Starting With Curious

One of the oldest documented cases of fraud is reported in Genesis chapter 29. Jacob worked for his prospective father-in-law, Laban, in exchange for marrying Laban’s daughter Rachel. However, on the wedding night, Laban tricked Jacob by substituting his other daughter, Leah, and Jacob was forced to work another seven years for the right to marry Rachel. (Not only fraud, but bigamy to boot.) Fraud is as old as humanity. And stereotypes aside, it appears to be universal among human societies.

But if you listen to the Trump administration and other Republicans, you would think it was something unique to Democratic-led states and people of color. “U.S. Treasury Secretary Scott Bessent Takes Decisive Action Against Somali Fraud in Minneapolis,” read a government press release. Conservative commentators can’t stop writing about “Minnesota’s Somali Fraud.”  This is nothing more than political retribution and racism that, in addition to being vile in and of itself, threatens to divert resources from tackling much bigger problems, and distracting from the actual root causes of fraud in public services.

Now I do not want to suggest fraud is not real. A study from George Washington University estimates that fraud in healthcare alone accounts for 3-10% of total spending. This would equal between $150 billion and $530 billion of the $5.3 trillion the US spent on healthcare in 2024. And there is another $2 trillion in other social service spending at federal, state, and local levels, also subject to fraud. The GW study suggests that eliminating fraud would yield more than enough to cover all uninsured Americans. So yes, fraud is a huge problem.

But the current obsession with “Minnesota Somali fraud” is misleading and dangerous. First, it unfairly demonizes one community for racially tinged political gain. Take Feeding Our Future, the non-profit that stole hundreds of millions of dollars in pandemic relief funds. While the vast majority of those implicated are Somali American, the convicted mastermind and ringleader is a White woman. The state officials who appeared to be ignoring warnings about the fraud at Feeding Our Future are also not Somali American. And some of the largest fraud cases in the past few years include: $73 million in fraudulent claims by Gary Martin of Texas;  $1.3 billion in fraudulent claims and kickbacks by Floridian Philip Esformes; and ongoing investigations into massive Medicare fraud at United Health Group. Minnesota has one of the largest Somali populations in the world, second only to Mogadishu (capital of Somalia). It would be surprising if Somalis were not represented among those committing fraud, just as they are represented among those providing healthcare, those in public service, those in the arts, etc.

This not only barely disguised racism, it also gets in the way of actually preventing fraud. According to US Sentencing Commission statistics, the top jurisdictions for government benefits fraud in 2024 were:

• Southern District of Florida (69);
• Eastern District of North Carolina (35);
• District of Puerto Rico (33);
• District of South Carolina (29);
• Eastern District of Virginia (26, tie);
• Southern District of New York (26, tie);
• Southern District of Texas (26, tie).

And 93.3% of those convicted of fraud were US citizens. By focusing on places like Minnesota, the Trump administration is missing out on the opportunity to follow the Willie Sutton principle of going where the money is (including large, Republican controlled states).

Asserting that some communities are uniquely prone to fraud also masks the real root cause, which is not the moral failings of liberals or immigrants, but the accelerating privatization of public benefits. In a democracy – even one that is under assault like ours – it’s very difficult to steal money directly from government coffers. The outsourcing of social services, promoted as being more efficient, actually creates layers of complexity that make it much easier to commit fraud. And increasingly, the task of detecting fraud is also outsourced to private companies, with predictable consequences. In addition to identifying and punishing those who have taken advantage of the system, we need to think about reining in the mass privatization that allows those abuses to occur.

To be clear, there are signs that due diligence was overly lax here in Minnesota in the past few years, a gap the state is now taking steps to correct. The governor and attorney general appear to have every incentive to want to find and punish the fraud. Unfortunately, the federal authorities, and many Minnesota Republicans, appear more interested in bashing immigrants and sheltering their corporate sponsors than in protecting the public good.