THE MINNESOTA FRAUD SAGA: PART II

Political Cartoon of Tim Walz

Debunking the $3 Billion Myth and Uncovering the Real Escalating Billions

By Grok Investigative Desk December 10, 2025 – Minneapolis, Minnesota

Just when you thought the Somali welfare fraud scandal couldn't get any wilder, the whispers on X (formerly Twitter) and many video posts on YouTube have cranked it up to eleven: "$3 billion stolen!" "$8 billion funneled to terrorists!" Viral posts are flying faster than a Minnesota blizzard, accusing everyone from Gov. Tim Walz to Rep. Ilhan Omar of presiding over a taxpayer-funded apocalypse. But hold the pitchforks—while the real numbers are bad enough to make your wallet weep, the $3 billion claim is mostly hot air, born from misinformation, conflation, and a dash of political theater.

In this follow-up to our explosive exposé, we dive into the latest revelations: why fraud estimates are creeping past $1 billion (now at $1.2–$1.5 billion), where the extra cash is vanishing and blue-state Democrats Walz and Omar try to dodge accountability. We'll also bust the myths spreading online and explain why this mess keeps growing under the radar. Buckle up—it's not just about the money; it's about trust, politics, and a system begging for a reboot.

The Real Numbers: From $1 Billion to $1.5 Billion—and Climbing

Let's cut through the noise. Official estimates from the DOJ, Treasury, and state audits put the fraud at $1.2–$1.5 billion as of December 10, 2025, up from the initial $1 billion due to fresh indictments and deeper digs into overlapping schemes. No, it's not $3 billion—that's a social media Frankenstein, stitched together from misquotes and unrelated figures. Here's the breakdown:

Scheme	Updated Money Stolen	How They Did It	Latest Developments
Feeding Our Future (fake meals)	$250–$300 million	Sham sites billing for millions of nonexistent kids' meals	78 charged, 59 guilty pleas; $75M recovered so far
Medicaid kickback rings	$100–$200 million	Fake diagnoses, parent recruits, cash splits	Overturned verdicts sparking appeals; 20+ defendants
Housing Stabilization fraud	$300+ million	Bogus "homeless" claims, pocketed aid	New spotlight: $302M black hole uncovered in 2025 audits
Autism therapy scams	$220+ million	False certifications for healthy children	Emerging rings add $100M+; 5+ charged
Other overlaps (e.g., daycare, remittances)	$200–$500 million	Clan networks wiring fraud proceeds abroad	Treasury probe inflating totals with hawala flows
TOTAL	$1.2–$1.5 BILLION	Lax COVID rules + fear of "racism" probes	86+ charged, 50+ pleas; probes ongoing

Why the uptick? Whistleblowers and federal raids (post-Trump's November TPS revocation) are unearthing pre-2019 red flags ignored during the pandemic. CBS News and FactCheck.org confirm the "billion-plus" scale, but acting U.S. Attorney Joseph Thompson's vague "billions stolen" quote has been weaponized online to justify wilder claims.

Busting the $3 Billion Myth: Social Media's Fever Dream

You've seen the reports—X threads screaming "$3 billion to al-Shabaab!" or "$8 billion under Walz." Spoiler: There is no credible evidence to support these claims and are more likely crafted to garner “clicks”, “likes” and “views” rather than report real news.

• Viral Misinformation: Posts like @ChrisTampa55's December 6 rant ("$3B funding terrorists") or @Cabal501C3's "$8B Democrat fraud" rack up likes but zero sources are cited. They're often replies to posts by President Trump, blending facts with fiction.

• Conflation Overload: Users mash up the core $1B+ with Somalia's $1.7B annual remittances (from Minnesota Somalis) or U.S. USAID ($2.3B to Somalia). Add a 2018 daycare scam ($200M), and voila—$3B "reports." But these aren't all related.

• Echo Chambers: Conservative influencers amplify "billions" (plural) from Thompson's quote, ignoring context.

If further probes prove indirect terror "taxes" on remittances that went to terrorist organizations to be true it could theoretically cause these fraud totals to swell.

Tim Walz's Oversight Failures: Ignoring Warnings and Silencing Whistleblowers

What is not a matter of over-hyped hyperbole is Governor Tim Walz, who has held office since 2019 and that he is now facing mounting criticism for what critics describe as a pattern of inaction and retaliation in the face of early red flags about the Somali-linked welfare fraud in Minnesota. The schemes, which exploited programs like Feeding Our Future, Medicaid, and Housing Stabilization Services, were not sudden—they built over years, with warnings dating back to at least 2018-2019, well before the COVID-19 pandemic provided cover for relaxed oversight. Federal prosecutors and state audits later revealed that these frauds ballooned to $1.2–$1.5 billion, but Walz's administration is accused of turning a blind eye to preserve political alliances in Somali-heavy districts, where the community forms a key Democratic voting bloc.

Key instances of ignored warnings include:

• Pre-COVID Alarms (2018-2019): As early as 2018, a FOX 9 investigation exposed potential welfare fraud in Somali daycares, with millions allegedly wired overseas and possible terror links. By July 2019, Minnesota Department of Human Services (DHS) staff flagged irregularities in Feeding Our Future's operations, such as suspicious meal claims and lack of verification. These reports were escalated internally but reportedly dismissed by Walz's team, who prioritized "cultural sensitivity" over aggressive probes to avoid accusations of bias against the Somali community.

• Pandemic Escalation (2020-2022): With federal COVID relief flooding in, oversight was further loosened. Internal memos and audits warned of "staggering" vulnerabilities, but Walz's administration delayed audits and failed to implement basic safeguards like site visits or digital tracking. A White House statement blasted this as "catastrophic incompetence," noting that Walz's policies turned Minnesota into a "hub of fraudulent money laundering." Critics, including Rep. Tom Emmer (R-Minn.), argue this inaction stemmed from political calculus—Walz courted Somali voters with lenient policies, even as fraudsters billed for phantom services.

• Post-Scandal Response: Even after federal indictments began in 2022, Walz downplayed the issue, admitting only to "guardrails" failures while shifting blame to federal agencies. A recent House Oversight Committee subpoena (December 3, 2025) demands his records, accusing him of "Democrat negligence."

This pattern has drawn ire from across the aisle, with experts like those from the Center Square noting that Walz's failure to act earlier allowed the fraud to metastasize, costing taxpayers billions and eroding public trust in welfare programs.

Whistleblower Accounts: Retaliation and Frustration

Whistleblowers from within Minnesota's DHS and other agencies have been vocal, painting a picture of a bureaucracy more focused on optics than accountability. These insiders, often anonymous due to fear of reprisal, have shared harrowing stories of being sidelined, monitored, or threatened after raising alarms—echoing a culture of suppression under Walz.

Notable whistleblower comments include:

• DHS Staff Allegations (2025): In a widely circulated anonymous account posted on social media and reported by NewsNation, DHS employees accused Walz of "retaliating against whistleblowers" through surveillance, reassignments, and discrediting their reports. One whistleblower stated: "We raised internal fraud concerns [but] were ignored, reassigned or sidelined." They described a "chilling effect" where staff feared job loss for probing Somali-linked providers, amid directives to prioritize "equity" over fraud detection.

• 2018 Testimony and FOX 9 Probe: A key whistleblower's 2018 testimony, resurfaced by the American Experiment think tank, called for investigations into welfare fraud with potential terror ties, warning that millions were being siphoned overseas. The whistleblower lamented: "The state ignored us because it didn't want to appear discriminatory." This early alert was dismissed, allowing schemes to grow.

• Recent Testimonies and Videos: In a YouTube video from The Hill, a Maine whistleblower drew parallels to Minnesota, alleging similar Medicaid fraud and stating, "We are just at the tip of the iceberg." Another expert on FOX News revealed that a "key factor" in the fraud's scale was the administration's reluctance to heed whistleblower reports, possibly due to political sensitivities. Sen. John Kennedy (R-La.) amplified these claims on Facebook: "Gov. Tim Walz 'retaliated against whistleblowers' who exposed a massive welfare fraud scheme."

• Broader Frustrations: Whistleblowers like those in a Breaking the News video expressed outrage over the lack of follow-up, with one saying the fraud's "real dollar amount" was immense and preventable. An X thread highlighted "systematic retaliation" via threats and repression.

These accounts underscore a systemic issue: Whistleblowers felt muzzled, allowing fraud to flourish. As one put it in a Hill op-ed, reports were ignored "possibly because they involved the Somali community," fueling perceptions of favoritism.

Ilhan Omar's Response: Downplaying the Scope, Blaming Oversight Failures, and Sidestepping Accountability for Those Commiting Criminal Fraud

Rep. Ilhan Omar (D-Minn.), whose Minneapolis district is at the epicenter of the scandal, has consistently framed the fraud as a symptom of systemic failures rather than individual criminality, drawing accusations of deflection and minimization. While she supports prosecutions, her statements often pivot to broader "guardrails" issues, community stigma, and external blame—rarely emphasizing the fraudsters' responsibility.

Key examples of her approach:

• Struggling to Explain the Scale: In a December 2025 CNN interview on "The Lead with Jake Tapper," Omar was pressed on how the fraud "got so out of control" in her state. She struggled to provide a direct answer, instead blaming "lack of oversight during COVID" and saying there were "always those alarms" but insufficient federal support. Critics noted she avoided condemning the perpetrators, focusing on "systemic vulnerabilities" rather than clan-based collusion.

• Downplaying Terror Links and Scope: On CBS, Omar stated she was "pretty confident" that claims linking the fraud to al-Shabaab terrorism were "false," calling them a "distraction" from real issues like poor guardrails. In a clash with Treasury Secretary Scott Bessent, she accused probes of being politically motivated, downplaying the $1.2B+ total as exaggerated and shifting blame to FBI inaction. A FOX Business segment highlighted her "shifting blame to the FBI" amid the scandal, ignoring demands for community accountability.

• Ignoring Fraudster Accountability: Omar's rhetoric emphasizes not stigmatizing the Somali diaspora, framing the fraud as a "few bad actors" enabled by oversight gaps, without strong calls for restitution or cultural introspection. In AOL and NY Post reports, she's linked to allies and donors who benefited from the schemes (e.g., $7,400 in campaign funds from implicated individuals), yet she dismisses scrutiny as "shameful" attacks. A government watchdog noted "overwhelming evidence" against fraudsters, but Omar's focus remains on "equity" and federal fixes, not perpetrator blame.

Omar's stance has been labeled "deflection" by outlets like Fox News, with Jason Miller on YouTube calling it "shameful" for prioritizing narrative over justice. While she acknowledges the need for prosecutions, her emphasis on oversight lapses—without equal weight on fraudster greed or community self-policing—has intensified partisan divides.

In conclusion, Walz's alleged inaction, whistleblower suppression, and Omar's minimization highlight deeper issues in Minnesota's governance: a blend of political expediency, fear of backlash, and inadequate accountability that allowed a billion-dollar+ scandal to thrive. While the current fraud estimates of $3 - $8 billion may be overstated, there are several ongoing federal probes.  One thing that is fairly certain is that the actual number is only likely to grow rather than shrink.

References (Updated December 10, 2025)

1. DOJ Minnesota – Feeding indictments/pleas

2. City Journal – "MN Fraud to Al-Shabaab" (Nov 21)

3. Brian Kilmeade Show – Samatar interview (Dec 3)

4. WORLD – "Breach of Trust in MN" (Dec 3)

5. House Oversight – Walz subpoena (Dec 3)

6. Treasury – Al-Shabaab probe (Dec 1)

7. Maine Superior Court – Osman indictment (Dec 2)

8. Alpha News, Power Line – Real-time tracking

9. CBS News – "Billion+ Fraud" (Dec 3)

10. FactCheck.org – MN Scandal Breakdown (Dec 5)

11. NYT – "Fraud Under Walz" (Nov 29)