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I want to briefly talk about the massive Somali fraud network in Minnesota. UPDATE adding a more reputable source. Apparently Somalis have committed welfare fraud at least half a billion, maybe more, over the last couple decades. Much of it going home to Somalia to fund terrorist groups.
The surprising thing, looking into it, is that this seems to have been a bit of an open secret? Independent journalists were reporting on it for a while, and nobody seemed to care.
I think this story represents an overall change in the cultural climate, where this sort of information is finally becoming more popular to discuss. I'm reminded of the Rotherham scandal in the U.K. as well. Where there has been a major scandal involving mostly minority/immigrant groups that was covered up or just not really discussed, due to the Problematic nature.
I'm curious if this trend will continue moving forward, and we can perhaps have a more honest conversation about immigration and assimilation? We'll see...
I would note that the fraud at issue here isn't welfare fraud in the popular sense of people lying on application forms to get an extra $367/month from the government or whatever, but a more sophisticated form of white collar crime that is both more damaging in terms of total dollar amount and harder to detect. A lot of public services aren't provided by the government itself but are in essence contracted out to private companies and nonprofits, who are reimbursed for their services at fixed rates. The fraud comes in when these providers submit reimbursement claims for fictitious services.
At one extreme, this scam doesn't involve the provision of services at all. One can simply rent an office, buy a bunch of personal information for the demographic you're targeting, and start submitting reimbursements for services you never provided for clients who may be entirely fictitious. This is cheap and easy to do, but is necessarily limited, as one can only keep it up for so long before someone starts asking questions, at which point the entire operation falls apart because you can't credibly claim the charges were legitimate. At the other end of the spectrum, the fraud can exist as part of a legitimate organization that actually is providing most of the services it claims it's providing. The upside to this is that if anyone investigates your operation looks perfectly normal, with offices full of clients and invoices for relevant expenses. The downside is that you actually need to go through the process of providing services, which involves incurring expenditures that you may not be compensated for, including employees who may be inclined to blow the whistle when they start wondering why they're seeing reimbursement bills for services they know weren't provided. One upside, though, is that in the event that an investigator does find something untoward, it can be explained away as an administrative error or the consequence of a legitimate dispute.
Which end of the spectrum the fraud falls on usually depends on whether the fraudster intended on the whole thing being a sham from the beginning or if he realized he could pad his income by committing a little fraud on the side. The frauds in question here lean more towards the former, though they weren't quite as blatant as the first example I gave. They created enough of a front that the fraud wouldn't be obvious through a casual inquiry, but would be easily uncovered by a dedicated investigation. I would note that one thing that's misleading in both the Post article and the post itself is that these weren't "open secrets" that were only covered by independent journalists but actual scandals. The biggest fraud, the Feeding Our Future fraud, broke in 2022 and was covered in local media, including both major newspapers in the Minneapolis-St. Paul area, local television news, and the local NPR affiliate. And even that scandal, in which Feeding Our Future bilked $250 million from taxpayers, wasn't exactly due to incompetence on the part of the government.
Feeding Our Future was founded in 2016 but was denied government grant money due to concerns over the group's administrative practices. In 2020, with a ton of COVID money available, they decided to sue the Minnesota Department of Education over these denials. The nonprofit was allegedly applying for grant money that would be used to feed hungry children (MDE was administering the grants as part of the school lunch program). In the face of the suit, MDE approved the grants in November, but slow-walked the disbursements and demanded additional documentation. The matter went before a judge in April 2021, who effectively ruled that MDE's suspicious were not enough on their own to justify a denial of payment or the imposition of conditions that wouldn't apply to other organizations. The matter was complicated by the fact that MDE had by this time referred the matter to the USDA for a Federal investigation. The judge didn't order them to make payments exactly, but ruled that the withholding of payments had been in proper and that Feed Our Future was owed $20 million in back payments. MDE felt they had no choice but to resume payments. The whole thing came to a crashing halt in January 2022, when the FBI raided Feed Our Future's offices and MDE stopped making payments. To date, over 70 people have been convicted in the fraud.
In the aftermath of the FBI raid and the revelation that $250 million had been stolen, there was a lot of finger pointing over who was responsible (aside from the scammers, of course). Republicans blamed the Democratic state government for being incompetent, Democrats claimed their hand was forced by the judge, Tim Walz called for the judge to resign, the judge claimed he never technically ordered MDE to make payments and they were made voluntarily because they didn't appeal, MDE claimed that realistically they had no choice and the matter was out of their hands due to the Federal investigation, etc. In the end, though, it's hard to blame anyone in particular for what happened, and the idea that Democrats were covering up massive fraud to protect Somali immigrants doesn't really stand up to scrutiny. MDE smelled a rat from the beginning and tried to withhold payments, but were prevented from doing so by a judge. The judge may have not had a choice in the matter, since it's unclear what evidence MDE had at the time, and what they were able to actually argue in court in light of the ongoing Federal investigation. The Feds, for their part, had to contend with the fact that frauds like this are hard to prove, and even in a relatively straightforward fraud such as this it still took them a year to gather enough evidence to be confident in obtaining convictions.
I don't know much about the other scams, but what's concerning about them isn't so much that they say anything about the character of the Somali people as it does how much more money could have been stolen if they had been either a little more sophisticated or a little less brazen; the only thing really that surprising about these is that they were able to steal so much money while being under an investigative microscope. When scams at the other end of the spectrum happen, where the scammers are using fraud to pad the income of legitimate businesses, the totals can be truly staggering. Historically, the most prevalent frauds of this category have been for Medicare and Medicaid reimbursement. While there are some cases of these frauds existing with sham patients, it's unusually easy for a legitimate healthcare provider to slip in bills for reimbursement for services that weren't provided. This is especially true in the case of older patients, who go to the doctor so much they can't remember every test they have, or hospitals, that charge for so many things it's unlikely an individual patient can say whether something is legitimate or not. Hospital Corporation of America operates numerous real hospitals and paid nearly 2 billion in settlements stemming from such fraud that occurred in the 1990s, though the total amount of fraud remains unknown. This wasn't incidental fraud, either; there was an entirely separate set of books documenting the real profits the company was making (and not paying taxes on) as opposed to the public books that showed reimbursements for services that presumably cost them money to provide. It was, at the time, the largest Medicare/Medicaid fraud case in US history, though such fraud still costs the American taxpayer tens of billions annually.
I can't take the Post or any other conservative publication or individual conservative seriously when they talk about this kind of crime, because the only time they seem to care about it is when they can use it as ammo against a group they don't like. In the eyes of a Republican, the only crime the Somalis involved really committed here is that their scheme wasn't sophisticated enough to succeed long-term and that they didn't properly insulate themselves from criminal repercussions. The CEO of HCA and the founder of the parent company was forced to resign when the fraud was discovered, but he never faced any criminal charges personally, or had to pay back any of the money himself. After all, it was the company that committed the crimes, not him, and by stepping down he was "accepting responsibility" for what happened on his watch. This acceptance of responsibility came with a $5.1 million cash payment ,$300 million in stock and options, and a $950k/year consulting position. He would later run several other healthcare companies before becoming governor of Florida and United States Senator, a position he holds today. But I have not yet heard anyone in the Republican party or conservative media criticize Rick Scott for being responsible for one of the biggest scams in US history. Instead they give full-throated defenses of how he was somehow a victim of circumstance and how, contrary to what witnesses said, he was totally unaware that providers were upcharging almost every expense. And I somehow doubt that a few Somalis bringing this kind of issue to national attention will lead to any kind of reckoning and calls for Scott to resign. So please, if you're going to look for a reason to denigrate Somali immigrants, don't cry crocodile tears about how bad fraud is, at least unless you're willing to have an equal amount of concern when rich white people do it.
I feel like the part that is missing here is that groups can be entitled to government payments at all; unless I'm misunderstanding, the whole premise of this case is that Feed Our Future was able to (successfully) sue because they felt like they were owed government money, and a judge agreed with them.
Like, correct me if I don't have this right, but the sequence of events you laid out appears to be:
Why can't the answer just be "the government doesn't owe grant money to anyone?" (And before you tell me its an anti-discrimination effort; like, duh, but I don't doubt that if it had been an obviously right wing group applying, the judge would've found that they were not eligible).
On a related tangent - has anyone else been getting the feeling that a lot of the complaints that are being attributed to the swamp, or the ruling governmental party, or really just anything political are actually problems with the judiciary? I hear a lot of leftists talk about how the supreme court is corrupt and in Trump's pocket; by the same token, a lot of right-wingers mention the ninth(?) circuit court as being unusually corrupt and blocking the right-wing government from accomplishing its goals (sorry, Canadian, I don't actually know the US court system super well). Up here in Canada, we have judges that rule that immigration status modifies a party's guilt (specifically, if you are sentenced to 6 months, it will affect your immigration claim; hence, a lot of judges rule that even severe crimes like assault warrant 6 months less a day).
I'm beginning to get the feeling that having a group of individuals, who are appointed for life, paid generously, and who are basically impossible to remove may have been something of a mistake.
Great question. I think the main source of your misunderstanding is that your conception of the kind of grants involved are different from those that are at issue here. Most people's idea of a grant is some fixed sum of money that's available for a specific purpose that the government awards to a specific group, and that's true of a lot of grants relating to things like the arts, scientific research, local government, etc. These each have their own criteria that vary, and I'm not going to get into that here because it's not really the point. The grants at issue here aren't for specific sums of money but are reimbursement for services that the government is paying for. Think of something like Medicaid—a qualifying individual who seeks medical treatment will have the cost of qualifying care covered by the program. It doesn't really work, though, if you just ask doctors to apply for $500,000 grants that they can use to provide free care. There are a lot of people who are going to need a lot of services and we can't really identify the particular amount each person is going to need from a particular provider, and we want as many providers as possible to participate in the system so that there won't be as much friction.
So the way it works is that every provider who wants to participate gets qualified and once the permission is granted they submit bills from qualifying patients to Medicaid for reimbursement, which they're paid based on a fixed schedule. To be clear, not all providers participate, but most do, and when you're aiming for coverage to be as wide as possible you make it so any provider who meets the criteria is eligible. What you can't do then, legally, is deny the ability for a provider who meets the criteria to participate based on you're own prejudices. You need a concrete reason.
Feed Our Future was a group that was purportedly providing a similar service, which would provide meals to children who qualified. Since they couldn't say in advance how many kids would show up each day, they would keep records and submit them for reimbursement. So say if one location served 100 meals per day on average, and the government reimbursed at $10/meal, they'd send a bill at the end of the month for $30,000. The state had denied them grant money for years based on their perception that they were shady, which was probably based on legitimate reasons. The problem was that in 2020 they were applying to participate in a COVID-era Federal program that was being administered by the state, and the Feds set the eligibility requirements. So while they may not have met the requirements the state had set in the past, the state couldn't use that as a justification to deny them Federal money distributed under a different program. So it was ultimately the Federal government who prosecuted them, not the state, as they had stolen Federal money.
Okay, that makes a lot of sense - thank you!
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