A former Minnesota state trooper turned fraud investigator dropped a whistleblowing bombshell at the state capitol Tuesday that blew a hole straight through Democratic Gov. Tim Walz’s “tough on fraud” lies.
Jay Swanson, a 30-year veteran of the Minnesota State Patrol who later served as manager of the Department of Human Services’ child care fraud investigation unit, told the Minnesota Oversight Committee that his Democratic bosses pressured him to bury his unit’s fraud investigation findings.
When he refused, they destroyed the unit entirely.
Swanson said DHS created his Child Care Provider Investigations Unit in 2014, staffing it with veteran investigators to root out rampant fraud in the state’s Child Care Assistance Program centered in Minnesota’s Somali community. For several years, the unit operated with support. Then the pressure started from Walz’ office, Swanson claimed.
“Support from upper management dropped off a cliff, and it seemed at that point, their only goal was to destroy the unit and drive our people out of there,” he said.
The breaking point came in 2018, when a senior DHS official showed up in Swanson’s office and ordered him to delete several paragraphs from a report on fraud he was submitting to the Office of the Legislative Auditor, he said in his testimony.
“I soon had a senior DHS official in my office, angry, red-faced and almost yelling,” Swanson said. “The senior DHS official told me to delete a number of paragraphs of the document I had sent. I then advised the official that I believed what they were telling me to do was illegal.”
Swanson said he was told, “You better be ready for the sh**storm that’s coming your way.”
After he said he refused to delete the paragraphs, he claims his unit was stripped of the authority to conduct criminal investigations. In 2019, it was shut down entirely.
What he said his unit had uncovered was staggering. Swanson said his fraud investigators found that as many as 72 of the top 100 recipients of state child care money bore significant fraud markers. His team estimated the fraud rate in the program was as high as 50% of all disbursements — at the time, roughly $217 million annually. DHS disputed the figure and said there was no evidence to support it.
Swanson also revealed that Minnesota’s reputation as a fraud haven had spread to Somalia. During interviews with owners and employees of child care centers under investigation, he learned that it was common knowledge in Somali refugee camps in Kenya that Minnesota was an easy place to commit massive fraud… with no consequences.
“They had heard you could run the scam in a number of different states, but it was easiest and you could make the most money doing it in Minnesota,” Swanson said.
The testimony came the same day the FBI and Homeland Security Investigations executed search warrants at 22 businesses across the Twin Cities, including day care facilities and autism clinics as part of ongoing Medicaid fraud investigations.
Walz, who dropped his reelection bid in January after the fraud scandal consumed his governorship, tried to take credit for the federal raids. FBI Director Kash Patel wasn’t having it.
“This FBI and DOJ with our DHS partners drafted and executed every search warrant today,” Patel fired back on social media. “But go ahead and take credit for our work while we smoke out the fraud plaguing Minnesota under your governorship.”
Federal prosecutors estimate the total fraud in Minnesota’s social services programs under Walz could top $9 billion.
The House Oversight Committee, led by Chairman James Comer (R-KY), has been investigating the scandal since December and says whistleblowers have alleged that DHS employees destroyed evidence and withheld records to cover it up.
“Gov. Tim Walz, Attorney General Keith Ellison, and Minnesota’s Democrat leadership have either been asleep at the wheel or complicit in these crimes,” Comer said. “We must expose this theft of taxpayer dollars and hold everybody accountable who let it happen.”