Hearings to examine fighting fraud in Minnesota and beyond.

Good afternoon. Hereby call to order this hearing, Somali scammers, fighting fraud in Minnesota and beyond. There are few crimes more morally repugnant than stealing from vulnerable children. Every dollar stolen is a meal not eaten, a doctor's visit missed, and a future diminished. Child welfare fraud plunders our children's potential and erodes our nation's future. And disturbingly, at the start of this new year, America has learned that this kind of looting was not occurring in some distant or lawless place, but in the heart of America's Midwest. Federal prosecutors in Minnesota now estimate that half or more of the eighteen billion dollars spent since twenty eighteen across fourteen Minnesota welfare programs may have been lost to fraud. If confirmed, the amount stolen would rank among the largest welfare frauds in American history. In Minnesota, a welfare system designed to uplift the most vulnerable children was treated like an open ATM, exploiting both taxpayers, and the public trust extended to immigrant communities. Over the last decade, Minnesota Democrats didn't just fail to stop the fraud. They made it easy and profitable, and in a totally lawless fashion, silenced anyone who pointed it out. Taken together, the record shows that the fraud was not accidental or unforeseeable. but was the product of deliberate inaction, willful blindness, and calculated abuse. Today, we will proceed in three parts. First, we will show that Minnesota was clearly warned by journalists, by auditors, and by its own independent oversight bodies, and that the state responded by passing laws and promulgating safeguards intending to stop this abuse. Secondly, we will examine how Minnesota's Democrat leadership deliberately turned a blind eye, failed to enforce those safeguards, and in some cases retaliated against those who tried to sound the alarm. And third, we will explain how the fraud actually took place, the mechanics by which these schemes operated, and the very real harms they inflicted, not only on taxpayers, but on vulnerable children, and on law abiding Somali families whose trusts and identities were exploited. First, Minnesota was warned. Let me be clear about one foundational fact. Minnesota was not caught unaware. Minnesota was warned repeatedly, unmistakably, and years in advance. This fraud did not arrive suddenly. It did not emerge from an unforeseen loophole. And it did not occur without notice. As far back as twenty ten, the Milwaukee Journal Sentinel exposed widespread child care fraud across the upper Midwest in a Pulitzer prize-winning investigation that sent a clear warning to regulators, providers, and the child care industry as a whole. Without strong oversight and verification, fraud would flourish. Minnesota was on notice. Nearly a decade later, Those warnings were no longer journalistic. Now they were official. In twenty nineteen, the Minnesota office of the legislative auditor issued a formal report examining Minnesota's child care assistant program, the CCAP. The legislative auditor identified serious deficiencies in oversight, including inadequate attendance verification, weak financial controls, fragmented enforcement, and an over-reliance. on provider self-reporting. The auditor warned plainly that these conditions created a high risk of fraud. Critically, the auditor estimated that approximately one hundred million dollars of child care assistant programs' funds had already been lost to fraud. Minnesota Democrats responded, but not out of vigilance, out of political necessity. The report landed just months after they won their new majority in the state in the twenty eighteen elections. Faced with a damning audit and mounting political pressure, Democrats acted, on paper at least. Following the twenty nineteen report, the legislature amended CCAP statutes and promulgated new enforcement policies designed to close precisely the gaps the auditor had identified. By twenty nineteen, Minnesota had the warnings, the audit findings, and a panoply of legal authorities to detect, stop, suspend, and prosecute fraud. But that brings us to the second part of the story. Democrat leadership ignored the law they had just passed, attacked whistleblowers, and failed to enforce it. Once Minnesota had been warned and once Minnesota Democrats wrote the solution into law, the duty was enforce the law. Instead, they treated legislation as a press release, not a mandate, providing political cover while allowing the money to keep floating. Federal audits later confirmed what internal staff had warned all along. Minnesota failed to verify attendance, failed to use its suspension authority, and failed to intervene early when red flags appeared. What's worth ra- what's worse, rather than go after the fraudsters, the state went after the whistleblowers. On January thirty-first, twenty twenty-six, the Minnesota Star Tribune reported that staff at the Minnesota Department of Human Services repeatedly flagged fraud risks and lax lax safeguards, only to have those concerns ignored, dismissed, or met with retaliation. According to that reporting, current and former DHS employees sent an anonymous letter to the US House Committee on Oversight and Accountability, describing serious and systemic failures dating back to at least twenty nineteen. Employees reported being reassigned, called racist and xenophobic, sidelined, excluded from key discussions, and in some cases subjected to what they described as threats or workplace surveillance after raising red flags. Minnesota's Democrat leaders did not reward integrity. Instead, they punished it. When bipartisan legislation was introduced to establish an independent Inspector General Minnesota Democrats blocked it. The Democrat House Speaker at the time explained why. An Inspector General quote, " is not part of the budget framework," citing an eighteen million dollar cost over four years. As billions were being pilfered by fraud, and as whistleblowers were being silenced and punished, Minnesota Democrats had the gall to say that an inspector general costing only four point five million a year was too expensive. That wasn't fiscal prudence, that was a choice. It was willful blindness. The programs move billions of dollars each year and they're concentrated within a relatively small number of administrative pipelines. Minnesota's Somali community receives welfare benefits at rates far higher than the state average, making these programs both financially significant and politically sensitive. In a state where the two closest statewide elections were decided by less than one percent, the Somali community votes overwhelmingly Democrat. The numbers are stark. Eighty-one percent of Somali households in Minnesota receive some form of welfare, eighty-one percent, compared to twenty-one percent of non-Somali households. Fifty-four percent of Somali households receive food stamps, compared to seven percent of non-Somali households. Seventy-three percent are enrolled in Medicaid, compared to eighteen percent of non-Somali households. And twenty-seven percent receive cash assistance, compared to six percent. of non-Somali households. In December twenty twenty five, Minneapolis resident, resident David Hoek, who is here today, accompanied by journalist Nick Shirley visited child care centers, autism clinics and health care facilities across Minneapolis. They went on a Tuesday. Not a Saturday, not a holiday, not in the middle of the night. Tuesday during the day, what they found? Blacked out windows. Misspelled or non-existent signage, I will say we will always remember the leering center that promoted good leering. Multiple quote providers registered to the same address and no kids present. It's amazing having child care centers and autism centers with no kids. And by the way, it's not subtle. You walk up, there's no toys, there's no kids, and the windows are blacked out. This is not hidden. It is obvious, except for the Democrats that didn't wanna see it. Had the state done its job, had it sent inspectors instead of press releases, that fraud would have been obvious. To understand just how calculated this fraud became, consider the most disturbing example of all. In September twenty twenty five, federal prosecutors charged Asha Farhan Hassan for orchestrating a fourteen million dollar fraud scheme against Minnesota's EIDBI autism program. The program exists to provide medically necessary early and intensive care to children with autism. Fraudsters turned it into a profit engine. According to the charges, Hassan and her partners recruited children from the Somali community, paid parents cash kickbacks, used unqualified individuals as quote unquote therapists and build Medicaid for services never provided or grossly inflated. Where a child did not already have an autism diagnosis, the scheme allegedly worked to obtain one. In other words, there was no child they could not qualify because the diagnosis itself became the means to an end. According to the Univer- University of Minnesota, one in twelve eight year old Somali children in Minnesota was diagnosed with autism. compared with one in twenty-eight non-Somali children statewide. In Minnesota, Somali children are seven times more likely than their non-Somali peers to receive autism quote-unquote treatment. These figures show extraordinary concentration and extraordinary billing, the precise conditions fraudsters ex exploit. And here's the deepest human cost. Telling an immigrant child that he has autism, not because he does, but because someone wants to get paid. Imagine the weight of that diagnosis on parents who may not speak English fluently, who trust authority, who believe the government would never lie about their child's health. That label can follow a child for life, shaping education, self-image and opportunity. Doing that for financial enrichment is not merely fraud, it is the deliberate exploitation of children and the calculated betrayal of parents. And once fraud proceeds are laundered and sent overseas, in twenty twenty three, the Somali diaspora sent nearly two billion dollars back to Somalia. Once they're sent overseas, they're effectively unrecoverable. Meanwhile, Al Shabaab, the US-designated foreign terrorist organization and Al-Qaeda's affiliate in Somalia controls large swaths of territory and systematically extorts money moving through its financial channels. When billions of dollars are stolen from US welfare programs and sent abroad, there is no credible way to ensure those funds do not enrich jihadists within Al Shabaab. As one confidential source told the Manhattan Institute, the largest funder of Al Shabaab, a Islamist terrorist organization in Somalia, is the Minnesota taxpayer. Listen to that again. The single largest funder of Al Shabaab, a terrorist organization in Somalia is the taxpayers of Minnesota. Taken together, the evidence before this committee leads to one unavoidable conclusion. Minnesota was warned. Minnesota's Democrat leadership failed to enforce the laws it passed. And that failure allowed organized fraud to flourish, harming children, betraying families, and robbing the public of trust and resources. This hearing is necessary because Minnesota's elected Democrats were complicit in this fraud. They stood to benefit politically from looking the other way as fraudsters robbed the taxpayers of Minnesota. Look at the bench of witnesses. To this hearing, I invited Governor Tim Walz. He's not here. I invited Attorney General Ellison. He's not here. I invited Mayor Frey. And Tiki Brown, the Commissioner of the Minnesota Department of Children, Youth and Families. Not one of them agreed to testify and defend his or her conduct. They are hiding out after having served as the lookout in a bank robbery that was robbing the taxpayers of Minnesota. The people of Minnesota and the American people deserve better. And not a one of these Democrats has given any credible excuse why they're terrified to answer questions. Now recognize the ranking member.

What a strange thing it is to have a hearing about Minnesota that doesn't address what's on the front pages of every newspaper about Minnesota. The violent and unwelcome federal occupation of its largest city by the chairman's political party, an occupation that has already caused the deaths at federal agents' hands of two American citizens and left many more injured and that is roundly criticized by law enforcement leaders, including those in Texas, as unprofessional and dangerous. That may explain why elected officials in Minnesota have something better to do today. No mention today of one hundred violations by agents there of federal court orders. No mention of the sacking of the vain little commander of that operation. No mention of the venomous lies told by Secretary Noem

Also no.

about the shooting victims without investigation or sympathy as their bereaved families grappled with grief at their deaths. I've done law enforcement briefings and rule one is to tell the truth. What a strange thing it is to have a hearing about fraud in Minnesota that doesn't acknowledge that the wide-ranging investigation and prosecutions of nine billion dollars worth of fraud in that state began years ago under the Biden administration. No mention of the fact that the current administration drove out the career prosecutor leading those cases. When it demanded he investigate the victim of an ICE shooting, not the agent who did the shooting. Fourteen prosecutors have left the Minnesota U. S. Attorney's office in the past month. And what a strange thing it is to have a hearing about fraud that doesn't look at the colossal fraud perpetrated by this administration. Starting with the president's own conviction of thirty-four felony fraud counts. The dismissal of inspectors general who watch out for fraud. The destruction of the Justice Department components that prevent and prosecute Corruption. The self-serving billion-dollar crypto-deals that line the pockets of the president and his family. The pay-to-play presidential pardons that strip fraud victims of their restitution. The disabling of consumer protection offices and regulators that defend the public against fraud. It is a carnival of fraud and self-dealing. On top of all this, the biggest fraud ever perpetrated in America is going on right now, facilitated and accelerated by the Trump administration and implemented through a massive semi-covert climate denial fraud operation and a twinned massive, semi-covert, dark money political corruption operation. This fraud costs Americans hundreds of billions of dollars every year. Seven hundred and seventy billion dollars annually. According to the International Monetary Fund. Eight hundred and twenty billion dollars annually in health care costs, from another report. Climate-related disasters cost the United States one hundred and fifteen billion dollars last year. How was this fraud done? This long-running fraud operation began when oil industry scientists reported to their bosses the dangers of fossil fuel pollution, and instead of responsible stewardship, the bosses hid the reports. That was stage one. Stage two moved from hiding to purposefully misleading. A federal court shut down Big Tobacco's fraud operation to mislead the public about the dangers of tobacco That tobacco fraud operation was quickly repurposed by big oil into its own fraud operation to mislead the public about the dangers of its product. Stage three kicked off with Citizens United, which gave the fossil fuel industry the ability to spend unlimited amounts of political money and spend it secretly. This dark money political corruption operation swiftly strangled bipartisanship on climate. Before stage three, there were multiple bipartisan climate bills in the Senate, and John McCain ran for president on a legitimate climate platform. All of that was killed by fossil fuel dark money. dangerous stage where the corruption is so entrenched that the fossil fuel industry can infiltrate and weaponize the federal government as its own industry tool to defeat energy competitors whose product is cleaner, safer, and cheaper. But no Republican dares talk about that problem any longer. Such is the party's dependence on those big fossil fuel donors. President Trump asked the fossil fuel companies for a one billion dollar campaign slush fund in twenty twenty four and they expect and got a return on their investment. Quid pro quo. The lies and fraud are legion, but to use just one Rhode Island-based example, senior cabinet officials continually assert that offshore wind is unaffordable, when the opposite is true. Anyone reading the contract can see that Revolution Wind will bring nine point nine cent kilowatt hours to an eighteen cent kilowatt hour grid. The administration's weaponized attacks, rejected as pretextual, went zero for five in federal court, including before a Trump appointee. Instead of focusing on this massive fraud, or holding the administration accountable for the monumental levels of fraud and corruption in its own ranks, a Texas chairman holds a hearing on fraud in Minnesota, which is neither the biggest issue in Minnesota, nor the biggest example of fraud. There's a biblical saying about the mote. in another's eye and the beam in your own from the Sermon on the Mount. "Why beholdest thou the mote that is in thy brother's eye, but considerest not the beam that is in thine own?" asked Jesus. I will leave it at that.

I wanna commend my Democrat colleagues for giving an ode to Homer Simpson. When something is distracting, scream, scream, squirrel! Because we saw a speech about global warming. We saw a speech about orange man bad. We saw a speech about how today's Democrat party exists seemingly exclusively to defend violent criminal illegal aliens and to demonize law enforcement. And yet miraculously, in that enormous word cloud, virtually nothing about nine billion dollars stolen from Minnesota taxpayers by Somali fraudsters with Democrat politicians knowing full well what is happening, facilitating it, and harvesting votes and campaign dollars from the people robbing the children of Minnesota. My Democrat colleagues want you desperately not to focus on those facts. And so instead, miraculously, the Democrats have discovered the Sermon on the Mount. Well, this hearing is going to focus on nine billion dollars stolen from the taxpayers and hundreds of millions of those dollars going to the Al-Shabaab terrorist organization funded by the Democrats. As much As my colleagues on that side of the aisle don't wanna talk about it. With that, I recognize the chairman of the full committee, Chairman Grassley.

Senator Cruz, thank you for chairing this important subcommittee hearing. And uh, I wanna point out an association with your emphasis in your remarks about the importance of whistleblowers and uh uh inspectors generals uh rooting out uh and exposing uh fraud. Uh I'll speak about that a little bit, but uh not as strongly as you have, and I wanna say that I appreciate your bringing that up. Uh during my time in the Senate, I've exposed waste, fraud and abuse within many government programs. At the end of last year, the American people loaned learned of shocking and sophisticated fraud schemes in Minnesota. Billions of taxpayers' dollars may have been lost. to crime. What happened in Minnesota is as bad as it gets. These fraud schemes have targeted federal programs designed to help children with autism, the elderly, and small businesses. It's deplorable that fraudsters would target programs designed to help Americans struggling to take care of their children and their families. It's also deplorable that the Walz administration allegedly retaliated against whistleblowers who tried to expose this fraud. If true, such retaliation should not go unpunished. In large scale fraud schemes like these, whistleblowers are public's greatest asset and allies. Congress, federal agencies and state agencies must protect whistleblowers. And the executive branch must hold criminals fully accountable to the law. That's why in January I wrote to nearly ten agencies, including the Department of Justice and the FBI, regarding the allegations. This is all about accountability. I wanna know what the government's doing to solve these problems, hold wrongdoers accountable, and take steps to ensure this never happens again. Director Patel announced in December twenty twenty five that the FBI deployed personnel and investigative resources to Minnesota. Attorney General Bondi has ordered additional Department of Justice prosecutors to Minnesota. And on January the eighth, the Trump administration announced the creation of a new division for national fraud enforcement within the Department of Justice. This new division will focus on rooting out fraud across the federal government and it'll be led by a new assistant attorney general. The treasury department's introduced uh additional reporting requirement for banks and other financial institutions in Minnesota. These new requirements are designed to alert regulators to suspicious overseas transfer of cash. Regarding these financial oversight efforts, Secretary Bessette uh recently stated quote, Minnesota is going to be the genesis of a national rollout. A national approach is needed now more than ever. The Department of Education has also reportedly begun creating a dedicated fraud detection scheme and has already prevented one billion dollars in student aid fraud. since January, twenty twenty five. I expect the administration to provide the committee with updates regarding these efforts. However, the as the title of this hearing suggests, allegations of fraud have extended beyond Minnesota to other states. Fraudsters are operating uh on a national scale, affecting federal programs from Medicaid to student aid and beyond. The federal government and state governments whether Republican or Democrat, are in charge, must always respect the taxpayers and their monies. The same is true of the Inspector General community. Federal and state agencies across the country must work together to get to the bottom of these sophisticated fraud schemes. This should not be a partisan issue. Senator Cruz, thank you again for holding this area.

Thank you, Mister Chairman, I now recognize the ranking member of the full committee.

Thank you, Mister Chairman. This is the subcommittee's second hearing this year. Last month we had to listen to my Republican colleagues push for the impeachment of federal judges who had the nerve to rule against the Trump administration. Today's hearing marks another low. In the last month, federal agents shot and killed two of our fellow Americans in Minnesota. Bystanders and journalists have documented numerous abuses of constitutional rights by federal agents in Minneapolis, including warrantless arrest, use of excessive force, racial profiling, surveillance of protesters, and the detention of US citizens and children. This abuse of power and much needed oversight of the Trump administration should be the focus of this subcommittee, because of the individuals involved in what they have done. Somewhere along the way, many of my Republican colleagues decided they could tolerate the scenes of agents shooting innocent American citizens. But the timely topic to them is fraud by one immigrant group in that same state. As part of their need, ongoing need to carry water for the president, they have chosen to embrace his bigoted, attacks on Somali immigrants, whom he has called garbage. The shameful title of today's hearing reflects that same approach. I want to be clear. Fraud is a crime and it should be prosecuted accordingly. In fact, it was the Biden Justice Department that opened the Minnesota fraud investigation and brought the first prosecution. And it is the Trump Justice Department that has diverted prot- prosecutors and FBI agents away from fraud investigations to focus on the president's mass deportation campaign and his effort to establish some sort of retribution for his political enemies. According to the Cato Inst Institute, a conservative operation, American citizens accounted for ninety five percent of federal welfare fraud losses from twenty thirteen to twenty twenty four. American citizens. So to suggest that the Somali community is disproportionately responsible for fraud is just not supported by the facts even from the Cato Institute. If we're serious about fighting fraud, let's talk about a president who has more than doubled his net worth since his return to office. Blind trust as an a possibility have been replaced by eyes wide open money grab. Let's talk about senior administration officials. who have misused government resources and taxpayers' dollars for personal purposes in travel. Let's talk about fraudsters who have made huge contributions to the president and been rewarded with pardons. Business executives who have committed Medicare fraud, securities fraud, wire fraud, crypto fraud, tax fraud. If we're worried about people breaking the law in Minnesota, our focus should be on the Trump administration's Department of Homeland Security. Last week The chief federal district judge in Minnesota, a Republican appointee, noted that ICE violated ninety-six court orders in Minnesota in January alone, likely more than some federal agents have violated in their entire existence. But Minnesota is not the only place suffering from this cruelty of this administration. For months the administration has targeted my home state of Illinois as part of reckless attacks they claim are law enforcement operations. In reality, they are not enforcing the law. They are breaking it with their racial profiling, detentions, threats and use of excessive force. Last month the administration expanded its attacks by trying to freeze billions of dollars in essential funding for children and families in five democratic-led states. Illinois was targeted along with Minnesota, New York, California and Colorado. Political retribution at the expense of children. The administration provided no support for their allegations that these states were improperly awarding benefits. But the explanation is obvious. This is another act of political retribution by the Trump administration. This hearing is an affront to the people of Minnesota and the memories of those who lost their lives at the hands of immigration officers. The real fraud we should be focused uh focused on is the one perpetrated by this president and his acolytes, IU.

Thank you. I will now uh introduce the witnesses. The first witness we have is the Honorable Kristen Robbins, a native of Crookston, Minnesota. Kristen Robbins currently sh- serves as the chair of the Fraud Prevention Committee in the Minnesota House of Representatives, where she works to uncover the large scale fraud in Minnesota and to hold state agencies and fraudsters accountable. Representative Robbins is also co-chair of the bipartisan bicameral Civility Caucus. which aims to build relationships and trust across parties and between the House and Senate. Prior to joining the House in twenty eighteen, Representative Robbins co-founded and served as the executive director of the Economic Club of Minnesota, a nonprofit focused on strengthening Minnesota's economic competitiveness and previously served on the State Commission to end chronic homelessness. She received her bachelor's degree in economics and political science from Bethel University, and her master's degree in economics from Washington University. Our second witness is Robert Weissman, who is the pres- co-president of Public Citizen, the consumer advocacy and pro-democracy organization. Weissman focuses on government and corporate accountability, among other issues. He is the author of The Corporate Sabotage of America's Future and the co-author of two other books. Previously, he worked as director of the corporate accountability organization, Essential Action, and as editor of the Multinational Monitor, a magazine that tracks uh multinational corporation. Weissman is a graduate of Harvard College and the Harvard Law School, uh a a fact uh for which I hope we can forgive him.

Mm.

Uh our final witness is David Hoek. Uh David Hoek is most well known for his role as the Minneapolis whistleblower in YouTuber Nick Shirley's video uncovering massive fraud within Minnesota. Mr. Hoek was born and raised in Minnesota, where he attended the University of Minnesota and ran for Attorney General in twenty ten. As an investigator, he has devoted considerable time and resources over the last several decades to scrutinizing Minnesota's elected official and exposing corruption. He is, he co-founded Minnesotans for Responsible Government, where he serves as a lobbyist. And we'll start now. Representative Robbins, you're recognized.

Thank you, Mister Chair. Thank you for inviting me to testify as chair of the Fraud Prevention and Oversight Committee in the house. I have been working tirelessly over the past year to expose the massive fraud that Tim Walz and his administration has enabled. We've also proposed solutions and worked to hold state agencies and criminals accountable. We have a long way to go, but we are getting results. With my brief remarks, I want to highlight three things. how this started, where the money is going, and provide a road map for how states can prevent fraud and we can partner better with the federal government. First, how it started. The original fraud scandal was tied to the Child Care Assistance Program, or CCAP, which is a federal program for low income families with children. There have been allegations of fraud in this program since twenty eleven. By twenty fourteen and fifteen there were raids, charges and convictions of child care providers for billing non-existent or absent children. with fraud exceeding a million dollars in some cases. In March and April of twenty nineteen, just a few months into the Wall's administration, the legislative office uh auditor published two reports about the sea cap fraud. They outlined the fraudulent providers and the alleged movement of millions of dollars in cash out of our state, to Somalia, with allegations that the money was going to fund terrorism. Unfortunately, according to multiple whistleblowers, soon after these reports were released, the Criminal Investigation Unit for child care fraud, which had been leading the charge on these prosecutions, was shut down by the Department of Human Services. Rather than conducting criminal investigations of fraud, the Walz administration essentially renamed fraud as " overpayment" and then referred any overpayment cases to a new internal overpayment committee, which would decide if they should pursue reimbursement. The DHS staff in this unit were no longer allowed to talk to their counterparts in the criminal apprehension without prior supervisor approval. Failure to address child care fraud and the decision to stop criminal investigations led directly to the largest COVID fraud scandal in the nation. In March of twenty twenty, Representative Ilhan Omar authored a bill called the Meals Act, which eventually was incorporated into a larger COVID package. This law enabled stated states to waive the normal eligibility requirements for t- participating in the national school lunch program. eliminating income requirements, site inspections, and expanded distribution methods. Minnesota took full advantage of these waivers and enabled site sponsors, like Feeding Our Future, Partners in Quality Care, and Gar-Gar Family Services to bill for hundreds of millions of fake meals for fake children. Just one of these groups, Feeding Our Future, became the largest COVID fraud in state and national history, bilking taxpayers of at least two hundred and fifty million dollars. To date, there have been seventy-eight indictments and sixty-one in the Feeding Our Future scandal, with more cases to go on trial this spring. The Feeding Our Future prosecutions prosecutions then revealed that as many as half of those defendants were also getting state money in other Medicaid funded programs. Yet despite reports on this, back in twenty twenty-three, more than three years ago, Tim Walz and his agencies didn't stop those defendants from getting additional state money in other Medicaid programs. We now have found fraud in Medicaid programs including autism centers, sober homes, non-emergency medical transportation, integrated community supports, and housing stabilization services. In December, our committee held a hearing on credible allegations of fraud in two new areas, adult day services and assisted living facilities. We now have seen allegations of fraud in fourteen Medicaid programs. The former first US attorney who led these prosecutions for years stated that the estimated fraud is nine billion dollars. And this doesn't count fraud in SNAP or child care programs. So where's the monis- m- money going? Minnesotans pay their taxes and they expect their money to go to things that help their communities. Roads, schools, health care, and not to be taken by criminals. To buy resorts in Kenya, apartments in Nairobi, property in Turkey, or luxury homes and cars in the US. Worse yet, Minnesota taxpayers have allegedly found their ways into the hands of terrorist organizations like Al Shabaab, both directly and directly. The money is walking out the door at the Minnesota, Minneapolis, St. Paul airport. Back in twenty seventeen, the estimate was about a hundred million dollars in cash was going out annually from our airport. According to TSA, in twenty twenty four, there were three hundred and forty million dollars in cash outbound. And in twenty twenty five, it was three hundred and fifty million. This is astonishing, not only because of the amount, but because of the, it is so out of proportion to other airports. The cash out of Minneapolis is ninety-nine percent higher than cash going out of Dallas, Atlanta, and JFK in New York. It's ninety percent higher than what's going out of Seattle. Minnesotans are incredibly frustrated that their hard-earning h- hard-earned money is being siphoned off by criminals while their taxes keep going up and vulnerable citizens don't get the services they need. Other states should learn from our failures. There are some basic common sense principles to stop the fraud. First, culture matters. Fraud flourishes when leaders ignore it and criminals see they can get away with it. Tim Walz has not held anyone responsible. Second, fraud flourishes when basic internal controls are not followed. This is not complicated. Third, truth matters. We cannot be cowed by charges of racism or Islamophobia, which have been successfully weaponized to limit scrutiny and fraud in Minnesota for years. This is not ancient history. It is still happening. When I testified before the House Oversight Committee on January seventh, I was stunned to be called a racist six times in that hearing. This is the same playbook that has been used to protect Minnesota criminals for years. Any time a whistleblower or legislator raised questions about Somali fraud in daycares, nutrition centers, autism centers, they were called a racist or said that charges of racism would ruin their careers. So where do we go from here? State and federal partners work together. We need your help to have more audits of these programs and to enforce current laws that require states to pay back in one year if they have been found fraud or overpayment. We also need the federal government to require documentation, not just attestation, for eligibility in these programs. We also need more resources at the US Attorney's Office than CMS to help with investigations. And finally, the federal government should have greater power of oversight and investigation of cash going out of our country. I'm thankful for the brave whistleblowers, journalists, and the federal and state partners in this committee for helping us um identify fraud. We cannot allow this to continue. The time for accountability and justice is now.

Miss Weissman.

Thank you, Senator Graham and members of the committee. Fraud and scams are indeed a scourge in America, across this country, not limited to Minnesota. Taxpayers are cheated when fraud is done against government programs. Beneficiaries are harmed as well. Fraud and the private sector steals billions from consumers and in extreme cases, drains families of life savings and sends them in to a cycle of misery. Unfortunately, the reality is the Trump administration is systematically dismantling the anti-fraud programs of the federal government. Those programs aim to deter fraud, punish wrongdoers, and bring restitution to victims. The administration is undermining all of that. It is fair, it is fair to say, in fact, that through its actions, the administration is fostering more fraud, facilitating more scams, empowering corporate and small-time fraudsters alike and depriving victims of the justice to which they are entitled. As regards Minnesota, there plainly is some fraud that has gone on, as there is throughout this country. Where there is fraud, it should be investigated and prosecuted. No one wants tougher enforcement more than legitimate providers and the beneficiaries of the programs that are being defrauded. That said, it is unhelpful to make claims about fraud in Minnesota or anywhere else, based on exaggerated numbers or shaky evidence. And in the case of Minnesota, it's worth pointing out that the efforts by the U. S. Attorney are being undermined by this administration driving out the people who are engaged in the prosecution of the fraud in Minnesota, and by diverting the FBI from its work on fraud to immigration enforcement. Moreover, there is no justification for suspending social service programs, vital service social service programs, as we all agree, as punishment for fraud. That punishes innocent people and leaves the fraudsters alone. Nor obviously is there any rationale for pursuing suspension of programs on a partisan basis. Now the subtitle of this hearing is Dealing with Fraud in Minnesota and Beyond. I wanted to pull back and talk for a few moments about the beyond. To be clear, the actions of this administration are undermining governmental, anti-fraud, and accountability agencies. When it comes to corporate fraud or scams perpetrated by those close to the administration, The policy is to ignore, forgive, or coddle the wrongdoers if they're actually caught. Moreover, the president and his top aides are shattering norms of conflict of interest, and basic ethical standards, creating a culture of impunity that for sure is encouraging more fraud against the government and around the country. This is not an administration that is determined to root out fraud. In short, for the super-rich and for the super-connected, This is an administration that is taking the anti-fraud cops off the beat. And for those who manage to get caught anyway, they give them, and they were doling out, get out of jail free cards. Let me explain the evidence behind this. When it comes to the Department of Justice, this administration has gutted or disbanded the public integrity section, the consumer protection portion branch of the agency. It has fired the agency's top ethics advisor. It has issued guidance to soften corporate crime enforcement. The president has pursued his pardon power in strange service of fraudsters, leaving aside the January sixth pardon, more than one third of all of the president's pardons have gone to those who perpetrated fraud or similar kinds of crimes. Those pardons have led to the cancellation of one point five billion dollars in fines and restitution owed including more than a billion dollars owed to victims of fraud and wrongdoing. The pardons themselves have re-victimized the victims. The president has eviscerated the system of inspectors general that the uh that the chairman was referencing earlier and what and and for whom has done so much to advance that IG system. Not only did he fire seventeen IGs at the start of his administration, he is responsible for firing two thirds of presidentially appointed inspectors general. Three quarters of the inspector general top offices were empty. As of October, we've looked at the staffing inside the IG's offices, drastic cuts across the board. The president had shuttered the Consumer Financial Protection Bureau illegally in our estimation, the closing down the most important anti-fraud agency in their federal government. He has slashed staffing at the Internal Revenue Service by more than a quarter, guaranteeing an increase in tax fraud, avoidance, and cheating primarily by the super-rich and costing taxpayers approximately two hundred billion dollars over the next ten years according to Yale University analysts. He has canceled enforcement against large corporations, more than a hundred and fifty separate times that we've been able to document in the first year of the administration. He is engaged in rampant conflicts of interest, including most startlingly a joint venture with the UAE affiliated company as reported by the Wall Street Journal this past weekend, compromising our foreign policy, destroying basic ethics standards, and inviting more fraud and wrongdoing by others around the country. He has destroyed the East Wing of the White House and then solicited funds from corporations and the super-rich to pay for his ballroom. Our effort, our investigations found that two thirds of those corporations contributing had government contracts, more than two hundred billion dollars in contracts over the previous three years. This committee is absolutely right to focus on fraud. Senator Cruz is absolutely right to bring his righteous anger against fraud. But that fraud is not limited to Minnesota. That is small potatoes compared to what this administration is perpetrating. This, I encourage this committee to focus on that fraud, to pursue the reversal of the policies that I've identified and serve the American people who absolutely, on a unified basis, want to counter fraud and wrongdoing in the government and in the private sector.

Miss Troek.

Thank you, sir. Good day. Uh, my name is David Hoek. I was born in Minneapolis. I'm a lifelong resident of Twin Cities area. And, although it's not in my testimony, I take exception to Mister Weissman's questioning of my data as being inaccurate. I'll get back to that. My journey into uncovering fraud in Minnesota, and ultimately throughout the entire United States as it turns out, began when I started to notice very unusual changes in the Minneapolis area. Remember, I grew up there, so I know Minneapolis very well. Most notably, the enormous number of child care facilities that had opened up. I would drive around the Twin Cities and it seemed these child care facilities were literally on every block. Some blocks had two or three child care facilities on the same block. Minnesota sees a fair amount of snow in the winter, and I began to notice, driving by these child care facilities, there were never any footprints in the snow outside these child care facilities. And I'd go by them three, four, five times a day, Monday through Friday, cuz my office is in the heart of where a lot of these child care facilities are. So I said, well, w- w- what's going on here with all these child care facilities? So I began to check the Minnesota Secretary of State's website to find out just who owned all Every single one of them was Somali owned. Not every child care facility in Minnesota was, but the ones that I was looking at that were by my office, and there were a lot of them. What's even stranger is that every one of these facilities is located in a commercial or industrial building. No play areas, bad neighborhoods, and several of the child care facilities had signage which stated they were open either seven AM to ten PM two PM to ten PM, quality learning centers, for example. or open twenty-four hours. Who the heck brings their kid to stay overnight at a child care facility in a rough neighborhood? None of it made any sense. The leering misspelling was the final straw for me. That's the spark that ignited my full-on investigation. So Minnesota has two different child care licenses available. One covers six AM to six PM, and the other one covers six PM to six AM. They're two very different licenses. So for a child care facility to be open twenty-four hours a day, or even from two p m to ten p m, they need both licenses. How many of these facilities that are open these extended hours have two licenses? None of them. Zero. They all have only one license. Minnesota child care supervision requirements include the following. For infant care that's zero to seventeen months of age, you have to have one adult supervising for every four children. And max eight in a group. For toddlers, which is eighteen and twenty-three months of age, it requires one adult for every five children to supervise. Max ten children in that group. For two year olds, you need one adult for every seven children. So, max of fourteen in a group. So, if a child care facility was building the state of Minnesota for ninety-nine children, IE, Quality Learning Center, that child care facility would need to have at least eight employees supervising those children. These cannot be ten ninety-nine employees. They have to be W two employees. That means we're gonna have at least eight W twos, and we're gonna have at least eight I nines. So, if the feds went in and checked that, what do you think they're gonna find? You already know the answer. One issue that is often brought up is that we are unfairly targeting the Somali community. This is a fair point to be made. As one Somali gentleman exclaimed in our second video, we're not the only community that does fraud. Fraud certainly exists in every community. It was the sheer volume and the blatant nature of the Somali fraud that demanded my attention. When one facility, Mako Child Care, has another child care, mini child care registered at the same address, but the sign still says Mako Child Care, it kind of stands out. And again, no children, no footprints in the snow, ever. This is what I mean by being blatant. Misspelled signage, posted hours that require two licenses, no child footprints in the snow, not even once. So how did we arrive at this point? Why are we having this hearing? We got here because of politicians, almost exclusively Democrats. A couple of names come to mind. Jody Harbstead, the former Commissioner of the Department of Human Services. And Shireen Gandhi, the current Commissioner of the Minnesota Department of Human Services. Harbstead put the whole fraud on steroids. She was steering the ship from twenty nineteen to twenty twenty five, during the COVID-nineteen pandemic. This is when the whole fraud network exploded into what we see nationally today and to what we see in my numbers which are accurate. So, now we hear that Minnesota Department of Human Service is forging documents and back dating paperwork all in an effort to cover up their complicity in this fraud this is just more criminal behavior from the gang Minnesota Department of Human Services, it's criminal behavior. Minneapolis was the incubator for this nationwide fraud, which we're now seeing in Maine, we're seeing it in Washington State, we're seeing it in Columbus, Ohio. It was constructed here in Minneapolis. And the idea behind it was if you can get a population in here and fit them into this fraud framework, you have a guaranteed voting block for all eternity. The fraud was started and then it expanded out, and now you see it all around the country. So why is fraud bad? Why is it a bad thing? Why does anybody care? Fraud is bad because it steals from the blind, it steals from kids with cancer, it steals from disabled, it steals from the homeless, it steals from wounded veterans, it steals from everybody in this room. So, what is the answer? How do we fix this? The way we fix this is that the federal government has to go to the Minnesota Department of Human Services and every social service agency and say, look, If you issue a payment using federal money and it goes to a fraudulent company, you run the risk of us coming in, arresting you, handcuffing you, parading you out, bringing you in front of a judge, and putting you in prison. So if you're gonna issue a payment, you better make sure that it's a legitimate company. Otherwise, don't issue the payment. Go on Google Earth. Look at, it's a liquor store. It's a grocery store. Why are you issuing payment to a child care or a transportation company That doesn't even exist. Why are you issuing a payment? It's criminal behavior. The federal government has to has to use that cudgel over these people and say, look, you better be sure if you issue that payment that it's legitimate payment, or you could end up in prison. Thank you.