U.S. Labor Secretary Lori Chavez-DeRemer testified before the House Appropriations subcommittee overseeing labor, health and human services, education, and related agencies on May 15, 2025, in Washington.
The U.S. Department of Labor announced plans for a targeted review of Minnesota’s unemployment insurance program amid increased scrutiny of fraud in the state’s human services programs, an issue that has gained political attention at the national level.
In a letter to the Minnesota Department of Employment and Economic Development (DEED), the department said recent news reports detailing fraud in Medicaid-funded human services programs could indicate potential fraud or abuse within the state’s unemployment benefits system.
“If there has been any related abuse of our (unemployment insurance) systems, it will not be tolerated, and I trust our specialized strike team to get to the bottom of this and report their findings directly to me,” Labor Secretary Lori Chavez-DeRemer said in a press release, per the Minnesota Reformer.
Also, Chavez-DeRemer told Fox Business on Monday that her agency was sending an unemployment insurance ‘strike team’ to Minnesota to widen the fraud probe.
“We’re going to send in a UI strike team to find out exactly what’s happening on the ground. We will NOT tolerate fraud under this administration,” she told host Stuart Varney.
Recent reports indicate Minnesota has suffered substantial taxpayer-funded fraud, much of it allegedly involving individuals within the state’s Somali community.
The state is still recovering from the fallout of the $250 million Feeding Our Future case, as new reporting from City Journal uncovered additional alleged fraud tied to Minnesota’s Medicaid Housing Stabilization Services program.
The report also noted accusations that millions from the scheme were funneled to the terror group Al Shabaab.
Investigators estimate the total fraud at roughly $1 billion across various public assistance programs.
Tenney added that whistleblowers told lawmakers “they believe the total amount of fraud could total up to more than $8 billion.”
The Trump administration has cited allegations of fraud to justify expanding federal law enforcement activity in Minnesota.
Federal authorities, including the FBI and the Department of Homeland Security, have alleged widespread fraud at Somali-owned child care centers across the state.
Minnesota is home to the largest Somali population in the United States, and most of the roughly 70 defendants charged in the case are of Somali descent.
Governor Tim Walz announced on Monday that he will not seek re-election due to growing criticism over a scandal, as reported by CNN. Walz then wrote on X/Twitter that he had “decided to step out of the race and let others worry about the election while I focus on the work.”
Feeding Our Future is a nonprofit that prosecutors say falsely claimed to provide meals to children in need during the COVID-19 pandemic. Beginning in 2022, federal authorities charged dozens of people connected to the organization, most of them of Somali origin.
In March, a federal jury found nonprofit founder and executive director Aimee Bock and Salim Said guilty for their roles in a $250 million fraud scheme tied to a government-funded children’s nutrition program. Said was a co-owner of a local restaurant that supplied meals under the program.
