigations unit on Friday morning. The new legislation comes after multiple fraud scandals were discovered in recent years.

Watch: You can watch the full press conference on FOX 9’s YouTube page.

Crackdown on Fraud in Minnesota

What we know: State leaders layed out details of how they plan to avoid a repeat of the kind of systematic fraud that cost Minnesota taxpayers hundreds of millions of dollars.

The governor then signed an executive order to create a centralized state fraud investigations unit focusing on fraud and other financial crimes, which will be operated by the Bureau of Criminal Apprehension.

Additionally, the governor announced a new legislative package that would use artificial intelligence to enhance fraud detection and create tighter controls on spending. The goal of the package is to "prevent, detect, investigate and penalize fraud," according to a press release.

Press Conference

What happened: Governor Walz began the news conference by emphasizing that although generous state programs enhance people's lives, they do create opportunities for fraud.

"These are crimes against children," Gov. Walz said. "And what we've seen in Minnesota is these crimes have basically targeted programs that either feed children or help children in need, like we've seen recently with autism services. It's simply unacceptable."

The governor was also joined by Minnesota BCA Superintendent Drew Evans.

"Today, with the creation of a unified BCA financial crimes and fraud unit at the BCA, it's good news for state fraud investigations, it's good news for government efficiency and it's good news for every Minnesotan," Evans said.

GOP response

What they're saying: Minnesota Senate Minority Leader Mark Johnson (R-East Grand Forks) released a written statement in response to the announcement from Go. Walz.

"Minnesotans are rightfully outraged by the sheer amount and frequent reports of fraudulent use of their tax dollars. The executive action taken today by Governor Walz is too little and too late. It remains to be seen if Walz can accept recommendations by the Office of the Legislative Auditor, hold his commissioners accountable, enforce the current laws and roles to combat fraud, or work with Republicans to pass and approve legislation that will need bipartisan support to pass. That’s the true test of whether Walz and Democrats are going to take fraud prevention efforts seriously."

Minnesota House Minority Leader Lisa Demuth (R-Cold Springs) also shared a statement accusing the governor of lacking real accountability.

"Creating a fraud bureau overseen by the same administration that allowed over a billion dollars in fraud means today's executive action is nothing but smoke and mirrors. We need real change to crack down on fraud, and that starts with a process that is truly independent of the leadership that allowed fraud to run rampant over the last five years. House Republicans will be unveiling a comprehensive fraud package that treats this as the serious problem it is, and includes meaningful accountability for fraudsters and agencies who have failed to protect Minnesotans tax dollars."

A look at MN fraud cases

Dig deeper: This comes as multiple fraud scandals have been uncovered in recent years.

Back in 2019, FOX 9 uncovered concerns of up to $100 million in fraud involving the child care assistance program. Although an investigation could only confirm as much as $6 million was actually stolen.

Federal officials have also recently investigated alleged fraud involving some autism centers in Minnesota. The FBI conducted raids in December on two locations which were accused of taking a combined $20 million by billing Medicaid for services that were never provided.

Feeding Our Future: Minnesota made national headlines for the Feeding Our Future scandal, the largest COVID-era fraud scheme in the country, resulting in the theft of $250 million meant to feed children during the pandemic.

Several suspects have already been convicted, while others are still awaiting trial.

MN cracks down on fraud with new investigation unit

As Gov. Tim Walz is set to announce a new centralized state fraud investigations unit, FOX 9's Bill Keller examines notable fraud cases that have cost Minnesota taxpayers hundreds of millions of dollars.

Crime and Public Safety Politics Tim Walz