FBI probes Minnesota fraud after evidence suggests arrest just ‘tip of a very large iceberg’

The FBI said Sunday that the agency is probing for additional fraud schemes in Minnesota after a series of criminal convictions, charges and media reports unveiled widespread abuse of federal and state welfare programs.

FBI Director Kash Patel said investigative teams are targeting fraudsters who are exploiting federal aid programs meant for those in need.

He referenced the FBI’s role in arresting those involved with the Feeding Our Future fraud ring — a nonprofit that bilked at least $250 million from the federal government by claiming to serve meals to underprivileged children.

The nonprofit took advantage of relaxed vetting standards during the pandemic by providing a fake list of the number of meals it distributed and phony attendance rosters of thousands of children who supposedly received the food.

Prosecutors said the fraudsters would use the millions of ill-gotten federal dollars to buy properties overseas and splurge on personal luxuries.  

“The FBI believes this is just the tip of a very large iceberg,” Mr. Patel wrote on X. “We will continue to follow the money and protect children, and this investigation very much remains ongoing.”

The FBI’s investigation netted 78 indictments and 57 convictions in connection to the scheme, which was largely perpetrated by members of Minnesota’s Somali community.

Mr. Patel’s social media post appears to be in response to a viral expose by conservative YouTube personality Nick Shirley in which he approaches several Somali-run day-care centers in the Minneapolis area that were seemingly empty.

Mr. Shirley’s video report showed him approaching multiple day-care centers to see whether he could enroll his fictitious child at the facility. He either received no response when he knocked on the door or was denied entry by the employees, some of whom told him off or shut the door in his face.

Mr. Shirley said some of the facilities were receiving millions of dollars in state funds to run day-care centers that were supposed to be supervising dozens of children.    

Federal prosecutors further linked Minnesota-based Somalians to separate cons of the state’s social safety net meant to help autistic children and provide housing assistance.

The U.S. Attorney’s Office for Minnesota in September accused Asha Farhan Hassan of defrauding the state of at least $14 million by having Somali parents register their children for the program after getting a fake autism diagnosis.

Ms. Hassan paid the parents in kickbacks ranging from $300 to $1,500 per month per “autistic” child, according to prosecutors.

That same month, federal prosecutors charged several people with defrauding Minnesota’s Housing Stabilization Service program.

The program, which is intended to help find and maintain housing for disabled people and drug addicts, instead helped the defendants buy BMWs and make real estate investments in Kenya, court records said.

The U.S. Attorney’s Office said at least six people accused of perpetrating the housing fraud are of Somali descent.    

A November report by City Journal said many of the Somalis connected to the fraud rings sent money back to Somalia in the form of remittances.