DOJ Creating New Fraud Division After Minnesota Benefit Scandals, Deputy AG Says
Deputy Attorney General Todd Blanche said on the "Ruthless" podcast that the Justice Department is setting up an "entirely new" fraud division and will name a new assistant attorney general whose sole focus will be prosecuting fraud involving federal funds, with Minnesota Medicaid, school‑lunch and daycare schemes cited as prime drivers. Blanche tied the move to President Donald Trump’s January decision to put Vice President J.D. Vance in charge of a national "war on fraud" after billions in taxpayer dollars sent to Minnesota were allegedly mishandled or stolen. He highlighted a case of two Pennsylvania men who allegedly secured $4 million in federal funds by falsely claiming to operate homeless shelters in Minneapolis, and said the federal government "gives money away like candy" to bogus providers that bill for non‑existent services. Blanche vowed that "no fraud [is] too small, and no fraud [is] too large," saying DOJ wants to make clear that stealing more than $1,001 in federal money will be treated as a felony with prison time, which he argued would be a significant deterrent. The remarks signal an aggressive new enforcement posture on federal benefit fraud, with Minnesota serving as a warning about what happens when oversight fails.
📌 Key Facts
- Deputy Attorney General Todd Blanche announced that DOJ is launching an "entirely new" fraud division and will appoint a new assistant attorney general to run it.
- The initiative is framed as part of President Donald Trump’s and Vice President J.D. Vance’s "war on fraud" following large‑scale fraud of federal funds in Minnesota, including Medicaid, school‑lunch and daycare programs.
- Blanche cited a specific $4 million Minnesota homeless‑shelter fraud case involving two Pennsylvania men as an example of the problem.
- He said DOJ’s goal is to treat thefts above $1,001 in federal funds as felony cases with prison time, arguing that clear, certain punishment will deter fraud.
- Blanche described current federal disbursement practices as giving away money "like candy" with "no check" on fraudulent bills sent by some benefit providers.
📊 Relevant Data
In the Feeding Our Future fraud scandal in Minnesota, which involved over $250 million in fraudulent claims for child nutrition programs, many of the charged or convicted individuals were Somali, with reports indicating that the majority of the nearly 100 charged individuals are Somali immigrants or Somali-Americans.
How has the Somali community shaped the workforce in Minnesota? — CBS News
The Somali population in Minnesota is estimated at around 80,000 to 100,000 people, representing approximately 1.4% to 1.8% of the state's total population of about 5.7 million.
Somali population - Cultural communities — Minnesota Compass
Minnesota's large Somali community resulted from refugee resettlement programs starting in the 1990s, driven by the Somali Civil War, with organizations like Lutheran Social Services and the U.S. State Department's refugee programs facilitating the migration.
How Minnesota became the center of the Somali diaspora — Sahan Journal
The poverty rate among Somali Minnesotans is estimated at 22.8% for all people, compared to the statewide poverty rate of about 9%, with over 50% of children in Somali immigrant homes living in poverty.
Somali Immigrants in Minnesota — Center for Immigration Studies
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