Federal agents are now going door to door at businesses across Minnesota as part of a sweeping fraud crackdown, a dramatic escalation that has put Democratic Gov. Tim Walz under intense scrutiny for allegedly allowing years of abuse of taxpayer-funded programs to continue unchecked.
The U.S. Department of Homeland Security confirmed Monday that its investigators are visiting what it calls “suspected fraud sites,” signaling a tougher enforcement posture amid mounting evidence of widespread fraud tied to childcare and Medicaid-related programs, highlighted by the viral video by independent journalist Nick Shirley.
Videos posted by U.S. Department of Homeland Security show agents knocking on doors at multiple locations in Burnsville, including a smoke shop and a business listed online as a learning center. State records show the learning center holds an active license but has a history of violations, a detail critics say underscores long-standing failures in state oversight.
In one post, Homeland Security declared its agents were “going DOOR TO DOOR at suspected fraud sites,” adding that taxpayers deserve answers and arrests, when abuse is uncovered. Homeland Security Secretary Kristi Noem echoed the message, saying federal investigators are on the ground in Minneapolis conducting a “massive investigation” into childcare and other forms of fraud.
State officials acknowledge the problem is far from isolated. The Minnesota Department of Children, Youth and Families says it currently has 55 open investigations tied to the Child Care Assistance Program. One of the facilities visited by federal agents had told regulators it was closing earlier this month, only to reverse course days later, raising further questions about enforcement gaps.
The federal push follows comments from FBI Director Kash Patel, who said the bureau’s investigation into Minnesota fraud is ongoing. Patel pointed to dozens of indictments and convictions already secured in Medicaid fraud cases and warned those prosecutions represent “just the tip of the iceberg.”
Walz’s administration has pushed back, saying the governor has worked for years to combat fraud by seeking more authority from lawmakers, launching investigations, hiring outside auditors, shutting down the Housing Stabilization Services program, appointing a statewide program integrity director, and supporting criminal prosecutions.
Critics argue those actions came far too late, and only after federal authorities intervened. Earlier this month, the U.S. Attorney’s Office in Minnesota suggested fraud affecting 14 Medicaid programs since 2018 could total $9 billion or more, a staggering estimate that has fueled accusations that state leaders knowingly looked the other way. The Walz administration disputes that figure, saying there is no evidence fraud reached that scale.
The fallout is now spilling across state lines. In Maine, the Gateway Community Services scandal has become national news, drawing renewed attention to alleged nonprofit and Medicaid-related fraud and raising concerns that similar oversight failures may be widespread. The aggressive federal response in Minnesota is expected to bring added scrutiny to Maine, where critics say warning signs were ignored for years.
Despite the growing national attention, Maine Gov. Janet Mills has not publicly commented on the Gateway Communities scandal, even as funding has been cut, employees furloughed, and questions about state oversight continue to mount.
With federal agents now canvassing Minnesota and eyes turning sharply toward Maine pressure is building on Democratic governors across the region, as investigators and the public alike demand answers about how long alleged fraud was allowed to flourish before Washington stepped in.
