(A)Political - January 3rd

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The U.S. Gov. is threatening jail time and denaturalization as some of the consequences for those linked to the alleged fraud in Minnesota. The state of California is delaying the revocation of 17,000 CDL licenses despite pressure from the Department of Transportation. Zohran Mamdani has been sworn in as the 112th Mayor Of NYC as he vows to enact the Democratic Socialist policies he campaigned on.

• Somali Fraud Allegations Draw Federal Government Ire

• California Delays Revoking 17,000 CDL’s Linked To Migrant Truckers

• Mamdani Sworn In As Mayor Of NYC, Vows To Enact Democratic Socialist Policies

Somali Fraud Allegations Draw Federal Government Ire

_{By: Atlas}

The Trump administration announced Tuesday that it is freezing all federal childcare payments to Minnesota and demanding a comprehensive audit of the state's day care centers as federal authorities launch a multi-agency investigation into alleged fraud schemes that prosecutors say could total billions of dollars.

Deputy Secretary of Health and Human Services Jim O'Neill said in a post on X that the move is in response to "blatant fraud that appears to be rampant in Minnesota and across the country."

"We have turned off the money spigot and we are finding the fraud," O'Neill said.

Minnesota receives approximately $185 million in childcare funds annually through the Administration for Children and Families, an agency within HHS, according to Assistant Secretary Alex Adams.

O'Neill said he has demanded Minnesota Gov. Tim Walz submit an audit of day care centers that includes attendance records, licenses, complaints, investigations and inspections. Payments will now require "justification and a receipt or photo evidence" before money is sent, and HHS has launched a fraud-reporting hotline.

The announcement came one day after U.S. Homeland Security officials were in Minneapolis conducting a fraud investigation by going to unidentified businesses and questioning workers.

Multi-agency investigation targets fraud networks

Federal authorities have deployed resources from multiple departments to investigate what they describe as extensive fraud networks operating across Minnesota's social services programs.

The Department of Justice has issued over 1,750 subpoenas, executed more than 130 search warrants, and conducted over 1,000 witness interviews as part of its ongoing investigation, according to the White House. To date, DOJ has charged 98 defendants in Minnesota fraud-related cases, of whom 85 are of Somali descent. Sixty-four defendants have already been convicted.

The Department of Homeland Security has hundreds of Homeland Security Investigations officers on the ground in Minnesota conducting door-to-door investigations of suspected fraud sites.

"The Department of Justice, as we speak, is continuing to execute search warrants and subpoenas," White House press secretary Karoline Leavitt said Wednesday. "The Department of Homeland Security is conducting door-to-door investigations on the ground at potential fraud sites, and they're also conducting continued deportations of illegal aliens in Minnesota's communities."

The FBI is conducting investigations into dozens of the state's health care and home care providers accused of fraud, deploying forensic accountants and data analytics teams, and investigating potential links to elected officials and terrorist financing, according to the White House.

Additional agencies involved include the Small Business Administration, which has halted all annual grant program payments to Minnesota and suspended 6,900 borrowers in the state for approximately $400 million in suspected fraudulent activity. The Department of Housing and Urban Development has dispatched a team to conduct investigations into possible public housing assistance fraud. The Department of Labor is conducting a targeted review of Minnesota's Unemployment Insurance program. The Department of Agriculture has demanded Minnesota conduct recertification for its SNAP recipients.

Potential consequences include denaturalization

Federal officials have indicated that those found guilty of fraud could face severe consequences beyond criminal prosecution, including the potential revocation of citizenship for naturalized Americans.

"We're also not afraid to use denaturalization," Leavitt said. "That's a tool at the president and the Secretary of State's disposal, and it's one this administration has previously used before."

Leavitt warned that "people will be in handcuffs" as the investigation progresses.

"President Trump is not going to let Governor Walz off the hook," she said, adding that "this is a top priority for the administration."

As part of Operation Twin Shield earlier this year, DHS identified over 1,300 fraud findings based on site visits in Minneapolis and Saint Paul and is currently determining which cases require additional vetting, including for refugee status and potential denaturalization, according to the White House.

FBI Director Kash Patel called the reports of fraud the "tip of a very large iceberg." Federal prosecutors said during a recent press conference that the Minnesota fraud scandal could end up costing taxpayers upwards of $9 billion.

A federal prosecutor alleged earlier this month that half or more of the roughly $18 billion in federal funds that supported 14 programs in Minnesota since 2018 may have been stolen. Most of the defendants in the child nutrition, housing services and autism program schemes are Somali Americans, according to the U.S. Attorney's Office for Minnesota.

Scope of alleged fraud schemes

The investigation encompasses multiple programs that have been exploited over several years, with the most prominent being the Feeding Our Future scandal.

In that case, 57 defendants in Minnesota have been convicted in connection with a $300 million pandemic food fraud scheme. Prosecutors said the nonprofit organization was at the center of the country's largest COVID-19-related fraud scam, in which defendants exploited a state-run, federally funded program meant to provide food for children by billing for millions of meals that were never served.

The current wave of allegations extends to child care centers, autism services, elder assistance programs and housing stabilization services. A viral video published by a right-wing influencer on Friday claimed to have found day care centers operated by Somali residents in Minneapolis that had committed up to $100 million in fraud, drawing national attention to the issue.

Rep. Mike Haridopolos of Florida compared the alleged fraud to organized crime operations.

"This is what the mafia does. They steal, they lie, they cheat," Haridopolos said on Fox News. "The federal government has to use the full powers that we used to destroy the mafia back in the 1960s. Nothing short of it."

Former House Oversight Committee Chairman Jason Chaffetz suggested the fraud may extend beyond Minnesota.

"I don't think this is just Minnesota. I think this is going to New York, Illinois, California, your usual suspects are going to be right there on the list," Chaffetz said.

State response and political fallout

Minnesota Gov. Tim Walz has pushed back against some of the administration's characterizations while acknowledging the seriousness of the fraud allegations.

"We've spent years cracking down on fraudsters. It's a serious issue — but this has been his plan all along," Walz wrote on X Tuesday, referring to Trump. "He's politicizing the issue to defund programs that help Minnesotans."

Walz has said an audit due by late January should give a better picture of the extent of the fraud. He has publicly acknowledged the problem and pledged to tackle it, saying the situation "is on my watch" and that he is "accountable" for fixing it.

The governor issued a third-party audit of Medicaid billing through Minnesota's Department of Human Services and paused payments for some services while an audit is underway.

"We cannot effectively deliver programs and services if they don't have the backing of the public's trust," Walz said in a statement. "In order to restore that trust, we are pumping the brakes on 14 programs that were created to help the most disadvantaged among us, yet have become the target of criminal activity."

U.S. Rep. Ilhan Omar, Minnesota's most prominent Somali American and a Democrat, has urged people not to blame an entire community for the actions of a relative few.

Minnesota has the largest Somali population in the United States. Trump has repeatedly criticized Walz's administration over the fraud cases while targeting the Somali diaspora in the state.

The House Oversight Committee is expected to hold multiple hearings on the alleged scandal in the coming weeks.

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