Minnesota’s Fraud Crisis: The Truth They Don’t Want You to See
Dear 30B residents,
Today I want to speak plainly with you, because what’s happening in Minnesota right now should alarm every taxpayer—no matter your political beliefs.
You may have seen a video circulating online over the past week from a young investigative journalist, Nick Shirley. In just a few days, it racked up over 100 million views. While it’s encouraging to see people finally paying attention, the truth is this story didn’t start with a viral clip. Investigative reporting into misuse of taxpayer dollars has been happening for a long time—it just hasn’t received the attention it deserved.
On January 28, 2025, KSTP's Jay Kolls visited multiple Minneapolis daycare centers that had received millions in taxpayer funding through the Child Care Assistance Program. These same facilities had long histories of safety and licensing violations. Yet when KSTP arrived, no children or staff were present at some of the locations—despite these centers being among the highest recipients of public funds.
Let that sink in.
This wasn’t social media speculation. This was boots-on-the-ground investigative journalism. And it raised serious questions about how taxpayer dollars are being monitored, where oversight has failed, and how long warning signs were ignored.
The fraud documented in these reports predates the infamous Feeding Our Future scandal—the same scandal that stole over $250 million from taxpayers and led to nearly 90 indictments. We were told that it was handled. We were told that reforms would be made. We were assured that something like this would never happen again.
Yet here we are.
As Chair of the Public Safety Finance and Policy Committee, I've witnessed firsthand how fraud and fiscal mismanagement can devastate our communities. That's why I strongly supported the creation of the House Fraud and Government Oversight Committee—a dedicated body to investigate fraud and demand accountability in state government. In every sector of our legislature, the need for strong oversight is clear.
And what’s been uncovered is deeply disturbing.
Despite repeated warnings, fraud was ignored. Questions went unanswered. Concerns were dismissed. And while Minnesota leadership dragged its feet, federal authorities had to step in.
Since Governor Walz and Attorney General Ellison have failed to take action to stop or prosecute widespread fraud, the U.S. Attorney’s Office has been forced to intervene. They were the ones who led the Feeding Our Future prosecutions. And now, once again, they are leading investigations into ongoing fraud across Minnesota.
That should never have been necessary.
Attorney General Ellison’s office is technically responsible for prosecuting Medicaid fraud. Yet his office has not led these investigations. In fact, federal prosecutors have moved forward without their involvement—that speaks volumes. Even under the Biden administration, federal authorities apparently had little confidence in state leadership to handle this responsibly.
Last week, the situation escalated even further.
The U.S. Treasury, FBI, Department of Education, HUD, Small Business Administration, and Centers for Medicare and Medicaid Services all announced active investigations into fraud tied to Minnesota programs. Federal officials have already forced the Walz Administration to pause or cut off certain funding streams, and outside auditors are now being brought in to review multiple state programs.
That is unprecedented.
And it’s happening because Minnesota leadership failed to act.
Perhaps the most disturbing of all are the accounts from state employees who tried to speak up. Nearly 400 whistleblowers have come forward, saying they were ignored or even retaliated against for raising concerns. Many of them are now preparing to testify publicly. When they do, Minnesotans will finally see just how deep this problem goes—and how long it was allowed to continue.
This is exactly why I introduced House File 2532.
In 2023, the Legislature created the Community Crime and Violence Prevention Account, transferring $70 million from the general fund and allowing the Department of Public Safety to spend up to $14 million per year on eligible grants. On paper, it was intended to support public safety—but when we looked closer, many of the grants were going to NGOs whose executive officers were earning more than the Governor. This isn't political—its basic responsibility.
This may not make headlines. But this is the kind of work that actually restores public trust.
House Republicans have been calling out this kind of waste and fraud for years. In 2019, then–Rep. Lisa Demuth (R–Cold Spring) pushed legislation to address daycare fraud and strengthen oversight. This legislation was shot down by the DFL. Any concerns were dismissed. And for a long time, it felt like we were shouting into the wind while the media looked the other way.
But Minnesotans are honest people. They work hard. They play by the rules. And they deserve a government that does the same.
I’ll be honest—I’m frustrated. I’m disappointed. And I’m deeply concerned about what this says about the direction of our state. Minnesota used to be a place built on trust. Where accountability mattered. Where public service actually meant serving the public.
But I'm not giving up on that vision.
I’ll continue pushing for transparency, for real oversight, and for a government that respects the people who fund it. Because this isn’t about politics. It’s about doing right by the people who sent us here to serve them, not exploiting their hard-earned tax dollars or betraying their trust. Minnesotans deserve better.
Sincerely,
Representative Paul Novotny
Minnesota House of Representatives, District 30B
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