“The Largest Funder of Al-Shabaab Is the Minnesota Taxpayer”How some of the state’s welfare funds ended up in the hands of a terror group

Minnesota is facing a sprawling series of fraud scandals that critics say have flourished under Governor Tim Walz’s administration, costing taxpayers billions. Observers accuse state agencies of lax oversight within an expansive welfare system and fault local media for downplaying the extent of the problem. Numerous defendants in recent cases are members of Minnesota’s Somali community—an uncomfortable fact highlighted by federal officials and former investigators interviewed for the report. Some law-enforcement sources claim that portions of the stolen funds were ultimately sent abroad through informal money-transfer networks and, in some cases, ended up benefiting the extremist group Al-Shabaab, regardless of the intent of the senders.

One of the most troubled programs is the Medicaid Housing Stabilization Services (HSS) benefit, designed to help vulnerable residents secure housing with minimal administrative barriers. Although the program was originally projected to cost just $2.6 million a year, its spending exploded: $21 million in 2021, then $42 million, $74 million, and $104 million in later years, with $61 million paid out in the first half of 2025 alone. State officials eventually terminated payments to 77 providers, citing “credible allegations of fraud,” and Acting U.S. Attorney Joe Thompson declared that the majority of the program’s activity was fraudulent.

In September, Thompson announced indictments against eight men—six of them Somali Minnesotans—for allegedly creating sham companies to bill Medicaid for nonexistent housing services. He described many of the businesses as hollow operations running from decrepit storefronts and said they frequently enrolled people exiting rehab programs without providing real assistance. Thompson portrayed the state’s Medicaid system as riddled with overlapping fraud schemes spanning mental-health services, disability programs, personal care assistance, and autism treatment.

That same day, federal prosecutors revealed that a defendant named Abdullahe Nur Jesow had become the 56th person to plead guilty in the Feeding Our Future case, a massive pandemic-era food-aid scheme. Feeding Our Future, which had distributed $3.4 million in federal nutrition funds in 2019, expanded rapidly after COVID-19 hit, allegedly fabricating meal counts and attendance records to obtain nearly $200 million in 2021 alone. According to former state officials, many of the affiliated meal sites were Somali-owned. Prosecutors say the money financed luxury spending and international real-estate purchases. When state officials raised concerns, the nonprofit accused them of racial bias, a move critics say discouraged scrutiny. Individuals linked to the organization also cultivated ties with prominent Democratic politicians, including Congresswoman Ilhan Omar and Minneapolis Mayor Jacob Frey.

Days later, prosecutors filed charges in yet another case—this time involving a $14 million autism-services scheme. Asha Farhan Hassan, who also faces charges in the Feeding Our Future affair, allegedly helped recruit Somali parents into therapy programs regardless of diagnosis, facilitating fraudulent assessments and paying families monthly kickbacks ranging from a few hundred dollars to $1,500 per child. Autism-related Medicaid spending in Minnesota skyrocketed from $3 million in 2018 to nearly $400 million in 2023, with the number of providers increasing from 41 to 328. Many of the new clinics were Somali-run, and by the time the scheme was uncovered, one in 16 Somali four-year-olds in Minnesota carried an autism diagnosis—over triple the statewide rate.

Thompson said that the housing, food-aid, and autism cases form a “web” of interconnected fraud rings that together have siphoned billions of dollars from taxpayers. While he avoided making broad generalizations, many of the defendants identified in these cases are Somali Minnesotans, a pattern noted by multiple former officials who say the issue has long been politically sensitive.

Several retired investigators claim that large sums from these fraud networks were routed overseas through hawalas, informal money-transfer systems used widely in Somalia. Former Joint Terrorism Task Force detective Glenn Kerns described tracing millions of dollars moving from U.S. cities—including Minneapolis—to Somali hawalas, which he says often operate in areas controlled by Al-Shabaab. Because the group extracts fees or taxes on economic activity inside its territory, he argued that some portion of Minnesota’s diverted welfare money ultimately benefited the extremist organization, whether intentionally or not. Another former federal official echoed this view, saying that nearly all remittances sent into certain regions of Somalia end up funding Al-Shabaab to some degree.

These concerns follow earlier cases in which Minnesotans attempted to join ISIS. A federal report a decade ago found that Minnesota accounted for nearly half of all U.S. ISIS recruits at the time. Some of those men, according to journalists who covered their trials, used welfare programs adeptly while appearing outwardly assimilated.

With a growing list of high-profile fraud cases, the issue is expected to dominate Minnesota’s 2026 gubernatorial race. Governor Walz, running for a third term, faces Republican challenger Kristin Robbins, who has made fraud prevention a central theme. Former state senator David Gaither predicts that more revelations are coming and that investigators and insiders believe the public has seen only a fraction of the overall misconduct.

The report concludes that Minnesota cannot meaningfully address its fraud crisis unless its political and media institutions acknowledge the full scope of the problem—including the significant role played by certain individuals within the Somali community—while avoiding sweeping assumptions about the community as a whole.

Source: CITY JOURNAL