A former state trooper who ran fraud investigations inside Minnesota's Department of Human Services told state lawmakers Tuesday that senior officials ordered him to delete findings, harassed his unit, and tried to shut down probes into what he now calls an organized criminal enterprise looting the state's public-benefit system. His testimony landed the same day federal agents raided more than 20 businesses in Minneapolis as part of a widening crackdown on suspected fraud in publicly funded childcare and nutrition programs.
Jay Swanson, who led a DHS fraud investigations unit from 2014 to 2018, appeared before the Minnesota House Fraud Prevention and State Agency Oversight Policy Committee with a blunt account of institutional failure. He described a pattern in which investigators flagged large-scale fraud in the Child Care Assistance Program, only to be met with hostility from the very officials who should have acted on the evidence.
The twin developments, sworn testimony about a cover-up nearly a decade old and a major federal enforcement operation on the same day, mark a dramatic escalation in a scandal that has already drawn scrutiny to Governor Tim Walz's oversight of the state's anti-fraud apparatus. First Assistant U.S. Attorney Joe Thompson announced in December that federal authorities estimated fraud in Minnesota Medicaid programs may have cost taxpayers as much as $9 billion since 2018.
Swanson told the committee that his unit's work quickly put it on a collision course with DHS leadership. As the Daily Mail reported, Swanson said a senior DHS official confronted him directly over a document his team had prepared, and demanded that portions of it be removed.
"I soon had a senior DHS official in my office, angry, red-faced, and almost yelling. The senior DHS official told me to delete a number of paragraphs of the document. I then advised this official that I believed what they were telling me to do was illegal."
Swanson did not name the official in the quoted testimony. But he made clear the pressure was not an isolated incident. He described a broader campaign against his investigators that went beyond bureaucratic friction.
As Fox News reported, Swanson told the committee that DHS brought in a consultant, allegedly paid $90,000, to discredit his unit's findings. He characterized the effort in stark terms.
"Their only goal was to destroy our unit."
The former investigator also offered a broader assessment of what his team had uncovered, framing it as the beginning of something far larger than a few bad actors gaming a single program.
"As I look back with the benefit of 2020 hindsight, I realized that what our team saw was the early stages of a somewhat loosely organized criminal enterprise beginning to pillage Minnesota's public benefit system."
One of Swanson's most striking claims concerned how widely known Minnesota's vulnerability had become. He told lawmakers that suspects his unit investigated said they had first learned about the fraud opportunity while still living abroad.
As the New York Post reported, Swanson said investigators found it was common knowledge in Somali refugee camps in Kenya that Minnesota was the place to go.
"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."
That testimony aligns with separate sworn claims from another former DHS investigator, Scott Dexter. As Just the News reported, Dexter said his unit found evidence of large-scale fraud in the Child Care Assistance Program involving Somali-run daycare centers, but that investigations were narrowed or converted from law-enforcement cases to internal administrative matters because of political pressure and accusations of bias.
"Because of the pressure that they were getting from the Somali community, a lot of our investigations were shut down or they made it more difficult for us to investigate," Dexter said.
A 2019 Minnesota legislative auditor report found that DHS fraud controls in the childcare assistance program were insufficient and pointed to a significant fraud problem, institutional confirmation that the warnings Swanson and Dexter describe were not imaginary.
Minnesota already holds the distinction of producing the largest pandemic-era nutrition fraud case in the country. The nonprofit Feeding Our Future received $244 million from federal nutrition programs to feed low-income children and senior citizens between 2018 and 2021. Prosecutors found the organization had been funneling those funds to personal use. Over 63 individuals connected to Feeding Our Future were convicted on fraudulent charges.
That case exploded during the pandemic, when the U.S. Department of Agriculture waived some regulations for nutrition programs, loosening the very guardrails that might have caught the scheme earlier. The scale of the Feeding Our Future fraud became a political liability for Walz, who was Kamala Harris's running mate in 2024. Republicans accused him of allowing widespread fraud to flourish on his watch.
Walz has taken steps to address the allegations. He created a new centralized fraud investigation unit last January. But Swanson's testimony suggests the rot began long before the pandemic, and that the state's own investigators were sidelined when they tried to sound the alarm.
Republican lawmakers have said the Office of Inspector General's investigative powers were shut down or curtailed after Walz took office, limiting the state's ability to pursue fraud probes. That claim, combined with Swanson's account of what happened to his unit years earlier, paints a picture of a state apparatus that repeatedly chose to look away.
Walz's performance under congressional questioning on the broader scandal has already drawn sharp criticism. His appearance at an oversight hearing on Minnesota's $9 billion Medicaid fraud scandal left many observers unimpressed with his answers.
On the same Tuesday that Swanson testified, federal agents executed search warrants at more than 20 businesses in Minneapolis. The raids targeted records and evidence connected to an investigation of publicly funded social programs for children. Fox News sources said around 22 businesses were raided, including the Quality Learning Center.
The Quality Learning Center had already become a flashpoint. Conservative YouTuber Nick Shirley shared a viral video last December accusing the daycare of receiving public funds without providing a legitimate service. The center denied the allegations at the time but closed in January pending a license review, the Minnesota Department of Human Services confirmed.
The federal operation involved the FBI and Department of Homeland Security, Newsmax reported, as part of a broader crackdown that has drawn increasing federal attention to Minnesota's oversight failures.
The Trump administration has framed the enforcement push as part of a larger effort to root out fraud in Minneapolis. Trump himself said Somalis were "completely taking over" Minnesota, and the administration has connected its immigration enforcement operations in the state to the fraud allegations.
The numbers alone tell a damning story. A $244 million nutrition fraud. A potential $9 billion Medicaid fraud estimate. Over 63 convictions in a single case. And now, a former state investigator telling lawmakers under oath that the people responsible for stopping the theft actively worked to suppress the evidence.
Swanson's testimony captures the frustration of investigators who watched it happen in real time.
"I can't tell you how shocked we were to come to the Department of Human Services and learn after a few years that not only was the theft of untold millions of dollars tolerated, but those who tried to stop it would be subjected to the wrath of high-ranking department officials."
The Daily Mail contacted Minnesota's DHS for comment. The extraction does not indicate a response was provided.
Minnesota's fraud scandals have unfolded against a broader political backdrop. The state's Democratic leadership has faced questions not only about financial oversight but about immigration enforcement and accountability more generally. Congressional action on welfare fraud and deportation has exposed deep partisan divides over how seriously to treat the problem.
Meanwhile, Minnesota's political culture has produced its own controversies around transparency and disclosure. Prominent state figures have faced pointed questions about financial disclosure gaps and the willingness of elected officials to answer for how public money is spent.
Several important details remain unclear. Swanson did not publicly name the senior DHS official he says ordered him to delete findings. The specific document at issue has not been identified in public testimony. And while federal agents seized records from more than 20 businesses Tuesday, no charges tied to those raids have been announced.
What is clear is that the warnings came years ago. Investigators flagged the fraud. They reported it up the chain. And the chain, by Swanson's account, tried to bury what it found.
When a state government spends more energy silencing its own fraud investigators than stopping the fraud, taxpayers aren't the only victims. Public trust is.