Trump Admin To Send ‘Strike Teams’ Into Minnesota Amid Widening Fraud Probe

U.S. Labor Secretary Lori Chavez-DeRemer appeared before the House Appropriations subcommittee overseeing labor, health and human services, education, and related agencies on May 15, 2025, in Washington—just as her department escalated scrutiny of Minnesota’s unemployment insurance system amid mounting concerns over widespread fraud.

The Department of Labor announced it is launching a targeted review of Minnesota’s unemployment insurance program following a wave of reporting detailing extensive fraud across the state’s taxpayer-funded human services. Federal officials indicated that revelations involving Medicaid-funded programs may point to broader systemic abuse, including within unemployment benefits administered by the Minnesota Department of Employment and Economic Development (DEED).

In a formal letter to DEED, the department warned that the reported failures could signal deeper vulnerabilities.

“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 reinforced that message during a Monday appearance on Fox Business, confirming that the Trump administration is dispatching an unemployment insurance “strike team” to Minnesota to broaden the investigation.

“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,” Chavez-DeRemer told host Stuart Varney.

DEED pushed back in a statement, claiming the state exceeds federal benchmarks 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,” the agency said.

Chavez-DeRemer’s action follows growing attention from the Trump administration, including President Donald J. Trump himself, who has repeatedly called out Minnesota as a national flashpoint for government waste, fraud, and abuse. President Trump has publicly highlighted the backgrounds of defendants charged in the Feeding Our Future and Medicaid fraud cases, noting that many have Somali ancestry—remarks that sparked backlash from Democrats but intensified scrutiny of the state’s oversight failures.

Treasury Secretary Scott Bessent added fuel to the debate last week, announcing that his department is tightening oversight of funds flowing to what he described as “areas of concern, such as Somalia,” while examining allegations that fraud proceeds may have been routed to the militant group al-Shabaab, according to the Reformer.

Those allegations, based on anonymous sources and first reported by a conservative media outlet, are not new and have not yet resulted in federal terrorism financing charges. Still, they have heightened alarm over the scope and consequences of Minnesota’s fraud crisis.

Once known as the “Land of 10,000 Lakes,” Minnesota is increasingly being labeled the land of billion-dollar frauds. Democratic Gov. Tim Walz has come under growing scrutiny as multiple large-scale schemes have surfaced during his administration.

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

Investigators now estimate total fraud losses across Minnesota’s public assistance programs at roughly $1 billion—and potentially far more.

Fox News has reported that the true figure may be staggering. “Fraud investigators are finding in Minnesota is growing by the day,” Fox News National Correspondent Garrett Tenney reported.

“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.”

Despite the mounting revelations, Gov. Walz has attempted to deflect criticism by pointing to broad economic indicators.

“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, citing a budget surplus—one that critics note does not account for the alleged billions lost to fraud.

With federal strike teams now moving in, Minnesota’s handling of taxpayer dollars is no longer just a state issue. It has become a national test case for President Trump’s promise to root out fraud, enforce accountability, and protect American taxpayers from systemic abuse.