Minnesota Approved 364 New Care-Facility Licenses This Year — More Than One a Day. “We Have Not Slowed Down,” Its Own Fraud Watchdog Says.
In 2022, the Feeding Our Future case introduced most of the country to the phrase “Minnesota Medicaid fraud” — a roughly $250 million child-nutrition scheme that ended in dozens of convictions and a 41-year sentence for its ringleader. Four years later, that case is old news. The problem it exposed is not.
Minnesota’s Department of Human Services has issued 364 new provisional assisted-living-facility licenses in the past year — more than one for every day on the calendar — against a statewide base of roughly 2,500 licensed facilities. Bill Glahn, a policy fellow at the Center of the American Experiment who has tracked this beat since January 2022, is now calling for a 90-day moratorium on new licenses. His warning came less than two weeks after Minnesota’s attorney general charged two Twin Cities Medicaid providers with a combined 17 felony theft counts — one of them tied, according to the charging complaint, to a Hennepin County sex-trafficking operation.
None of this is closed history. The federal government is still withholding $259 million in Medicaid payments pending a fraud-remediation plan. Minnesota’s top human-services job has changed hands twice this year. And nearly a year after federal prosecutors put a number on the fraud, three competing estimates — $217.7 million, $9 billion-plus, and $19 billion — still cannot agree on how big the hole actually is.
- 364new provisional assisted-living-facility licenses MN DHS issued in the past year — more than one a day, against ~2,500 licensed statewide — Fox News, Aug. 29, 2026
- 17combined felony theft counts against two Twin Cities Medicaid providers charged the same day, Aug. 17, 2026 — MN AG Keith Ellison (D)
- $259,000,000in federal Medicaid funds Washington is withholding from Minnesota pending a 60-day fraud-remediation showing
- 70days Shireen Gandhi held the permanent DHS commissioner title before being demoted; deputy John Connolly is now acting commissioner
- $217,700,000–$19,000,000,000the spread separating the Star Tribune's documented tally from the U.S. Attorney's extrapolation and President Trump (R)'s public claim
Governor: Tim Walz (D) — in office since Jan. 2019, re-elected 2022. Presided over the Minnesota DHS through the entire fraud window; whistleblower complaints reviewed by House Oversight date to 2019-2020, early in his first term.
Attorney General: Keith Ellison (D) — in office since Jan. 2019, re-elected 2022. His Medicaid Fraud Control Unit filed the Aug. 17, 2026 charges against Elmi and Rashid.
DHS Commissioner (demoted): Shireen Gandhi — named permanent commissioner in 2026, demoted to deputy commissioner roughly 70 days later, a day before a scheduled confirmation hearing.
Acting DHS Commissioner: John Connolly — the state’s Medicaid director, now serving as temporary/acting commissioner.
Legislature: DFL trifecta control of both chambers and the governorship 2023-24, when several of the programs now under federal scrutiny were expanded. Oversight now runs partly through Rep. Kristin Robbins (R-MN), who chairs the state House’s fraud-prevention committee.
The number that anchors this story is not a fraud total — it is a licensing count. Minnesota’s own database shows 364 new provisional assisted-living-facility licenses issued in the past twelve months, against a statewide total of roughly 2,500 licensed facilities. That works out to more than one new facility approved every single day, 365 days a year, in a sector federal and state investigators have already identified as a fraud vector.
Bill Glahn wants that pipeline stopped, at least temporarily. He is calling on the state to impose a 90-day moratorium on new provisional licenses while regulators catch up. His case is not theoretical: on Aug. 17, 2026, Attorney General Ellison’s Medicaid Fraud Control Unit charged Salman Ahmed Elmi, 30, with 8 felony theft counts tied to his company, Reva Health, alleging more than $1 million in fraudulent billing. The same complaint drew a connection Glahn flagged publicly: one of the properties involved has alleged ties to a Hennepin County sex-trafficking operation — meaning commercial sex operations allegedly ran inside a state-licensed, Medicaid-funded assisted-living facility. The same day, prosecutors charged Mohamed Haji Rashid with 9 felony theft counts tied to Liberty Home Health Care, alleging more than $300,000 in fraudulent billing. Both men are presumed innocent; neither has been convicted.
“We have not slowed down, there is no sense in which the fraud has been stopped in Minnesota.”
Bill Glahn · Center of the American Experiment · Fox News, Aug. 29, 2026
Ellison, for his part, framed the charges as evidence the system is working:
“Medicaid fraud steals money meant to provide healthcare to our low-income friends and neighbors. It is illegal and it makes my blood boil, which is why I'm filing these charges and why I've built a strong record of holding fraudsters accountable.”
Attorney General Keith Ellison (D-MN) · Aug. 17, 2026
Brothels to Medicaid fraud. Award-winning entrepreneur Salman Ahmed Elmi, age 30, has been charged with 8 felony counts of Medicaid fraud in conjunction with a major Hennepin County sex trafficking case.
If a moratorium requires a regulator willing to enforce it, Minnesota’s Department of Human Services has had a hard time keeping one in the chair. Shireen Gandhi was named permanent DHS commissioner in 2026 — and was demoted to deputy commissioner roughly 70 days later, the shake-up announced a day before she was scheduled to face a confirmation hearing. Deputy commissioner and state Medicaid director John Connolly now holds the job on a temporary, acting basis.
Gandhi herself, before the demotion, could not put a firm number on the fraud she was tasked with stopping:
“So there has been about $300 million that has been documented. I don't know what the number is, but every dollar counts and we are going after it.”
Shireen Gandhi · then-DHS Commissioner · CBS News Minnesota
For Glahn, the leadership churn is the diagnosis, not a footnote to it. Two commissioners in a year is what an agency looks like when no one at the top is actually accountable for results.
“Personnel is policy. There isn't a regulatory mindset under the Walz administration.”
Bill Glahn · Center of the American Experiment
Washington has not waited for Minnesota to sort out its own leadership. The federal government is currently withholding $259,000,000 in Medicaid funds from the state, conditioned on Minnesota showing, within a 60-day window, that it has actually tightened fraud controls. As of this writing that showing has not resolved the hold — it remains an open, active standoff between a Democratic-run state government and a federal payer that says it is no longer willing to write checks on the honor system.
Vice President JD Vance has gone further, framing the standoff as a matter for federal law enforcement rather than just federal accounting:
I've referred these allegations to DOJ's new Fraud Division for criminal investigation. Minnesota state officials are not above the law, and if they facilitated fraud, lied under oath about what they knew, or harassed and intimidated whistleblowers, they must face justice.
Here is the accountability question nobody in Minnesota has actually answered: how much money was stolen? The Star Tribune’s own tally — built by counting court records, criminal charges, and convictions — totals $217,700,000. First Assistant U.S. Attorney Joseph Thompson, on Dec. 18, 2025, put the number far higher: “half or more” of the roughly $18 billion billed since 2018 across 14 flagged Medicaid programs was, in his office’s estimate, most likely stolen — a figure north of $9,000,000,000. President Trump has separately claimed the total runs as high as $19,000,000,000.
The gap between those three numbers is not a rounding error — it is the story. One is a documented floor built from adjudicated cases. One is a prosecutor’s extrapolation from billing patterns, not an audit finding. One is a political claim with no cited methodology. Years into the largest state-level Medicaid fraud crisis in the country, no single office — state or federal — has produced a reconciled figure that the others accept.
Minnesota has not been idle on paper. In May 2026, the legislature passed a bill creating a state Office of Inspector General — though the Bureau of Criminal Apprehension will handle fraud investigations for a full year before that office formally opens. The same session imposed new licensure requirements on autism (EIDBI) providers, with a provisional-licensing deadline of May 31, 2026. Both moves followed a Legislative Auditor finding, back in January 2026, that DHS already had the authority to investigate EIDBI fraud and simply did not use it.
Glahn’s critique is that process fixes are not the same as an accountability fix. A new office and a new licensure form change who fills out paperwork; they do not, by themselves, change who gets fired when the paperwork was fraudulent in the first place.
“Walz has never cleaned house, he's never fired anybody for not detecting the fraud.”
Bill Glahn · Center of the American Experiment
Congress has already staked out its own position. On March 4, 2026, the U.S. House Oversight Committee, chaired by Rep. James Comer (R-KY), held a hearing at which the committee concluded that Walz and Ellison “lied about their knowledge of the fraud and silenced whistleblowers.” Rep. Mariannette Miller-Meeks (R-IA) has since introduced a federal response with a pointed name — the Welfare Abuse and Laundering Zillions Act, or the “WALZ Act” — which would require HHS’s Inspector General to automatically investigate any program that sees a 10 percent or larger payment spike within six months, closing the exact kind of blind spot Minnesota’s autism program exploited on its way from $1 million to $220 million in annual billing.
Minnesota is licensing more than one new assisted-living facility a day, and one of the newest ones just landed in a criminal complaint alongside an alleged sex-trafficking operation. Its human-services agency has changed leadership twice in a year. Washington is still withholding $259,000,000 until the state proves it has fixed what let this happen. And the state, the federal government, and the president cannot agree whether the theft totals $217,700,000, $9,000,000,000, or $19,000,000,000. Elmi and Rashid are charged, not convicted, and are presumed innocent. The licensing pace, the leadership churn, and the missing reconciled number are not allegations — they are the documented record, under Gov. Tim Walz (D).
Last updated August 29, 2026