Minnesota Fraud Investigations Gaining Attention
The U.S. House Oversight Committee is currently examining the issue of fraud in Minnesota, particularly in light of claims that a statewide program may lead to losses as high as $9 billion.
Although recent scams in Minnesota have captured national headlines, investigations by local outlets like FOX 9 have been in progress for over a decade.
Background on FOX 9’s Investigations
Since 2013, FOX 9 has conducted several investigations focused on fraud within child care services, Medicaid, and other schemes in Minnesota.
In February 2013, reporter Jeff Byron highlighted fraudulent activities in the daycare sector, spotlighting Yasmin Ali, who owned Deqo Family Centers and All Nations Home Health Care. A raid, carried out by the FBI and local authorities, revealed a system that was potentially costing taxpayers millions.
Ali had manipulated the system by employing parents who also enrolled their children in her daycare. Eventually, she was charged with theft and extortion.
A year later, Ali faced charges of defrauding the state of nearly $4 million. At one point, the Ramsey County Prosecutor’s Office recommended a bail of $1 million, considering her a flight risk. Although her bail was eventually reduced to $200,000, she failed to appear at her trial.
Additionally, FOX 9’s findings revealed that Deqo Family Centers received significant public funds, including nearly $90,000 for children’s meals in its initial year, with the catering service run by Ali’s brother.
The following significant fraud case involving Deqo came to light in 2019, with additional details available in a comprehensive report.
2015 Daycare Scandal
In October 2015, FOX 9 reported on fraudulent practices associated with four childcare centers in the metro area, which bilked over $1 million by billing for nonexistent children. Investigators uncovered that the center owners fabricated names to receive payments under the pretense of protecting children.
Hidden cameras confirmed suspicions—attendance was often 30% below what was billed. In one instance, the center claimed to bill for 34 children on a day when none were present. Three childcare managers were charged with theft, along with others in the scheme.
Ultimately, some defendants entered plea agreements, and the court restricted their ability to work in licensed childcare in Minnesota.
In 2018, FOX 9 extended its investigation to reveal that child care centers were potentially stealing up to $100 million annually through overbilling.
Contrasting Estimates of Fraud
In March 2019, Congressional Auditor Jim Nobles expressed skepticism regarding the alleged scale of daycare fraud, stating there was insufficient evidence for the claimed figures. Yet, DHS Fraud Division head Jay Swanson estimated that one aspect of the fraud involving 15 centers exceeded $56 million in payments.
Chuck Johnson, acting secretary of Human Services, emphasized the need for vigilance in ensuring assistance reaches those truly in need. Investigations, including search warrants regarding suspicious centers, suggested millions were misallocated.
A notable case involved Fozia Ali, who was profiled for her fraudulent claims while traveling abroad. She was ultimately sentenced to two years in prison for her actions.
Department of Health and Human Services Response
In 2018, through various whistleblower emails, FOX 9 revealed that DHS had been informed about large-scale fraud issues several years prior. In light of growing scandals, the Walz administration allocated additional funds for enforcement and oversight.
Feeding Our Future Investigation
In March 2022, another significant investigation arose regarding the Feeding Our Future program, which provides meals for low-income children. Attorney General Keith Ellison confirmed an ongoing investigation into the organization, pointing to a failure to manage resources effectively and possible legal violations.
Recent Fraud Cases in Minnesota
In 2025, FOX 9 unveiled further investigations into various agencies, including Integrated Community Assistance, which faced allegations of providers billing for services never rendered. Federal prosecutors also pressed charges against several individuals connected to fraudulent activities involving housing stability services.
Moreover, fraud cases linked to an autism center came under scrutiny, shedding light on the broader issues of fraud permeating community service programs in Minnesota.
