A former Minnesota state trooper alleged this week that his bosses at the state Department of Human Services tried to bully him into quashing his findings of fraud in the state’s child care funding program.
Jay Swanson, a former criminal investigator for the DHS, also revealed that it was well known among Somali refugees in East Africa that Minnesota was the best place to go in the US to pull off child care fraud schemes.
And then, Gov. Tim Walz came into office — and Swanson’s entire department investigating waste, fraud and abuse was eliminated, according to Republican lawmakers.
The allegations, which came out Tuesday at a hearing for the Minnesota House Fraud Prevention and State Agency Oversight Policy Committee, contradict Walz’s new “tough on fraud” stance after the FBI raided multiple daycares in the state.
The failed Democratic vice presidential candidate claimed that the federal investigations were the result of the state reporting fraud — an assertion that Trump administration officials said was laughable.
On the same day as the raid, Swanson delivered bombshell testimony at the state capitol, alleging that he was once ordered by his bosses to delete some of his findings of fraud in response to an inquiry from the Minnesota Legislature.
The request, he said, was a violation of law.
Swanson’s duties included interviewing owners and employees of the child care centers under investigation and said he learned that it was common knowledge among Somali refugees in camps in Kenya that Minnesota was the best place to operate a scam.
“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,” he said.
Not long after that 2017 investigation, the feds started looking into another child care center where they found “a high amount of billing fraud” — Salama Child Care Center — which was located at 1411 Nicolett Ave. in Minneapolis, the same address as the infamous “Quality Learing Center.”
That misspelled daycare center was raided by the FBI this week — and now appears to be shut down. Made
The owner of Salama Child Care Center was indicted that same year, and in 2018 pleaded guilty in federal court and was sentenced to two years in prison and ordered to pay $1.4 million in restitution.
As Swanson’s state investigation picked up steam, the Minnesota Legislature directed the Office of the Legislative Auditor (OLA) — which is tasked with looking into state programs — to conduct a “special review” of the Child Care Assistance Program (CCAP), he said.
In August of 2018, as Swanson was responding to questions posed to him by the legislative investigators, he said a DHS official instructed him to submit his answers directly to them instead of the auditing agency.
After he sent his answers to his bosses for approval, a state DHS official barged into his office “angry, red-faced, and almost yelling” and told him to retract much of what he had said about fraud.
“I then advised this official that I believed what they were telling me to do was illegal,” Swanson said in his bombshell testimony.
Here’s the latest on the Minnesota fraud scheme:
- DOJ surging prosecutors to Minnesota to bring fraudsters to justice – Bondi vows ‘severe consequences’ for those convicted
- Somali ambassador to UN is linked to shady health care company in Medicaid fraud scandal: HHS official
- Tim Walz abruptly drops out of Minnesota governor’s race in wake of billion-dollar fraud scandal
- Somali fraudsters got luxury digs, beachside resort, rented Rolls Royce and Lamborghini with stolen funds
Days later, the same official returned, claiming he had just come from the commissioner’s office and that they were sending his document to the legislative investigators, but warned him “you better be ready for the s–t storm that’s coming your way.”
In the following months, Swanson testified, “members of our unit were harassed and bullied by DHS officials” in a variety of ways, as they sought to undermine their findings at every turn.
The undermining campaign included DHS forking over $90,000 to hire a consulting firm — which Swanson noted had “no experience in public benefit program integrity or financial fraud investigations” — to claim that the “fraud allegations in my email as unreliable or unable to be proven.”
Republican lawmakers have said that when Walz came into office in 2019, the following year, the same tactics of suppressing the fraud allegations continued apace.
Critics said Walz’s administration was responsible for shutting down key investigations and harassing whistleblowers attempting to uncover the scammers.
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“There was an Office of Inspector General within [Minnesota’s Department of Human Services] that had investigative authority to do surveillance warrants and seize electronics, and they were shut down,” Republican state Rep. Kristin Robbins, who is running for governor, said during the hearing.
“They were told they could no longer do criminal investigations. They were told they could no longer meet with the Bureau of Criminal Apprehension agents that were assigned to them without supervisors’ approval.”
She said that a committee appointed by Walz scuttled that oversight.
Walz dropped his reelection bid earlier this year amid the growing scandal, which assistant US Attorney Joe Thompson estimated could amount to over $9 billion in theft from taxpayers by fraudsters.
President Trump suggested it could be as high as $19 billion.
Since 2022, the Justice Department has charged 98 people, 85 of whom are of Somali descent, and 64 of whom have been convicted.
Robbins said the widespread welfare fraud in Minnesota dates back to at least 2009.
Despite efforts by state agencies to suppress investigators’ findings under his watch, after this week’s FBI raids on nearly two-dozen day care centers and other businesses in the state, Walz — who previously dismissed the allegations as “white supremacy” — put out a tough-talking statement on X as if he had been behind the efforts to root out fraud all along.
“If you commit fraud in Minnesota you’re going to get caught — and that’s exactly what we saw today. We catch criminals when state and federal agencies share information. Joint investigations work, and securing justice depends on it,” he wrote.
FBI Director Kash Patel and newly appointed Department of Homeland Security chief Markwayne Mullin both seized on the post to call out Walz for his hypocrisy.
“Come again? This FBI and DOJ with our DHS partners drafted and executed every search warrant today. But go ahead and take credit for our work while we smoke out the fraud plaguing Minnesota under your governorship,” Patel fired back.
Mullin, meanwhile, blasted Walz as having “zero credibility” on the issue.
The Post reached out to Walz’s office for comment Wednesday.
