Federal Agencies Deploy Massive Crackdown on Alleged Medicaid Fraud in Minnesota and California

White House press secretary Karoline Leavitt said Wednesday that the Trump administration is taking an “all hands on deck” approach to pursuing alleged government fraud in Minnesota, California, and elsewhere.

Leavitt’s remarks came during a press briefing when a reporter asked if Minnesota Democrat Governor Tim Walz may have dropped out of a reelection race due to potential criminal investigation. Leavitt stated she was unaware of any such probe and noted she would not be able to comment on the matter even if one existed. However, she suggested that Walz’s political collapse is linked to a loss of support at home.

“I think Tim Walz probably dropped out of the race because he realizes he no longer has the support of the people of his own state,” Leavitt said. “This is a remarkable downfall considering he was the number two on the Democrat Party’s ticket just about a year ago.”

Leavitt emphasized that the larger focus is the scale of alleged fraud uncovered in Minnesota, a state now under intense federal scrutiny after multiple scandals involving Medicaid and other public programs designed to assist children and vulnerable citizens.

“When it comes to Minnesota, the fraud we have seen is really remarkable. It’s egregious,” Leavitt said, urging reporters to travel to Minnesota and cover the issue firsthand.

Leavitt outlined a sweeping multi-agency crackdown with near-daily federal presence on the ground. She noted that Homeland Security Secretary Kristi Noem visited Minnesota on Tuesday, and Treasury Secretary Scott Bessent is expected to travel there later this week for a meeting focused on fraud.

The Justice Department has charged 98 defendants in several Medicaid fraud cases, resulting in 64 convictions so far. Leavitt added that 85 of the 98 charged were of Somali descent. Federal investigators have issued more than 1,700 subpoenas, executed over 130 search warrants, and added more prosecutors to handle the growing volume of cases.

The Department of Homeland Security is “going door to door” and has deployed approximately 2,000 agents to Minneapolis to assist with law enforcement and immigration enforcement. The administration also tightened oversight across federal spending programs.

Leavitt stated that the Department of Health and Human Services now requires justification and photo evidence for all child care-related payments nationwide and has demanded Minnesota conduct a full audit of child care centers. Additionally, $185 million in child care funding to Minnesota was frozen.

CMS Administrator Dr. Mehmet Oz notified Governor Walz that the federal government will begin auditing Medicaid recipients and defer payments tied to suspected waste, fraud, and abuse. Other agencies are reviewing Minnesota’s unemployment program, Supplemental Nutrition Assistance Program (SNAP) recertification, public housing, and Small Business Administration lending, including suspending nearly 7,000 borrowers amid suspected fraud.

When asked about California, Leavitt said the president has directed agencies to investigate spending programs nationwide. “This is going to be an all-hands-on-deck, government-wide effort,” she stated. “Not just Minnesota, but also in the state of California, to identify fraud and to prosecute to the fullest extent of the law all those who have committed it.”