From Minneapolis to Mogadishu: The Fraud Pipeline Nobody Stopped

The following quote is the opening salvo from an article titled “The Largest Funder of Al-Shabaab Is the Minnesota Taxpayer,” by Ryan Thorpe and Christopher Rufo, both with the Manhattan Institute:

Minnesota is drowning in fraud. Billions in taxpayer dollars have been stolen during the administration of Governor Tim Walz alone. Democratic state officials, overseeing one of the most generous welfare regimes in the country, are asleep at the switch. And the media, duty-bound by progressive pieties, refuse to connect the dots. [snip]

In many cases, the fraud has allegedly been perpetrated by members of Minnesota’s sizeable Somali community. Federal counterterrorism sources confirm that millions of dollars in stolen funds have been sent back to Somalia, where they ultimately landed in the hands of the terror group Al-Shabaab. As one confidential source put it: “The largest funder of Al-Shabaab is the Minnesota taxpayer.” [snip]

Our investigation shows what happens when a tribal mindset meets a bleeding-heart bureaucracy, when imported clan loyalties collide with a political class too timid to offend, and when accusations of racism are cynically deployed to shield criminal behavior. The predictable result is graft, with taxpayers left to foot the bill.

The six-page article chronicles a wide-ranging series of schemes to drain money from the intended recipients of state and federal programs.  Fortunately, U.S. attorney Joseph Thompson has been filing indictments against several perpetrators of large-scale fraud.

For example, under Minnesota’s Early Intensive Developmental and Behavioral Intervention program, autism claims against Medicaid accelerated every year, from $3 million in 2018 to $399 million in 2023!  The number of autism centers blossomed from 41 to 328 over that same period, “with many in the Somali community establishing their own autism treatment centers,” citing the need for “culturally appropriate programming.”  The scammers approached parents and recruited children into autism therapy services and generated fraudulent diagnoses of autism.  The conspirators drove up enrollment by paying kickbacks to parents which “ranged from approximately $300 to $500 per month, per child,” depending on how much the child was authorized to receive from the DHS.  “Often, parents threatened to leave … and take their children to other autism centers if they did not get paid higher kickbacks.”

Minnesota pioneered the establishment of a Medicaid Housing Stabilization Services program, which aimed to “help seniors, addicts, the disabled, and the mentally ill secure housing.”  Its projected annual budget was $2.6 million when the program began in 2020.  Since then, costs have shot up to over $100 million/year.  This HHS program was terminated in August 2025 after the state paid out $61 million during the first half of this year.

In September 2025, Joe Thompson filed criminal indictments for defrauding this HHS program against several persons from the Somali community, saying that not only did most of the cases involve overbilling Medicaid and Medicare, but they often originate from “purely fictitious companies solely created to defraud the system … operated out of dilapidated storefronts or rundown office buildings.”  Many of those committing these frauds had “other companies through which they billed other Medicaid programs, such as the EIDBI autism program, the Adult Rehabilitative Mental Health Services program, the … Integrated Community Support program, the Community Access for Disability Inclusion … program, PCA services, and other Medicaid-waivered services.”

On the same day, September 18, 2025, 56 defendants pleaded guilty to a $250-million fraud scheme revolving around “Feeding Our Future” — a nonprofit established in 2016 that sponsored “daycares and after school programs to enroll in the Federal Child Nutrition Program.”  Most of the organizations sponsored by this program were owned and operated by members of the Somali community:

In 2019, Feeding Our Future received $3.4 million in federal funding disbursed by the state. In the months after the Covid-19 pandemic began, however, the nonprofit rapidly increased its number of sponsored sites. Using fake meal counts, doctored attendance records, and fabricated invoices, the perpetrators of the fraud ring claimed to be serving thousands of meals a day, seven days a week, to underprivileged children. In 2021, Feeding Our Future received nearly $200 million in funding. [snip]

In reality, the money was being used to fund lavish lifestyles, purchase luxury vehicles, and buy real estate in the United States, Turkey, and Kenya. In 2020, Minnesota officials raised concerns about the nonprofit’s rapid expansion. In response, the group filed a lawsuit alleging racial discrimination related to outstanding site applications, noting that Feeding Our Future “caters to … foreign nationals.”

The scope of this Somali fraud is mind-boggling — reportedly billions of taxpayer dollars have been funneled out of state coffers:

The Somali fraud rings have sent huge sums in remittances, or money transfers, from Minnesota to Somalia. According to reports, an estimated 40 percent of households in Somalia get remittances from abroad. In 2023 alone, the Somali diaspora sent back $1.7 billion — more than the Somali government’s budget for that year.

Ryan Thorpe and Christopher Rufo claim that their investigation has revealed, for the first time, that some of that money went to the al-Qaeda-linked Islamic terror group Al-Shabaab.  “According to multiple law-enforcement sources, Minnesota’s Somali community has sent untold millions through a network of ‘hawalas,’ informal clan-based money-traders, that have wound up in the coffers of Al-Shabaab.”

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