If Minnesotans thought the state’s massive Medicaid and COVID-era fraud scandals had already hit rock bottom, new revelations suggest otherwise. What was once described as the largest welfare fraud scheme in U.S. history is now morphing into something even more alarming: a system so broken that indicted fraudsters are still collecting taxpayer money years later.

That disturbing reality was laid bare during a recent hearing of the Minnesota House Fraud Prevention and State Agency Oversight Policy Committee, chaired by Republican Rep. Kristin Robbins. What lawmakers uncovered paints a picture of breathtaking negligence, political entanglement, and a government apparatus seemingly incapable — or unwilling — to stop the bleeding.

Indicted… Yet Still Getting Paid

At the center of the latest bombshell is Gandi Yusuf Mohamed, who later changed his name to Gandi Abdi Kediye. Mohamed was indicted in February 2024 for his role in the infamous Feeding Our Future scandal, which siphoned off more than $1 billion in federal COVID relief funds intended to feed low-income children.

According to Rep. Robbins, Mohamed was charged with $1.1 million in money laundering connected to the scheme. His criminal trial is not scheduled until 2026.

But here’s the part that left lawmakers — and taxpayers — stunned:

Despite the indictment, Mohamed reportedly received an additional $49 million in payments from other Minnesota state programs between 2019 and 2024.

Yes, you read that correctly.

An individual already under indictment for massive fraud continued billing the state — and collecting millions — for years.

Political Connections Raise Red Flags

The scandal grows even murkier when political donations enter the picture.

Mohamed reportedly donated the maximum allowable contribution of $2,500 to Minnesota Attorney General Keith Ellison, a Democrat who has repeatedly downplayed concerns about fraud in the state’s social welfare programs.

Adding another layer of controversy, Mohamed’s brother was convicted in connection with the same Feeding Our Future scandal.

While there is no allegation that Ellison acted improperly, critics argue the optics are deeply troubling — especially given the attorney general’s role in overseeing enforcement and accountability within the state.

For many Minnesotans, it reinforces a growing perception that political favoritism and ideological blind spots are shielding systemic corruption from meaningful consequences.

A System Built on “Trust” — and Exploited

When questioned about how such a failure could occur, officials from the Minnesota Department of Human Services (DHS) offered a stunningly candid — and unsettling — explanation.

“Medicaid is a trust-based system,” DHS Inspector General James Clark told lawmakers. “We don’t have the technology or staff to look over everyone’s shoulder.”

That admission, while honest, may be the most damning indictment of all.

Minnesota taxpayers are being asked to fund a multi-billion-dollar Medicaid system that operates largely on the honor system, even after repeated evidence that the system is being systematically abused.

And the data backs up those concerns.

Explosive Growth in Providers, Minimal Growth in Demand

Over the past decade:

• Providers offering “adult day care” services increased by 43 percent
• Actual demand for those services rose by just 7 percent

That kind of discrepancy would trigger immediate audits in the private sector. In Minnesota’s public system, it apparently raised few alarms — until now.

Only recently did DHS Acting Commissioner Shireen Gandhi announce a two-year pause on issuing new adult day care licenses, effective February 1.

While the move signals recognition of the problem, critics argue it comes far too late — long after tens of millions, if not hundreds of millions, had already been lost.

Where Is Governor Tim Walz?

Throughout the unfolding crisis, Governor Tim Walz has faced mounting criticism for failing to impose meaningful oversight or accountability within his administration.

Despite repeated fraud revelations, Walz’s response has largely focused on new initiatives, task forces, and press conferences — rather than structural reforms or personnel changes.

Republicans argue that the governor’s hands-off approach has created an environment where fraud flourishes unchecked.

“This didn’t happen overnight,” one lawmaker said. “It happened because nobody was watching — and nobody was held accountable.”

The Case for Privatization Grows Stronger

For many critics, Minnesota’s ongoing Medicaid disaster underscores a broader argument: government-run healthcare systems lack the incentives needed to prevent waste, fraud, and abuse.

In the private sector, companies that lose tens of millions to fraud don’t survive. They invest in audits, compliance systems, and aggressive enforcement because their survival depends on it.

By contrast, government agencies face no such pressure. When fraud occurs, budgets often increase — not decrease — and responsibility is diffused across layers of bureaucracy.

“If this were a private insurer, heads would roll,” one analyst noted. “But in government, the taxpayer just gets the bill.”

A Crisis of Competence and Will

The Minnesota Medicaid scandal is no longer just about criminal actors exploiting loopholes. It has become a case study in institutional failure — a system designed without sufficient safeguards, overseen by leaders unwilling to enforce them, and sustained by political incentives that reward spending over scrutiny.

At a time when working families are grappling with inflation, rising healthcare costs, and higher taxes, the idea that tens of millions are flowing to indicted fraudsters is more than outrageous — it’s unacceptable.

There was a time when even Democrats championed basic oversight as a core responsibility of government. Today, that principle seems to have been replaced by blind faith in sprawling programs that no one truly controls.

And until that changes, Minnesota taxpayers will keep paying — not just in dollars, but in trust.