An investigation by the Manhattan Institute alleges that Minnesota taxpayer-funded programs were exploited in large-scale fraud schemes, with millions of stolen dollars routed through hawala networks to Somalia and ultimately reaching the terror group al-Shabaab, according to federal counterterrorism sources.
Minnesota’s Department of Human Services shut down the Medicaid Housing Stabilization Services (HSS) program after uncovering widespread fraud. Federal prosecutors have since announced multiple indictments connected to HSS, the Feeding Our Future scandal, and an alleged autism-services fraud ring.
Officials report dozens of defendants across the overlapping schemes, including several individuals from Minnesota’s Somali community, with numerous guilty pleas already entered.
The DX Brief
- HSS payouts surged from an estimated $2.6M to $21M in year one; $61M in first half of 2025
- 77 providers terminated for “credible allegations of fraud”; the program shut down Aug. 1
- Feeding Our Future received almost $200M in 2021; 77 defendants charged to date
- U.S. Attorney’s Office announced new indictments and guilty pleas across HSS, Feeding Our Future, and autism-services cases
- Federal sources say millions were sent via hawalas to Somalia, reaching al-Shabaab
- Minnesota legislator called for further investigation following the report
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