The Department of Justice announced a significant crackdown on Thursday, revealing the arrest and indictment of 15 individuals in Minnesota linked to fraud schemes that siphoned $90 million from Medicaid funds.
Dr. Mehmet Oz, who oversees Medicaid and Medicare, highlighted at a press conference that the state’s administration, led by Democratic 2024 vice-presidential hopeful Tim Walz, had not adequately addressed the preventative measures against such illicit activities. This announcement marks the latest development in the ongoing dispute between the current administration and Governor Walz regarding Medicaid fraud this year. Medicaid is a crucial state-federal health insurance initiative providing coverage for low-income and disabled individuals.
Minnesota has also been a focal point of Democratic opposition to former President Donald Trump’s widespread deportation initiatives. Earlier this year, federal agents were involved in incidents that resulted in the deaths of two protestors in the state. This prompted congressional Democrats to halt funding for the Department of Homeland Security beginning in February. After a record-setting shutdown, lawmakers eventually agreed to fund a substantial portion of the department three weeks later. Republican legislators are now preparing to pass a party-line bill to allocate funds to the department’s immigration division.
James Clark, inspector general for Minnesota’s Department of Human Services, confirmed his department has collaborated with “career federal and state partners for months to aid in building criminal cases” against most of the individuals indicted. In an emailed statement, Clark noted his department had ceased payments to some implicated businesses over a year ago and had initiated investigations and withheld payments from 11 of the 15 charged individuals.
Health Secretary Robert F. Kennedy, who appeared alongside Oz and Assistant Attorney General Colin McDonald at the press conference, described the arrests as “the largest autism fraud bust in American history.” McDonald elaborated that the accused diverted funds intended for housing homeless individuals, providing services for autistic children, and supporting disabled people in achieving independent living.
Among those indicted, two defendants were accused of offering kickbacks to parents who brought their children to autism centers. There, children were allegedly diagnosed with the neurological condition “regardless of medical necessity,” and subsequently billed for autism services that were never rendered, according to McDonald. Tragically, one patient, slated for round-the-clock care that was not provided, was later found deceased, McDonald added.
This situation is critical as Governor Walz, who served as Kamala Harris’ running mate in 2024, has become central to the administration’s battle against fraud. His state gained national attention in 2025 after a housing program was shut down due to pervasive fraud, leading Walz to decide against seeking re-election.
To date this year, Oz’s agency, the Centers for Medicare and Medicaid Services (CMS), has withheld over $300 million in Medicaid payments to Minnesota due to concerns about fraudulent medical claims. The state has initiated legal action against CMS over these deferrals, asserting they are unusually large and politically motivated. In January, CMS attempted to withhold $2 billion in future Medicaid payments from the state for insufficient efforts to combat fraud, utilizing a federal authority it had never invoked previously. However, CMS has since paused this action after approving Minnesota’s fraud combatting plan in March.
Looking ahead, Minnesota has committed to revalidating all health service providers at high risk of fraud, including those offering personal or home care, by May 31. Oz reported at the press conference that as of May 7, 40 percent of the 5,600 providers undergoing revalidation had not responded or provided inadequate responses. “We anticipate that by the close of this month, half of these providers might no longer be permitted to render services,” he stated.
CMS is also extending its scrutiny to Medicaid funding in other states. It recently announced a $1.3 billion deferral for California, alleging the state has not sufficiently addressed fraud among hospice providers, an accusation California labels as false and politically motivated. The agency has also mandated a nationwide requirement for all states to report on the activities of their Medicaid fraud control units and to develop plans for revalidating providers of services susceptible to fraud.
