How the Minneapolis fraud scandal exposes a national failure to protect America's safety-net programs.

The fraud scandals unfolding in Minneapolis are shocking only if you haven’t been paying attention. 

“See how Minnesota fraudsters spent millions earmarked for hungry kids,” reported Jonah Kaplan for CBS News on December 11: “Luxury cars, private villas and overseas wire transfers: CBS News obtained dozens of files and photos that reveal how Minnesota fraudsters blew through hundreds of millions in taxpayer dollars as part of one of the biggest COVID-era fraud schemes.”

“The files document a spending spree in which defendants, many of Somali descent, took taxpayer money meant to feed hungry children and used it to buy cars, property and jewelry,” explained Kaplan. “Videos show them popping champagne at an opulent Maldives resort.”

It’s the same old story: Fake nonprofits. Phantom services. Millions — sometimes hundreds of millions — of taxpayer dollars siphoned off in broad daylight. These newest details are lurid and infuriating, but the underlying story is depressingly familiar. What we are witnessing in Minnesota is not an isolated moral failure. It is a stress fracture in a national system that has been quietly hemorrhaging money for years.

Fraudsters have a name for America’s largest safety-net programs, especially Medicare: the bank without a lock.

That phrase isn’t hyperbole. Medicare alone loses tens of billions of dollars annually to fraud, waste, and abuse. Some estimates push the number far higher. Criminal enterprises — many sophisticated, transnational, and deeply organized — have learned how to game the system with remarkable efficiency. They bill for services never rendered. They steal patient identities. They create shell providers, run claims through automated systems, and disappear before regulators catch on. And too often, regulators don’t catch on at all.

Minneapolis just happens to be the latest place where the curtain has been pulled back.

The political temptation is to localize the scandal: blame weak oversight at the city or state level, point fingers at individual actors, promise better “guardrails.” That’s comforting — and incomplete. The truth is that America’s safety-net architecture was designed for speed and scale, not skepticism. Programs meant to get help to people quickly are structurally vulnerable to those who see compassion as an arbitrage opportunity.

This vulnerability is not ideological. It doesn’t belong to the left or the right. It belongs to bureaucratic systems that reward volume over verification and paperwork over outcomes.

Medicare, Medicaid, pandemic relief funds, nutrition programs, housing assistance — the pattern repeats. Once criminals learn the rules, they exploit them ruthlessly. Once enforcement lags, word spreads. Once accountability weakens, entire ecosystems of fraud take root. By the time authorities react, the money is gone and the public trust goes with it.

And that loss of trust matters. Every fraud scandal doesn’t just drain the treasury; it poisons public support for programs that millions of honest Americans rely on. Taxpayers grow cynical. Beneficiaries are viewed with suspicion. Legitimate providers face heavier compliance burdens because criminals treated the system like an ATM.

The Minneapolis scandal is not an argument against the safety net. It is an argument against pretending that good intentions substitute for serious enforcement.

A functioning welfare state requires something unfashionable in modern politics: administrative competence. That means real audits, data-sharing across agencies, aggressive prosecution, and the political will to say no — even when saying no is uncomfortable. It also means acknowledging that fraud is not a rounding error. It is a business model.

If Medicare is a bank without a lock, criminals will keep robbing it. Not because Americans are uniquely corrupt, but because systems that advertise vulnerability eventually attract predators.

Minneapolis didn’t invent this problem. It merely exposed it. The question now is whether anyone in power is serious about fixing the door — or whether we’ll just act surprised again the next time the vault is emptied.

And while Minnesota Governor Tim Walz definitely has some explaining to do as to how his state became a major hub of safety-net, the widespread problem of fraud continues to plague U.S. safety net systems.

Unchecked.

(Contributing writer, Brooke Bell)