Despite significant attention and billions in taxpayer losses, Minnesota has not adequately addressed its massive fraud scandal, particularly concerning the rapid expansion of provisional assisted-living licenses, according to Bill Glahn, a policy fellow at the Center of the American Experiment. Glahn warns that the state's oversight has not kept pace with the issuance of new licenses, with more than one facility approved daily.
"We have not slowed down, there is no sense in which the fraud has been stopped in Minnesota," Glahn stated in an interview. He noted that approximately 20% of the roughly 2,500 licensed facilities across the state have been established in the past year. Glahn has called for a 90-day moratorium on new licenses to allow for thorough investigation.
Recent developments highlight the ongoing nature of the problem. The Minnesota Attorney General's office charged Salman Ahmed Elmi on August 17 with eight felony theft offenses for alleged Medicaid billing fraud. The criminal complaint also detailed alleged connections between Elmi's businesses, properties previously used for commercial sex services, and individuals investigators believe were part of a sex-trafficking organization.
"This is two scandals in one," Glahn commented on the Elmi case. "You have a commercial sex operation, actual brothels, housed in what were later licensed as assisted-living facilities under the Medicaid program." He emphasized that Elmi's case, which occurred only months prior, demonstrates the scandal is far from resolved.
Glahn contends that the issues point to a deeper problem within state agencies responsible for vetting providers and monitoring taxpayer-funded programs. He criticized the current administration's approach, stating, "There isn’t a regulatory mindset under the Walz administration. There isn’t the mindset that we need to trust but verify."
While acknowledging some fraud-prevention steps taken by Minnesota officials since the scandal gained national attention, Glahn stressed that these reforms do not address the core issue of accountability for those who failed to detect or prosecute the schemes earlier. He pointed out that Governor Tim Walz has not dismissed any officials for their handling of the fraud.
"Walz has never cleaned house, he’s never fired anybody for not detecting the fraud or not prosecuting the fraud," Glahn said. "It’s the same people doing the same thing, and that culture has never changed." He added that Governor Walz appears to have little interest in resolving the issue, noting Walz's travel and campaigning while the scandal persists.
Lt. Governor Peggy Flanagan is currently running for Senate, and Senator Amy Klobuchar is campaigning for governor, both having held positions of power during the period the fraud scandal developed. Glahn questioned why proposed anti-fraud measures, such as those advocated by Klobuchar, are not implemented immediately, suggesting a special legislative session could address these issues.
In response to the ongoing concerns, the Minnesota Department of Human Services stated that it has implemented several anti-fraud reforms since the fall of 2024. These include identifying 14 high-risk services and freezing enrollment for new providers in those areas, discontinuing the Housing Stabilization Services program, and initiating on-site audits for autism-service providers. The department also reported stopping payments to 747 Medicaid providers since the beginning of 2025 due to credible allegations of fraud and making 824 referrals to law enforcement.