A State’s Safety Net—or a Fraudster’s Playground?
FBI Raids Minnesota Housing Program Over Fraud Allegations; Gov. Walz Vows Accountability
Minnesota Governor Tim Walz is responding to a growing fraud scandal involving the state’s Housing Stabilization Services program, after FBI agents conducted multiple raids across the Twin Cities this week. The program, which is designed to help older adults and individuals with disabilities—particularly those facing mental illness or substance use disorders—secure stable housing, is now under intense scrutiny following allegations of widespread abuse and fraudulent billing.
Federal investigators executed search warrants at eight locations connected to five service providers suspected of billing the government for services they allegedly never provided. The targeted sites included locations in St. Paul, Roseville, Blaine, Little Canada, and Woodbury, according to WCCO.
U.S. Attorney Joe Thompson confirmed that the raids were part of a broader investigation into Medicaid fraud and described the housing program as “extremely vulnerable to fraud.” Thompson also warned that the situation reveals a deeper, systemic issue with oversight in state-funded services.
Walz Responds: “You Will Get Caught”
Governor Walz, addressing the raids in an interview with WCCO, issued a stern message to would-be fraudsters. “If you’re going to commit these crimes in Minnesota, you are going to get caught,” he said.
Walz, who previously served as the Democratic vice presidential nominee, emphasized that while no system is entirely immune to exploitation, new safeguards are being implemented to tighten oversight and increase accountability within state agencies.
“You’re always going to find people trying to cheat the system,” Walz said. “But I think this legislative session—with a new Inspector General in place, new tools at our disposal, and an expanded capacity—we’re finally able to respond more effectively.”
He also expressed interest in adopting artificial intelligence (AI) technologies to help detect fraudulent activity more efficiently, though he noted the state legislature did not fully approve funding for those tools. “I wish we would have got a little more,” he admitted.
A Pattern of Fraud?
The recent housing fraud case comes on the heels of other high-profile investigations in Minnesota, including the Feeding Our Future scandal and probes into alleged misuse of funds at autism treatment centers.
Critics, particularly from the Republican Party, are seizing on the latest incident as evidence of persistent oversight failures under the Walz administration.
State Representative Kristin Robbins (R-Maple Grove), who chairs the House Fraud and State Agency Oversight Committee, described the case as an “enormous failure” of governance.
“This follows the same pattern the Fraud Committee has been highlighting for months,” Robbins said in a statement. “Minnesota expands unregulated Medicaid services, and fraudsters jump in to exploit lax oversight by the Department of Human Services (DHS), stealing millions from taxpayers and the very people the programs are meant to help.”
Walz: Generosity Doesn’t Excuse Exploitation
Governor Walz acknowledged that Minnesota’s generous approach to social welfare programs—particularly those focused on food security and housing—can sometimes be exploited by bad actors.
“Minnesota is a generous state, and we often err on the side of compassion—making sure children have food, and people have stable housing,” he said. “But I’ve told our agencies that good intentions are not enough. We must protect these systems from being abused.”
Walz reaffirmed his administration’s commitment to working with federal authorities to prosecute those who exploit taxpayer-funded services. “We will hold bad actors accountable, and we are increasing our oversight capabilities to prevent this kind of fraud in the future,” he added.
A Tragic Week: Walz Responds to School Shooting
The week was further darkened by tragedy as Minnesota faced a deadly school shooting at Annunciation Church and School in Minneapolis. The attack left two children and the shooter dead, and 17 others wounded, sending shockwaves across the state.
Governor Walz visited the scene and addressed the media, visibly emotional as he spoke about the loss suffered by the community. “Instead of a joyful first day of school, these children were met with evil, horror, and death,” he said.
Walz expressed his gratitude to federal partners and praised the quick response from law enforcement and emergency personnel. He also acknowledged a personal call from former President Donald Trump, who reportedly reached out alongside members of his leadership team to offer condolences and federal support.
“I received a call from President Trump, who expressed deep sympathy and an offer to help the community with whatever is needed during this difficult time,” Walz said.
Moving Forward
As the fraud investigation unfolds, state and federal officials appear united in their commitment to rooting out abuse in public programs. Meanwhile, the dual crises—a sweeping fraud case and a tragic school shooting—underscore the complex challenges facing Minnesota’s leadership as it works to balance compassion with accountability.