Minnesota just got caught red-handed letting over $19 billion vanish into thin air through welfare scams, fake daycare centers, and bogus autism therapy clinics.
The same guy who was governor while all that happened now wants to hand out another $10 million in "forgivable loans" to businesses.
Tim Walz announced Thursday he's launching an emergency relief package for small businesses hurt by Trump's immigration crackdown – and Republicans immediately called it his next fraud scheme.
Tom Emmer Calls Walz $10 Million Plan New Fraud Avenue After Operation Metro Surge Ends
Walz rolled out his plan after Border Czar Tom Homan announced Operation Metro Surge was wrapping up in the Twin Cities.
The proposal hands out forgivable loans from $2,500 to $25,000 to businesses that can show "substantial revenue loss" during Trump's enforcement operation.
Businesses just need to "demonstrate" they lost money during "specified dates" tied to the raids.
No independent audits required upfront.
House Majority Whip Tom Emmer torched the plan on X: "BREAKING: Tim Walz opens up a new avenue for fraud in Minnesota."
Minnesota Republican state Sen. Michael Holmstrom went even harder: "Immediate NO from me. Minnesota taxpayers do not deserve to have more money stolen from them."
Rep. Eli Crane from Arizona asked the question everyone's thinking: "Does that include learing centers?" – referencing the infamous Quality Learning Center that YouTuber Nick Shirley exposed as a fake daycare collecting public funds while zero kids showed up.
Minnesota Fraud Scandal Pattern: Feeding Our Future to Daycare Schemes
Here's what makes Republicans furious.
Federal prosecutors charged 92 people in connection with welfare fraud schemes totaling hundreds of millions stolen from food assistance, autism services, and housing programs.
Feeding Our Future alone siphoned $250 million meant for feeding hungry kids.
The scheme worked because nonprofits submitted fake meal counts and invoices, collected administrative fees, and kicked back cash to fake meal sites – while zero children got fed.
Federal investigators identified 14 high-risk Minnesota programs where providers billed for services never delivered.
Prosecutors estimated more than half of $18 billion spent across these programs since 2018 was fraudulent.
Trump previously claimed Minnesota's total fraud exceeded $19 billion.
Asha Hassan pleaded guilty in December to defrauding Minnesota's autism program – she hired unqualified "technicians," submitted fake claims showing they worked with kids, and paid parents kickbacks up to $1,500 to enroll children who never received services.
She also ran a fraudulent food distribution site through Feeding Our Future.
The Quality Learning Center became the poster child for daycare fraud after Shirley's viral video showed empty buildings collecting taxpayer funds while claiming to care for children who didn't exist.
Chairman James Comer's House Oversight Committee held hearings in January where Minnesota whistleblowers testified that Walz knew about the fraud for years but failed to intervene.
State Representative Robbins confirmed whistleblower reports showed "backdating and falsification" and that Minnesota's Department of Human Services would "allow providers to submit records far after the investigation and just accept them as true."
Comer demanded accountability: "We want to catch these people. We want to put them behind bars, and we would hold any politician that participated in these schemes accountable."
Why Walz Small Business Relief Mirrors $19 Billion Welfare Fraud Pattern
Walz's new proposal follows the exact same pattern that enabled the fraud crisis.
Money distributed based on applicant claims without upfront verification.
Forgivable loans that become free money.
No requirement for independent audits before payments.
Federal prosecutors and government watchdogs identified this structure as "an invitation to fraudsters" when analyzing pandemic relief fraud.
The Government Accountability Office found organized fraud groups exploited self-certification programs – they inflated employee numbers, created fake companies, and stole over $300 billion from pandemic relief programs nationwide.
SBA Inspector General estimated $136 billion in fraud from disaster loans and $64 billion from PPP – programs that relied on applicants self-certifying their losses were real.
Minnesota state auditors concluded in 2024 that Walz's Department of Education "failed to act on warning signs" during Feeding Our Future and could have legally intervened to stop payments.
Walz is repeating the playbook that failed catastrophically.
The Minnesota Department of Human Services is so overwhelmed they're recruiting 150 temporary employees just to perform unannounced site visits at 5,800 providers in high-risk programs.
Walz Demands Trump Pay After ICE Operation Metro Surge Arrests 4,000
Walz told reporters Thursday that Trump must "pay for what they broke" after the administration drew down federal enforcement in the Twin Cities.
He claimed the operation caused "deep damage" and "generational trauma."
Translation: Walz is angry Trump arrested the criminals who were stealing Minnesota taxpayer money.
During Operation Metro Surge, ICE arrested 4,000 people including violent illegal immigrants – murderers and child rapists that Minneapolis Mayor Jacob Frey and Walz refused to hand over despite 1,360 ICE detainers.
South Dakota Governor Kristi Noem hammered Walz and Frey for ignoring those detainers – letting convicted criminals stay on Minnesota streets instead of deporting them.
Border Czar Homan made clear: "If we need to come back, we'll come back."
Walz's relief package includes a statement from Henry Garnica, owner of CentroMex in East St. Paul, saying the past months were "some of the hardest I've experienced as a business owner" with sales down and limited hours.
But Republicans point out the obvious problem.
How does Minnesota verify Garnica actually lost revenue because of Trump's enforcement rather than normal business fluctuations?
How does the state prevent fake businesses from submitting fraudulent loss claims?
How does Walz ensure the money doesn't end up in the same criminal networks that stole $19 billion?
He can't answer those questions.
Sources:
- Michael Sinkewicz, "Walz proposes $10M business relief package as Republicans cry 'new avenue for fraud' in Minnesota," Fox News, February 13, 2026.
- "Everything we know about Minnesota's massive fraud schemes," CBS News, January 5, 2026.
- "An overview of the sprawling fraud scandal that's upended Minnesota," Axios, January 6, 2026.
- "Hearing Wrap Up: Minnesota Governor Walz and Attorney General Ellison Ignored Rampant Taxpayer Fraud," House Committee on Oversight and Government Reform, January 7, 2026.
- "Fraud and Its Consequences – Who Steals from Federal Programs and What's the Cost?" U.S. Government Accountability Office, 2025.
- "Biggest fraud in a generation: The looting of the Covid relief program known as PPP," NBC News, March 29, 2022.