Walz Vows Tougher Oversight After FBI Raid on Housing Aid Providers

Minnesota Governor Tim Walz has responded firmly to recent FBI raids targeting the state’s Housing Stabilization Services (HSS) program—an initiative designed to help vulnerable populations such as older adults and people facing mental illness, disability, or substance use challenges find safe housing.

FBI investigators executed search warrants at eight locations connected to five providers across the Twin Cities, Reuters reports. These providers are suspected of billing Medicaid for services that were allegedly never delivered, exploiting weak oversight within the program. Facilities in St. Paul, Roseville, Blaine, Little Canada, and Woodbury were among those targeted.

“If you’re going to commit these crimes in Minnesota, you are going to get caught,” Walz said in a recent interview, sending a clear message to potential fraudsters.

Bolstering Defenses Against Fraud

Acknowledging that even well-intentioned programs can be prey to abuse, Walz stated that the recent raids revealed the system’s vulnerabilities. “Minnesota is a generous state. We err on the side of ensuring children have food and individuals have homes,” he explained. “But good intentions aren’t enough when unscrupulous actors seek to exploit them.”

In response, the administration has introduced a series of reforms to strengthen oversight. These include expanding the role of a state inspector general, employing new fraud detection tools, and exploring AI-based solutions to flag suspicious billing patterns before they spiral out of control.

“We’ve stepped up our game during this legislative session,” he said. “We added tools, capacity, even AI systems that can help us catch abuse earlier.”

Legal and Political Ramifications

Acting U.S. Attorney Joe Thompson underscored the severity of the issue, warning that the raids marked a broader problem with Medicaid and social service fraud statewide. His comments echoed concerns previously raised by his predecessor and signal mounting federal attention to the matter.

Republican lawmakers, while welcoming the enforcement actions, criticized the Walz administration for failing to prevent such large-scale abuse in the first place.

Rep. Kristin Robbins, chair of the House Fraud and State Agency Oversight Committee, called the situation “an enormous failure” by state leadership. She argued that expanded Medicaid and related services, combined with lax oversight, created fertile ground for fraud.

“This is the same pattern we’ve been warning about for months,” she said. “Minnesota expanded certain services too fast, without proper regulation, and fraudsters moved in.”

Leadership in Crisis: Extending Compassion

Walz’s firm stance on the investigation came amid another crisis—the tragic shooting at Annunciation Catholic School in Minneapolis, where two children were killed and dozens were injured.

Standing near the school, Walz described the scene as a devastating departure from the joyful, hopeful start to the school year. “Instead of laughter and curiosity, they were greeted by violence and horror,” he said, calling the attack “evil” and pledging the state’s full support.

Walz praised the swift cooperation between state and federal agencies, including assistance pledged by President Trump, as well as outreach from Senator Amy Klobuchar and members of Trump’s administration. He emphasized that solidarity, shared grief, and rapid coordination were vital in such moments.

Reinforcing the Social Safety Net—Responsibly

Walz’s dual response to both a criminal investigation and a community tragedy reflects his leadership approach: compassionate, pragmatic, and geared toward accountability.

He reiterated that Minnesota isn’t abandoning its social safety net, but is determined to ensure only legitimate providers receive taxpayer funds. “We’re still going to help people facing tremendous challenges,” he said. “But we won’t stand by when programs meant to help are hijacked by bad actors.”

The combination of tightened safeguards, new oversight tools, and public accountability could lay the groundwork for stronger state policy—and potentially serve as a model for preventing similar abuse in other states.

As the legal cases proceed, Minnesota officials say they will cooperate fully with federal investigators. At the same time, they’ve challenged their own systems to do better—and to ensure that aid reaches those who truly need it, not those who seek to exploit it.