Gregg Jarrett Says Law Allows Feds To Cut Off Funding To Minnesota Due To Fraud

Fox News legal analyst Gregg Jarrett said Tuesday that federal law gives the U.S. government clear authority to withhold Medicaid funding from Minnesota if state officials fail to crack down on widespread fraud.

In January, President Donald Trump announced the formation of a new Department of Justice Division for National Fraud Enforcement after independent journalist Nick Shirley released videos alleging fraud within Minnesota’s Somali community. Jarrett argued on Fox Business’ “The Evening Edit” that the federal government can lawfully defer or deny Medicaid funds to states that refuse to enforce anti-fraud measures.

“[Democratic Minnesota Attorney General Keith] Ellison … doesn’t know much about the law because the U.S. government absolutely has the legal authority to withhold or defer Medicaid to states that fail to stop fraud. It’s quite simple,” Jarrett told host Elizabeth MacDonald. “It’s spelled out in the code of federal regulations authorized by Congress and Minnesota’s fraud central. As you point out, Liz, estimated $9 billion, probably a lot more, in fraud. Fourteen different Medicaid programs ripped off, half of all claims bogus or stolen, housing services, autism program, personal care assistance, you name it.” (RELATED: Somali ‘Autism’ Center Chief Pleads Guilty To $6 Million Fraud Scheme)

Jarrett said that both Minnesota Attorney General Keith Ellison and Democratic Minnesota Gov. Tim Walz did little to address the alleged abuse.

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“And there’s compelling evidence that Ellison and [Democratic Minnesota Gov.] Tim Walz, both, did a little or nothing to stop it. And when that happens, when a state refuses to enforce the law, they lose any right to federal funds,” Jarrett added.

Ellison faces allegations of nonfeasance or complicity in the Feeding Our Future fraud scheme. A December 2021 recording allegedly shows him addressing complaints of racism and unfair treatment from individuals who later became campaign donors and defendants in the Feeding Our Future fraud case.

MacDonald pressed the issue further, pointing to alleged failures in childcare oversight. Jarrett responded that federal officials are not permanently denying matching funds but instead conditioning them on corrective action.

“It’s shocking, the explosion in fraud and welfare services. Just the childcare services fraud, Gregg. Minnesota Democrats didn’t even verify attendance records at these childcare centers or pursue fraud tips,” MacDonald said. “Instead, they sat on and stepped on and squashed whistleblowers, raising the red flag about this. Tim Walz is accused of that.”

“Yeah. I mean, it’s pretty appalling, isn’t it? And the evidence is overwhelming. And look, HHS [the Department of Health and Human Services] is not denying Minnesota matching funds. They’re making a contingent on state leaders doing their jobs, instituting a plan to correct the rampant fraud,” Jarrett responded. “That’s not unreasonable, Liz. Because remember, it’s the states that administer Medicaid on a day-to-day basis. That’s their responsibility.”

In recent months, the Trump administration has intensified its pursuit of large-scale health care fraud, with a particular focus on Minnesota. On Feb. 25, Vice President JD Vance joined Mehmet Oz, who leads the Centers for Medicare & Medicaid Services, to unveil additional enforcement measures, including postponing $259.5 million in the state’s quarterly Medicaid payments and imposing a nationwide freeze on new Medicare enrollments for certain providers.

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