'We have not slowed down': Minnesota not out of the woods on massive fraud scandal, expert warns

A Minnesota policy analyst is raising alarms that the state has not done enough to combat widespread fraud in taxpayer-funded programs, even as new criminal cases continue to emerge.

Bill Glahn, a policy fellow at the Center of the American Experiment, said fraud in Minnesota remains an active and ongoing problem, not a resolved one.

"We have not slowed down, there is no sense in which the fraud has been stopped in Minnesota," Glahn said.

Glahn pointed to a surge in provisional assisted-living licenses as a particular area of concern. According to Glahn, the state's licensing database shows roughly 364 new facilities with provisional licenses appearing over the past year, on top of an existing total of about 2,500 licensed facilities statewide.

"I'm not sure if there's a real underlying driver in the demographics or the demand for these facilities, but it's odd that we have these assisted living facilities linked to Medicaid fraud, at the same time, the Minnesota Department of Health is approving more than one a day," Glahn said. "More than one new facility gets approved every single day, 365 days a year. And I don't think anybody is really giving any thought to, hey, maybe some of this is not on the up and up."

He has called for a 90-day moratorium on new assisted-living licenses while officials investigate.

Glahn's concerns are underscored by a recent criminal case filed by Minnesota Attorney General Keith Ellison's office. Salman Ahmed Elmi was charged Aug. 17 with eight felony theft offenses in connection with alleged Medicaid billing fraud. The criminal complaint also describes ties between the Medicaid-funded businesses, properties previously used for commercial sex services, and individuals investigators identified as part of a sex-trafficking organization.

"This is two scandals in one," Glahn said. "You have a commercial sex operation, actual brothels, housed in what were later licensed as assisted-living facilities under the Medicaid program."

Elmi had previously been recognized by the state as an "Outstanding Refugee."

"Elmi's case alone makes clear that this is not old news," Glahn said. "This particular fraud was going on just a couple of months ago."

In Glahn's view, the problem reflects a broader institutional failure that state leadership has not addressed. He argued that Gov. Tim Walz's administration lacks a regulatory approach capable of catching fraudulent schemes before they grow.

"Personnel is policy," Glahn said. "There isn't a regulatory mindset under the Walz administration. There isn't the mindset that we need to trust but verify."

He noted that despite the scale of the fraud, no officials have been fired for failing to detect or prosecute the schemes.

"Walz has never cleaned house, he's never fired anybody for not detecting the fraud or not prosecuting the fraud," Glahn said. "It's the same people doing the same thing, and that culture has never changed."

Glahn also suggested that the governor has shown little urgency in tackling the issue, pointing to Walz's travel schedule and his status as a lame-duck governor.

"They're just operating as business as usual," Glahn said. "We don't have anybody who's currently in office, currently in charge of state government, at least in the executive branch, who's doing anything substantive to address the fraud. It's just amazing how we see these reports every day, and we have Tim Walz traveling the country, traveling elsewhere. He's a lame duck. He doesn't seem to have any interest in closing out this chapter of his legacy with any kind of victory on the fraud front."

The criticism extends to other Democratic politicians who held power while the fraud was occurring. Lt. Gov. Peggy Flanagan is running for U.S. Senate, and U.S. Sen. Amy Klobuchar is running for governor, both seeking new offices despite serving during the period the fraud schemes grew.

Glahn pointed to Klobuchar's recently released anti-fraud platform, which includes proposals for a comprehensive audit of state government, as evidence that action could be taken now if there were political will.

"Amy Klobuchar has come out with her multi-point plan of how she's gonna fight fraud once she gets in office, if she gets elected in November," Glahn said. "I don't know why we couldn't implement this stuff today. She's called for a top-to-bottom audit of state government. She's got another few data points that perhaps were legislative proposals that didn't get passed. Tim Walz could call a special session. We could be in session on Monday, passing an anti-fraud agenda, but there's nothing. So I guess he just fundamentally doesn't have an interest in the subject."

Fox News Digital reported that requests for comment were sent to Walz's office, Klobuchar's campaign and the Minnesota Department of Health, but none were returned.

The Minnesota Department of Human Services, however, provided a statement outlining reforms it said have been implemented since the fall of 2024. According to the agency, those steps include identifying 14 high-risk services and freezing new provider enrollment in those programs, discontinuing the Housing Stabilization Services program, conducting on-site audits of autism-service providers, instituting new licensure requirements for autism centers and removing inactive providers from the system.

DHS also said it has expanded pre-payment reviews for providers in 13 high-risk fee-for-service programs and completed revalidation determinations for high-risk providers by the end of May. The department reported that since the beginning of 2025, it has stopped payments to 747 Medicaid providers over credible allegations of fraud and made 824 referrals to law enforcement.

The state-level fraud scandal in Minnesota has drawn national attention and is estimated to have cost taxpayers billions of dollars. A final report from a state fraud committee described a "culture of tolerance" that enabled the losses, pointing to broader oversight failures under the Walz administration.

For Glahn, the question is whether the recent reforms go far enough to address what he sees as the core issue: a lack of accountability.

"The messaging should start at the top," he said, "and right now, it's not."