(NewsNation) — The latest turn in a federal fraud investigation in Minnesota involves COVID-era loan programs through the Small Business Administration.
The Trump administration is now focusing on Paycheck Protection Program loans offered at the height of the pandemic. If confirmed fraud is discovered, it’s not out of the question that it could lead to criminal charges, imprisonment or, at minimum, repayment.
Fraud investigations in Minnesota have centered around various social service programs, including child care centers primarily run by the Somali community.
The Somali community in Minneapolis has said they are being unfairly targeted, noting that unproven fraud claims can put people in danger.
After a video went viral for appearing to expose fraud at day care centers in the Twin Cities, the manager of one child care center says vandals broke in and stole employment files and enrollment records. That day care was not one of the ones featured in the video.
In response to the allegations made in the video, the Trump administration has frozen certain child care funds not just for Minnesota, but for the entire country, requiring confirmation no fraud is taking place.
People are arguing the freeze could have a major impact on low-income families across the state who are not defrauding the system.
The funding on hold helps cover the cost of child care for more than 20,000 children and 12,000 Minnesota families each month.
During a press conference Thursday, one Somali woman became emotional while explaining how the loss of child care funds would impact her family and then appeared to suffer a panic attack on stage as she addressed the anger directed at her community.
“I’m currently a medical student. I rely on child care. I work,” she said. “If child care is cut, I’m unable to work or go to school.”
In addition to child care facilities, assisted living facilities are also under scrutiny.
NewsNation’s Rich McHugh visited a number of facilities receiving millions of dollars that are linked to a man who has previously been indicted for money laundering. That defendant has pleaded not guilty to the charges.
Republicans in Minnesota have been crying foul for a while, saying that Minnesotans have become numb to the fraud reports because they happen so often.
The top five most expensive fraud schemes exposed in the state since 2019 include Feeding Our Future, with more than 50 criminal convictions and $250 million in total losses, child care fraud resulting in $150 million in losses, addiction outpatient services fraud resulting in $58 million in losses, Medicaid fraud resulting in $50 million in losses and frontline worker fraud costing $45 million, according to Minnesota House Republicans.
Minnesota is not the only state that has faced fraud allegations, and it’s possible other states across the country also have fraud schemes that are pilfering millions of dollars from taxpayers.
There are now two hearings scheduled to address these allegations on Capitol Hill, with Minnesota Republican state lawmakers set to testify next week, followed by Gov. Tim Walz and Attorney General Keith Ellison, who have been asked to appear at a second hearing in February.