Trump Admin To Deploy ‘Strike Teams’ to Minnesota as Fraud Investigation Expands

The Trump administration is escalating its response to mounting allegations of large-scale fraud in Minnesota, announcing the deployment of federal “strike teams” to scrutinize the state’s unemployment insurance system amid broader concerns over abuse in taxpayer-funded programs.

U.S. Labor Secretary Lori Chavez-DeRemer confirmed the move following testimony before a House Appropriations subcommittee overseeing labor, health and human services, education, and related agencies on May 15, 2025, in Washington.

The U.S. Department of Labor disclosed that it will conduct a targeted review of Minnesota’s unemployment insurance program after a series of reports revealed extensive fraud within Medicaid-funded human services programs—raising red flags about potential vulnerabilities across the state’s benefits systems.

In a formal letter to the Minnesota Department of Employment and Economic Development (DEED), federal officials warned that recent reporting on Medicaid fraud “could indicate potential fraud or abuse” within Minnesota’s unemployment benefits program as well.

“If there has been any related abuse of our (unemployment insurance) systems, it will not be tolerated, and I trust our specialized strike team to get to the bottom of this and report their findings directly to me,” Chavez-DeRemer said in a press release, per the Minnesota Reformer.

The Labor Secretary reiterated that message during an appearance on Fox Business, signaling a tougher enforcement posture under President Donald J. Trump.

“We’re going to send in a UI strike team to find out exactly what’s happening on the ground. We will NOT tolerate fraud under this administration,” she told host Stuart Varney.

State officials have pushed back against the federal scrutiny. A DEED spokesperson said the agency consistently exceeds federal Department of Labor standards for payment accuracy and maintains a fraud rate below the national average.

“We welcome the opportunity to illustrate the strength of our payment controls and oversight,” DEED said.

Still, Chavez-DeRemer’s intervention marks the latest move by Trump administration officials to focus on Minnesota, where multiple high-profile fraud cases have surfaced in recent years and drawn the attention of President Trump himself.

The President has publicly referenced the backgrounds of defendants charged in the Feeding Our Future and Medicaid fraud cases, noting that many have Somali ancestry—remarks that have intensified political debate surrounding accountability and oversight in the state.

Treasury Secretary Scott Bessent added to those concerns last week, saying his department is increasing scrutiny of funds flowing to what he described as “areas of concern, such as Somalia,” and examining claims that fraud proceeds may have been routed to the militant group al-Shabaab, according to the Reformer.

While those allegations—based on anonymous sources and reported by a conservative outlet—have not resulted in federal terrorism-financing charges, they have fueled calls for deeper investigations.

Once known as the “Land of 10,000 Lakes,” Minnesota has increasingly been labeled by critics as the land of billion-dollar frauds. Democratic Gov. Tim Walz has faced growing scrutiny as multiple large-scale fraud schemes have unfolded during his tenure.

The state continues to grapple with the aftermath of the $250 million Feeding Our Future case, while new reporting from City Journal has uncovered additional alleged fraud tied to Minnesota’s Medicaid Housing Stabilization Services program. That report also cited accusations that millions of dollars were funneled to the terror group Al Shabaab.

Investigators estimate total fraud losses across Minnesota’s public assistance programs at roughly $1 billion—a figure some believe may be far higher.

Fox News reported that the scope of the problem continues to expand. “Fraud investigators are finding in Minnesota is growing by the day,” Fox News National Correspondent Garrett Tenney said.

“Kelly Loeffler, who leads the Small Business Administration, says in the two days her agency has been investigating the state, they’ve uncovered at least $1 million in PPP fraud.”

Tenney added that whistleblowers told lawmakers “they believe the total amount of fraud could total up to more than $8 billion.”

Walz has defended the state’s record while facing questions about oversight and accountability.

“And in spite of the headwinds we’re up against, Minnesota ranks economically, economic growth, happiness, number of people insured, education levels near the very top,” Walz said, pointing to a budget surplus that does not account for the alleged fraud losses.

As federal strike teams prepare to descend on Minnesota, the Trump administration is signaling that no state—and no program—is beyond scrutiny when taxpayer dollars and public trust are at stake.