[ST. PAUL, MN] – Governor Tim Walz today applauded the fraud charges brought against individuals accused of defrauding public programs and highlighted Minnesota’s comprehensive, multi-year efforts to combat fraud and protect taxpayer dollars. The Governor emphasized that today’s developments validate Minnesota’s earlier decision to audit and pause payments for 14 high-risk Medicaid programs tied to the federal investigation and shut down Housing Stabilization Services (HSS) entirely, demonstrating why the state moved early to strengthen oversight, stop improper payments, and support criminal prosecutions.

“This is exactly the type of strong action we need from prosecutors to ensure fraudsters are put behind bars,” Governor Walz said. “This infuriating greed and criminal activity is why we took action earlier this year to shut down Housing Stabilization Services and hired an outside firm to audit these programs and stop payments to fraudulent providers. We will not tolerate fraud, and we will continue to work with federal partners to ensure fraud is stopped and fraudsters are caught.”

Over the last several years, Governor Walz and state leaders have taken sustained action to strengthen program integrity across state government. These efforts include executive action, bipartisan legislation, enhanced enforcement tools, and partnerships with outside experts to stay ahead of increasingly sophisticated fraud schemes.

In October, Governor Walz ordered a third-party audit of billing for 14 high-risk Medicaid services and paused payments while suspicious claims were reviewed. Using funding approved during the 2025 legislative session, the Minnesota Department of Human Services contracted with Optum to analyze fee-for-service claims data, flag irregularities, and prevent improper payments before funds are distributed. That work remains ongoing, and Minnesota continues to support federal law enforcement as investigations proceed.

Through executive action, bipartisan legislation, and agency-level reforms, Minnesota has also:

• Ordered audit and pause of payments for 14 high-risk Medicaid programs tied to the federal investigation and shut down HSS entirely
• Created a centralized fraud investigations unit within the Minnesota Bureau of Criminal Apprehension
• Established a statewide Inspector General Coordinating Council to improve cross-agency collaboration
• Funded additional auditors, internal control specialists, and grant oversight professionals
• Expanded whistleblower protections and anti-kickback penalties
• Required enhanced licensing, documentation, training, and unannounced site visits for high-risk providers
• Implemented new tools for data analytics, prepayment review, and fraud reporting

Last Friday, Governor Walz announced the appointment of Tim O’Malley as Director of Program Integrity and a partnership with WayPoint to implement a statewide fraud prevention program. This initiative will establish consistent investigative standards across agencies, improve data sharing, and enhance auditing and enforcement capacity statewide.

“We are thankful for the charges brought today. The public should expect these investigations to continue until we root out all criminals who seek to defraud Minnesotans of their hard-earned tax dollars,” Bureau of Criminal Apprehension Superintendent Drew Evans said. “Our financial crimes and fraud agents and analysts are highly experienced, highly trained and will continue to work alongside and in coordination with other local, state and federal investigative and prosecution entities to get the job done.”

Governor Walz emphasized that Minnesota will continue to pursue fraud aggressively at every level of government.