The White House has blocked $250m in Medicaid funding to Minnesota, demanding the state take unspecified “corrective actions” to address what Vice President JD Vance described as an “epidemic of fraud” among the state’s Somali-American population. The decision was announced by Vance alongside Centers for Medicare and Medicaid Services (CMS) administrator Mehmet Oz.
Vance said the administration wanted the state to “show that before you give Medicaid funds to somebody, you're taking seriously whether they provided the services that they say that they're providing.” Oz added that an action plan submitted by Governor Tim Walz’s administration had been deemed “inadequate”.
The move follows right-wing media outrage over a viral video by anti-immigrant YouTuber Nick Shirley, who alleged that many immigrant-run medical and childcare businesses in Minnesota were illegitimate. This comes amid a wider fraud investigation into Minnesota non-profit Feeding Our Future, which is accused of submitting fraudulent documentation to secure roughly $250m in Covid-19 pandemic aid. Federal prosecutors have also suggested that at least half of $18bn in federal funds for 14 state-run programmes since 2018 may have been stolen.
The cases have become politically charged, with Somali Americans making up 82 of the 92 defendants charged so far, according to the US Attorney’s Office for Minnesota. President Donald Trump has used the issue to target the Somali diaspora, which is the largest in the US, and the state’s Democratic leadership. Local community leaders have urged against stigmatising Somali Americans, warning against conflating alleged crimes by a few individuals with the broader community of over 80,000 people.
Trump has made disparaging comments, calling Minnesota “a hub of fraudulent money laundering activity” and accusing Somali Americans of “pillaging ... an estimated $19 billion from the American taxpayer”. During his State of the Union address, he referred to “Somali pirates” ransacking the state, drawing criticism for linking the fraud cases to immigration and culture. The Government Accountability Office has estimated that the US government loses between $233bn and $521bn annually to fraud, but has noted that no reliable estimates previously existed.
