Seven States Just Agreed to Stop Fighting Fraud Alone. The First Round Found $350 Million.
For years, a fraudster caught draining a benefits program in one state could simply move to the next one, where nobody was checking. On July 30, 2026, the Justice Department’s new National Fraud Enforcement Division stood up in Columbia, South Carolina, with attorneys general and auditors from seven states and announced they were closing that gap — and had already found $350 million in alleged losses doing it.
This is not a partisan indictment of one party’s states. Six of the seven states in the new partnership are fully Republican-controlled. The seventh — North Carolina — sent its Democratic attorney general, who showed up and signed on anyway. The story here is about how badly the federal government and the states have been talking to each other, and what happened the moment they started.
- $350M total alleged losses across 17 cases the partnership has announced since forming — DOJ / Washington Examiner
- $1.1T flows annually through 20 state-administered federal programs; GAO found audit weaknesses in 18 of them — GAO-26-109100
- $1.6B in potential Medicaid/CHIP overpayments GAO traced to cross-state duplicate enrollment — the exact gap this data-sharing MOU targets — GAO-25-106976
State-administered federal programs — Medicaid, unemployment insurance, SNAP, child-care assistance — move more than $1.1 trillion a year, and the Government Accountability Office, in a review requested by House Oversight Chairman James Comer (R-KY) in March 2026 and published July 23, 2026 (GAO-26-109100), found “severe and persistent” audit weaknesses in 18 of the 20 programs it reviewed. A separate GAO review found roughly $1.6 billion in potential Medicaid and CHIP overpayments tied specifically to people enrolled in more than one state at once — a problem no single state can catch on its own, because no state was required to check.
The fix started small. Ohio became the pilot state for a new data-sharing MOU model in June 2026, pairing DOJ’s fraud attorneys with the state auditor, treasurer, and secretary of state. It worked well enough that the Southeast rollout followed less than two months later.
Assistant Attorney General Colin McDonald, who leads DOJ’s National Fraud Enforcement Division, led the roundtable at the National Advocacy Center. Ten state agencies across six states signed the underlying data-sharing memorandum; officials from a seventh, North Carolina, joined the broader task-force framework. “Defeating the fraud epidemic in our country requires all-hands-on-deck from our federal and state partners,” McDonald said. “Every fraud case prevents bread from going to the table of a needy family, or health care from going to the elderly, or a child from receiving the education that they deserve.”
South Carolina’s AG Alan Wilson (R) hosted, unveiling “Operation Border War” — a roughly $20–21 million Medicaid fraud scheme, the largest in state history, in which prosecutors say a ring stole the personal information of severely disabled children to bill for services never rendered. “The majority, nearly all of these, were severely disabled children,” Wilson said, “billing for services that these minor, severely disabled children never received.” Gov. Henry McMaster (R-SC) called it “a nationwide operation that’s going to be pushed by the Department of Justice.”
The roster: Alabama’s AG Steve Marshall (R), Georgia’s AG Chris Carr (R), Louisiana’s AG Liz Murrill (R), Mississippi’s AG Lynn Fitch (R), South Carolina’s Wilson, and Florida’s AG James Uthmeier (R), who separately stood up his own Public Assistance Fraud Task Force this year. Mississippi also secured a $2.5 million DOJ grant — the first of its kind — to fund a new “Joint Task Force Vigilance,” with Secretary of State Michael Watson (R), Auditor Shad White (R), and Treasurer David McRae (R) all signing on. “Fraudsters do not care about state lines,” McRae said.
North Carolina is the exception to the party pattern, and it’s worth naming plainly: AG Jeff Jackson (D-NC) and State Auditor Dave Boliek (R) both sent delegations. Jackson, whose Medicaid Investigations Division secured a $1.7 million guilty plea from a Guilford County clinic owner on July 10, was unambiguous about joining a Trump-DOJ-led effort: “This is what a united front looks like. The acceptable level of fraud is zero.”
“This is what a united front looks like. The acceptable level of fraud is zero, and as these fraudsters become more sophisticated, we have to step up our enforcement actions, use new tools, and work across jurisdictions to take them down.”
Jeff Jackson (D-NC) · North Carolina Attorney General · July 30, 2026
The regional total breaks down into cases with names and defendants, not just a headline number. Twelve defendants charged since July 4 account for roughly $90 million of it. South Carolina’s Operation Border War is $20–21 million; a separate SC Medicare-forgery case against a Vital Care employee, alleging more than 100 forged physician certification forms, is $1.8 million. Mississippi charged a former SBA employee and a former IRS employee in an $11.5 million kickback scheme. Louisiana is pursuing a $1.5 million charter-school embezzlement case. Every defendant named here has been charged, not convicted, and is entitled to the presumption of innocence — except the Guilford County clinic owner, who has already pleaded guilty.
The Columbia announcement sits inside a larger federal push. Vice President JD Vance, who chairs the White House Task Force to Eliminate Fraud, cited a national total of $230 billion in identified fraud and $56 billion already halted at a separate Cabinet meeting the same week — a related but distinct figure, not something announced at the Southeast event itself.
Not every state has joined this kind of effort. In May 2026, 23 Democratic state attorneys general boycotted a separate White House anti-fraud roundtable chaired by Vice President Vance, citing late notice and concerns about HHS Medicaid-oversight staffing cuts. That boycott and the July 30 Southeast partnership are two different events on two different tracks — but the contrast between a bipartisan-adjacent regional partnership seven states just joined, and a national roundtable two dozen states skipped, is its own story.
$1.6 billion in Medicaid overpayments traced to people enrolled in more than one state at once is the kind of fraud that only exists because states weren’t comparing notes. Seven states just started. The first round turned up $350 million and a $20 million scheme built on stolen disabled children’s identities. The open question is whether the other 43 states join before the next GAO audit finds the same $1.6 billion gap again.
