Fraud is never acceptable, especially with taxpayer funds.
Fraud in Minnesota state programs is an issue that is
brought up frequently while I am visiting voters at the door. Eliminating fraud
must be stopped. As a first step to educate myself, I conducted the ChatGPT.com
inquiry pasted below.
Much may already be done to control fraud by the time I
take office in January 2027, but rest assured, this will continue to be one of
my key issues while bringing our state expenses to match our revenues that the
state collects. That said, it is premature to speculate exactly what
improvements will still be needed by 2027.
However, had I been in office earlier this year, I would
have joined the bipartisan group of Senators who successfully passed the bill
that would have created an independent office of Inspector General to root out
fraud. Unfortunately, the bill died in the House due to united DFL opposition pushed
by Gov. Walz.
While it is critical to set up our systems to prevent
fraud from happening in the first place, it is also critical to expose fraud as
soon as possible after it has occurred and punishment imposed after due process
of law. An Inspector General would enhance our ability to catch the fraud before
too much money has already left the public treasury.
As your next Senator, I will think and vote independently
where the facts indicate.
You said:
Minnesota has experienced some fraud in some of its benefit
programs. What steps were being taken to prevent that prior to its discovery?
What additional steps has the state taken since then to prevent fraud. What
else has been proposed but not passed by the legislature? What do other states
do to discourage fraud?
ChatGPT said:
Good question — there’s a lot to unpack because “benefit
fraud” in Minnesota has shown up in several programs (unemployment insurance,
child-nutrition/food programs, EBT/SNAP, Medicaid/provider fraud), and the
state’s response has included a mix of pre-existing controls, emergency
investigations and recoveries, new internal policies, and a wave of legislative
proposals. Below I summarize (1) what Minnesota had in place before the
big frauds were widely reported, (2) what the state has done since,
(3) promising measures that have been proposed but not (yet) passed,
and (4) what other states commonly do that Minnesota could
lean on. I cite state reports and reputable press/oversight sources so you can
follow up on specifics.
What Minnesota had in place before fraud was
discovered
Short version: Minnesota already used many standard
program-integrity tools — audits, county integrity programs, data matches,
random audits, and fraud reporting — but those controls were strained during
the pandemic surge of claims and emergency program expansion.
• County/state integrity programs and investigator networks
— Minnesota funds county-administered fraud prevention/investigation (the
“Integrity Reinvestment Project” model for cash, child care, health care, food
programs) and has Office of Inspector General functions to analyze provider
data. Minnesota Housemn.gov // Minnesota's State Portal
• UI (Unemployment Insurance) controls — DEED used identity-verification
checks, random audits of accounts, fraud reporting channels, and referral
processes; the Legislative Auditor and DEED reports note Minnesota had
established fraud-detection workstreams before and during the pandemic (though
capacity was stressed). Unemployment Insurance MinnesotaMinnesota Legislative Auditor
• SNAP/EBT and Child-Nutrition controls — USDA SNAP quality-control rules and
state sponsor oversight were in force; states perform eligibility checks and
reporting. (But program expansion and emergency feeding programs created new
sponsor relationships and new attack surfaces.) Food and Nutrition ServiceUnemployment Insurance Minnesota
What Minnesota has done since the frauds were
discovered
Minnesota’s post-discovery response has had several parallel
tracks: audits/investigations, criminal prosecutions, program changes and
recovery efforts, plus agency rule/authority changes.
• Audits and special reviews — the Office of the Legislative
Auditor (and a special review of the Minnesota Dept. of Education’s oversight)
examined how a nonprofit (Feeding Our Future) exploited child-nutrition
reimbursements and identified oversight gaps; those reports recommended clearer
application criteria and greater authority to block suspicious sponsors. Minnesota Legislative AuditorMinnesota House
• Criminal investigations & prosecutions — federal and state prosecutors
have charged dozens of people in large pandemic-era schemes (eg. Feeding Our
Future / “Feeding Our Future” indictments), with asset seizures and restitution
efforts underway. The state and federal recovery work is ongoing. AP News+1
• Agency operations and recovery — DEED and DHS reported recoveries and have
publicly described strengthened ID checks, referrals to law enforcement, and
more aggressive auditing of suspicious claims/accounts. DHS has built out
anti-fraud analytics and a public anti-fraud dashboard showing detection
activity. Star Tribunemn.gov // Minnesota's State Portal
• Short-term program controls — agencies tightened sponsor approval processes
for nutrition programs, improved documentation requirements, and (in some
cases) obtained statutory authority to impose criteria or withhold payments
when credible fraud allegations exist. The 2023 Legislature also enacted some
new sponsor-screening criteria; agencies seek additional rulemaking
authority. Minnesota HouseMinnesota Legislative Auditor
What has been proposed but not yet passed
(These items were actively discussed or had bills introduced
in recent legislative sessions.)
• Broader administrative tools: bills to let agency heads
temporarily withhold payments when there is a credible allegation of fraud (to
stop ongoing diversion while investigations run). Minnesota House
• Expanded criminal penalties and anti-kickback rules for human services
programs — proposals to criminalize kickbacks/knowingly filing false claims and
make some violations subject to the state False Claims Act. Minnesota House
• Increased oversight of state grants and nonprofit sponsors — new House
oversight panels and bills to tighten how legislators and agencies disburse
grants and how nonprofits are vetted. Some lawmakers proposed limiting direct
legislative transfers to nonprofits (partly in reaction to uneven
controls). Minnesota HouseMinnesota Reformer
• Series of broader “anti-fraud” package bills (both parties introduced
packages) — many are in various stages; some passed incremental authorities in
2023 but other ideas remain in committee or were modified. See session rollups
and local reporting for the evolving list. Minnesota HouseMPR News
What other states commonly do to discourage and detect
benefit fraud
Other states use a toolkit that mixes data science, identity
verification, legal levers, and program design. Many of these are proven best
practices and are recommended in federal audits/reports.
• Multi-state data cross-matching (Integrity Data Hub and
similar) — the NASWA Integrity Data Hub lets states cross-check claimant and
employer data across states to detect duplicate claims and identity theft. Many
states participate. naswa.orgBipartisan Policy Center
• Automated data matches with federal databases — match against SSA files
(including death records), Do Not Pay, state tax, and other systems to flag
suspicious claims. GAO/DOL guidance emphasizes these matches. Government Accountability Officepandemicoversight.gov
• Identity verification platforms — some states contract with third-party ID
verification (including facial-match tech) to reduce imposter claims; federal
reports note many states used such vendors during the pandemic but also flag
civil-liberty and accuracy concerns. (There’s trade-off between stopping fraud
and denying legitimate claims.) oig.dol.govWIRED
• Stronger sponsor/vendor vetting for nutrition and grant programs — states
using pre-award checks, financial-capacity reviews, site visits, and regular
reconciliation of meals served vs. reimbursements. USDA has a SNAP/Nutrition
Fraud Framework with state best practices. Food and Nutrition ServiceFood and Nutrition Service
• Analytics & risk-scoring — many states run fraud-analytics models that
flag claims with unusual patterns (IP addresses, same banking info for many
accounts, out-of-state claims, same phone/email, rapid successive claims) for
human review. GAO has listed analytics as a key control. Government Accountability Office+1
• Legal & recovery tools — aggressive recovery/unit overpayment
collections, debarment lists for vendors, and tighter criminal enforcement;
some states use civil False Claims Act suits in addition to criminal
charges. Mercatus Center
Practical tradeoffs and recurring themes
• Speed vs. integrity — the 2020–22 emergency programs show
the tradeoff clearly: faster disbursement increases fraud risk. Agencies must
balance timely benefits with identity and eligibility checks. (Federal reviews
and GAO underscore this.) Government Accountability Office+1
• Technology helps but isn’t a panacea — analytics, ID verification, and
cross-matching work well when they’re well-designed and well-monitored, but
they can produce false positives (hurting eligible people) and introduce bias
concerns. Oversight, appeals, and human review matter. WIREDNational Employment Law Project
• Multi-agency coordination & legal authority help — auditors recommended
clearer statutory authority for agency action (e.g., to set criteria, withhold
payments pending probes, or debar fraudulent sponsors). Minnesota’s auditor and
MDE reviews pushed for those powers. Minnesota Legislative Auditor+1
Quick recommendations (based on what other states do and
on Minnesota audit findings)
If you’re interested in what Minnesota could add
or accelerate, common effective steps include:
- Broaden
and accelerate participation in multi-state data hubs (IDH) and Do Not
Pay/SSA death matches. naswa.orgGovernment Accountability Office
- Strengthen
pre-award vetting for sponsors/vendors (financial checks, background
checks, mandatory site visits, staggered payments tied to verified
outputs). Minnesota Legislative AuditorFood and Nutrition Service
- Invest
in analytic capacity + staff for human review (not just automated
rejections) to avoid wrongful denials. Government Accountability OfficeNational Employment Law Project
- Clarify
statutory authority to pause payments when credible allegations exist,
plus quick appeals for affected recipients to protect due process. Minnesota HouseMinnesota Legislative Auditor
ChatGPT said:
You said:
·
Pull together the specific bills (bill numbers
and full text) that were introduced in 2023–2025 on sponsor oversight,
withholding payments, and anti-kickback rules, or
·
Produce a one-page timeline of the major
Minnesota fraud cases (Feeding Our Future, pandemic UI fraud findings, major
prosecutions) with links to the auditor and DOJ reports.
ChatGPT said:
Key sources I used (so you can follow up): Minnesota Revisor
bill pages for SF2856 and SF2677; HF2115 (Human Services omnibus); HF2260 (DHS
policy/anti-kickback language); and the Office of the Legislative Auditor
special review of MDE’s oversight of Feeding Our Future. MN Revisor's Office+3MN Revisor's Office+3MN Revisor's Office+3Minnesota Legislative Auditor
Minnesota benefit-fraud — Bills (2023–2025) and one-page
timeline
Part A — Specific bills (2023–2025) on sponsor oversight,
withholding payments, and anti-kickback rules
For each item: bill number (session), short summary, and
where to read the full text.
- SF
2856 (2025, 94th Legislature) — Payments termination / withholding
payments
- Summary:
Authorizes agency heads to temporarily withhold payments to program
participants (providers, vendors, individuals, or associated entities)
when there is a credible allegation of fraud pending investigation;
includes procedural rules for review and timelines.
- Full
text
(Revisor): https://www.revisor.mn.gov/bills/text.php?number=SF2856&session=ls94&session_number=0&session_year=2025&version=0
- SF
2677 (2025, 94th Legislature) — State contracts allowing withholding of
fraudulent payments
- Summary:
Requires state contracts with the federal government to include
authorization permitting the state to withhold payments identified as
fraudulent; clarifies contracting language and state authority for
federal grant/contract situations.
- Full
text
(Revisor): https://www.revisor.mn.gov/bills/text.php?number=SF2677&session=ls94&session_number=0&session_year=2025&version=latest
- HF
2115 (2025, 94th Legislature) — Human Services omnibus / passed (Chapter
38, 2025)
- Summary:
Omnibus human services policy bill (passed and signed). Includes
provisions that (a) create state-level anti-kickback criminal
prohibitions in some human services programs (for example CCAP), (b)
strengthens penalties and enforcement tools, and (c) other
program-integrity measures.
- Full
text (Revisor, Engrossed/Session
Law): https://www.revisor.mn.gov/bills/text.php?number=HF2115&session=ls94&session_number=0&session_year=2025&version=list
- HF
2260 (2025, 94th Legislature) — DHS policy bill (anti-kickback measures)
- Summary:
Department of Human Services policy bill language that adds anti-kickback
provisions and creates criminal penalties for offering/receiving
prohibited remuneration in MA and CCAP-related contexts; codifies federal
anti-kickback concepts into state statute.
- Full
text
(Revisor): https://www.revisor.mn.gov/bills/text.php?number=HF2260&session=ls94&session_number=0&session_year=2025&version=0
- HF
4782 / HF 856 and other related 2023–2024 proposals
- Summary:
During 2023–2024 multiple bills and omnibus state government packages
included narrower sponsor-oversight language and some statutory criteria
for child-nutrition sponsors (a partial legislative response after
Feeding Our Future disclosures). Example: HF4782 (2024 draft containing
anti-kickback language proposals) and provisions in the 2023 State
Government omnibus.
- Representative
draft/full texts: (search Revisor for HF4782 / 2023 omnibus state
government bills and the 2023 session laws)
Part B — One-page timeline: major Minnesota benefit-fraud
incidents & response (concise)
March–June 2020 (pandemic starts): Emergency
program expansions (UI, nutrition flexibilities) begin at federal and state
levels. Faster disbursement increases fraud attack surface.
2020–2021 (pandemic UI surge): Minnesota — like
many states — experienced massive volumes of UI claims. Federal oversight later
reported states paid significant fraudulent UI claims during Apr 2020–Mar 2021.
Minnesota’s DEED implemented identity checks, hotlines, and fraud reporting but
auditors later noted reporting and referral gaps.
2021–2022: Rising law-enforcement investigations
into pandemic-era schemes (UI and other programs). Federal and state law
enforcement began coordinated reviews into suspected organized fraud networks.
2022–2024 — Feeding Our Future uncovered / prosecutions
begin: Federal prosecutors and the FBI identify an alleged large fraud
ring tied to a Minnesota nonprofit sponsor, Feeding Our Future,
that allegedly submitted false claims for hundreds of millions of dollars in
child-nutrition reimbursements during the pandemic. Investigations,
indictments, and guilty pleas begin.
April 2024 — Office of the Legislative Auditor (MDE
oversight) report (summary): The OLA released a special review of the
Minnesota Department of Education’s oversight of Feeding Our Future, concluding
MDE’s sponsor oversight and response to complaints were insufficient and
recommended clearer statutory authority for MDE to set application criteria,
expedite suspensions, and improve documentation. (See OLA report link below.)
2023–2025 — Legislative and administrative responses:
- 2023:
Legislature added some sponsor-criteria in statute (narrow changes) and
agencies began tightening sponsor approval and documentation requirements.
- 2024–2025:
Multiple bills introduced to expand administrative withholding authority
(e.g., SF 2856, SF 2677), codify anti-kickback crimes at the state level
(HF 2260 / HF 2115 omnibus), and strengthen penalties and recovery tools.
Some measures were adopted in the 2025 human services omnibus (HF2115) and
companion enactments; others remained in committee or as introduced bills.
2023–2025 — Prosecutions & convictions: Federal
prosecutors have charged and secured dozens of convictions tied to Feeding Our
Future and other pandemic-era schemes (multiple DOJ press releases document
guilty pleas and sentences; prosecutions of organizers and facilitators
continue; asset forfeiture and restitution efforts are ongoing).
Ongoing / recovery: State and federal agencies
continue audits, criminal investigations, civil recoveries, and
statutory/regulatory changes. Agencies are also investing in data-matching,
analytic tools, and strengthened sponsor vetting.
Key primary documents and where to read them (full texts)
- Office
of the Legislative Auditor — Minnesota Department of Education:
Oversight of Feeding Our Future (Special Review, 2024): PDF
— https://www.auditor.leg.state.mn.us/sreview/pdf/2024-mdefof.pdf
- DOJ /
U.S. Attorney (District of Minnesota) — multiple press releases on Feeding
Our Future prosecutions (examples): https://www.justice.gov/usao-mn
- SF
2856 (2025) bill text
(Revisor): https://www.revisor.mn.gov/bills/text.php?number=SF2856&session=ls94&session_number=0&session_year=2025&version=0
- SF
2677 (2025) bill text
(Revisor): https://www.revisor.mn.gov/bills/text.php?number=SF2677&session=ls94&session_number=0&session_year=2025&version=latest
- HF
2115 / Omnibus Human Services (2025) — Engrossed / Session
law: https://www.revisor.mn.gov/bills/text.php?number=HF2115&session=ls94&session_number=0&session_year=2025&version=list
- HF
2260 (2025) bill text (Revisor): https://www.revisor.mn.gov/bills/text.php?number=HF2260&session=ls94&session_number=0&session_year=2025&version=0
Prepared and paid for by Olson Senate Committee, P.O. Box
15, Prior Lake, MN 55372
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