Minnesota’s massive welfare fraud schemes have cost taxpayers billions while potentially funding overseas terrorism, exposing critical vulnerabilities in federal programs that demand immediate reform under the new administration.
Story Overview
- Federal prosecutors estimate billions lost to welfare fraud schemes in Minnesota targeting multiple programs
- Largest documented case involves $250 million Feeding Our Future fraud with false meal claims
- Federal officials concerned stolen funds may have reached Al-Shabaab terrorist organization overseas
- Treasury Department now investigating potential terrorism financing connections
Massive Federal Program Exploitation
Minnesota has become ground zero for unprecedented welfare fraud targeting multiple federal programs. The U.S. Attorney’s Office has charged dozens of defendants in schemes involving housing aid fraud, pandemic relief fraud, child nutrition fraud, and false billing for autism therapy. Prosecutors estimate these coordinated schemes have drained billions from Minnesota taxpayers, representing one of the largest welfare fraud operations in American history.
Quarter-Billion Dollar Feeding Scheme
The largest documented case centered on the Federal Child Nutrition Program through Feeding Our Future. Defendants including Haji Osman Salad, Sharmarke Issa, and Khadra Abdi pleaded guilty to wire fraud in a $250 million scheme. Between June 2020 and 2022, Salad falsely claimed his company supplied over 15 million meals to program sites, while Issa fraudulently received funds claiming his sites served 2.3 million meals to children.
Terrorism Financing Concerns
Federal counterterrorism officials have raised alarming concerns that portions of stolen welfare funds were routed overseas through informal cash-transfer networks called hawalas. Intelligence suggests some money may have reached Al-Shabaab, an al-Qaeda-linked terrorist organization operating in Somalia. The Treasury Department has launched investigations into these potential terrorism financing connections, though the full scope remains under investigation.
Systemic Program Vulnerabilities Exposed
These schemes highlight critical weaknesses in federal program oversight that allowed massive fraud to continue undetected for years. The cases reveal how lax verification processes and insufficient monitoring enabled fraudsters to exploit programs designed to help vulnerable populations. Former fraud investigator Kayesh Magan acknowledged the scope of the problem, noting the concentration of defendants in high-profile cases from Minnesota’s Somali-American community.
Judge Nancy E. Brasel described the fraud as “tragic” for damaging community reputations while undermining public trust in essential safety net programs. The cases demonstrate urgent need for enhanced oversight, verification procedures, and accountability measures to prevent future exploitation of taxpayer-funded programs designed to serve legitimate needs.
Sources:
Federal investigators warn Minnesota welfare fraud may have helped fund al-Shabaab
Three Plead Guilty to Wire Fraud in $250 Million Feeding Our Future Fraud Scheme
Minneapolis Woman Sentenced to 51 Months in Prison for Role in Feeding Our Future Fraud Scheme
