Federal investigators have charged more than 70 people in what prosecutors are calling the largest pandemic-era benefits fraud in U.S. history. Hundreds of millions of dollars meant for children, disabled families, and low-income households were allegedly stolen through fake food programs, ghost childcare centers, and phony autism therapy claims in Minnesota.
The schemes targeted programs like Medicaid, child nutrition assistance, childcare aid, and housing support. Many families who depend on these benefits are now facing delays and frozen payments as federal agencies tighten rules nationwide.
The Feeding Our Future case is the largest. Prosecutors say fraudsters stole between $250 million and $500 million from federal child meal programs. The money was supposed to feed hungry kids. Instead, it allegedly went to mansions, luxury cars, and properties overseas.
More than 60 people have been convicted so far. Federal agents say the thieves created fake food sites, forged attendance records, and billed for meals that were never served.
“This was industrial-scale theft,” U.S. Attorney Joseph Thompson said in a recent statement. He described the fraud as a coordinated operation that exploited COVID-19 emergency waivers designed to help families quickly.
The U.S. Department of Justice announced a new National Fraud Enforcement Division in early January 2026. Federal prosecutors in Minnesota have doubled their staff to handle the caseload. The FBI has conducted multiple raids, and investigators are going door-to-door to interview witnesses.
At least 14 state programs are now considered “high-risk” for fraud, according to federal audits. These include:
- Housing Stabilization Services
- Early autism intervention programs
- Home health care
- Childcare assistance
Federal estimates suggest up to $9 billion in suspicious billings or improper payments since 2018, based on audits and ongoing investigations.
In December 2025, viral videos by influencer Nick Shirley showed empty storefronts in Minnesota that were billing Medicaid as active childcare centers. The videos sparked national outrage and renewed scrutiny.
The White House posted on X on January 14, 2026: “MINNESOTA FRAUDSTERS WILL BE HELD ACCOUNTABLE! The videos from Nick Shirley have shed tremendous light… DOJ will continue to lead the effort to identify and prosecute fraud.”
But the crackdown has consequences for honest families. Federal agencies have paused childcare payments in some areas and delayed Medicaid reimbursements for certain services. Families applying for SNAP benefits are facing new recertification requirements and longer wait times.
Gov. Tim Walz withdrew from his 2026 reelection campaign on January 5, amid criticism that his administration ignored early warnings about the fraud. House Oversight Committee hearings accused state officials of failing to act and retaliating against whistleblowers.
Federal officials stress that most members of Minnesota’s Somali-American community—the largest in the U.S.—had nothing to do with the fraud. Prosecutors say the stolen money went to personal luxuries, not organized crime or terrorism.
More charges are expected in the coming weeks. The Department of Homeland Security and Treasury Department are also investigating money laundering tied to the cases.
Families who need help with benefits should check benefits.gov or contact their state agency directly. Updates on the investigations are available at justice.gov and whitehouse.gov.
