The Minnesota House passed a bill to end the state’s Housing Stabilization Services (HSS) Medicaid benefit, which has been the face of fraud schemes originating in the state.
“We are attempting to have this program removed from statute so that when it’s time for this program to come back, it can be done so with the Legislature as the driving force behind that,” explained Rep. Joe Schomacker, the Republican co-chair of the chamber’s human services committee, according to CBS News.
The Minnesota Senate needs to pass the bill.
However, the upper chamber has worked on a similar bill.
Gov. Tim Walz has attempted to appear shocked and stunned by the massive fraud in his state, even suggesting an overhaul of Minnesota’s Department of Human Services.
The Minnesota Staff Fraud Reporting Community has been at the forefront of the exposure, placing the blame squarely on Walz:
Tim Walz is 100% responsible for massive fraud in Minnesota. We let Tim Walz know of fraud early on, hoping for a partnership in stopping fraud but no, we got the opposite response. Tim Walz systematically retaliated against whistleblowers using monitoring, threats, repression, and did his best to discredit fraud reports. Instead of partnership, we got the full weight of retaliation by Tim Walz, certain DFL members and an indifferent mainstream media. It’s scary, isolating and left us wondering who we can turn to.In addition to retaliating against whistleblower, Tim Walz disempowered the Office of the Legislative Auditor, allowing agencies to disregard their audit findings and guidance. Media and politicians supporting Tim Walz or the DFL-agenda attacked whistleblowers who were trying to raise red flags on fraudulent activities.
In November, City Journal spelled out the fraud within HSS since its birth in 2020 to combat homelessness:
Costs quickly spiraled out of control. In 2021, the program paid out more than $21 million in claims. In the following years, annual costs shot up to $42 million, then $74 million, then $104 million. During the first six months of 2025, payouts totaled $61 million.On August 1, Minnesota’s Department of Human Services moved to scrap the HSS program, noting that payment to 77 housing-stabilization providers had been terminated this year due to “credible allegations of fraud.” Joe Thompson, then the Acting U.S. Attorney for the District of Minnesota, went even further, stating that the “vast majority” of the HSS program was fraudulent.On September 18, Thompson announced criminal indictments for HSS fraud against Moktar Hassan Aden, Mustafa Dayib Ali, Khalid Ahmed Dayib, Abdifitah Mohamud Mohamed, Christopher Adesoji Falade, Emmanuel Oluwademilade Falade, Asad Ahmed Adow, and Anwar Ahmed Adow—six of whom, according a U.S. Attorney’s Office spokesperson, are members of Minnesota’s Somali community. Thompson made clear that this is just the first round of charges for HSS fraud that his office will be prosecuting.
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