Entitlement Fraud Costs Taxpayers Billions … Or Trillions, Dwarfing Minnesota

By Mark Stricherz | The Center Square

(Worthy News) – Since 2020, fraudsters have scammed at least $36 billion and as much as $3 trillion in tax money from federal entitlement programs, dwarfing the amount federal prosecutors claim was stolen in Minnesota’s federal food aid scandal known as Feeding Our Future, an investigation by The Center Square found.

The Center Square reviewed all the statements about entitlement fraud cases issued by the U.S. Department of Justice from 2020 to last year, which did not include many of the cases prosecuted by U.S. Attorney’s offices in the various districts and any state prosecutions.

Public safety net programs such as Social Security, Medicare, and Medicaid lost billions of dollars to scams each year, according to a review of 2,500 DOJ statements, press releases, and fact sheets. The amount ranged from $2.7 billion in 2022 to $14.5 billion in 2025.

Fraud experts said, if anything, the $36 billion figure is too low.

“The number doesn’t surprise me,” said Linda Miller, president and co-founder of the Program Integrity Alliance, an independent 501(c)(3) nonprofit, nonpartisan organization that seeks to strengthen government integrity through data, evidence, and public-sector innovation. “That’s fraud that has been identified and investigated, so it represents a fraction of the actual fraud that has occurred or is occurring. Fraud is deceptive, and most agencies lack the tools to proactively prevent it, meaning the actual amount of fraud is much higher.”

Entitlement fraud has been in the news since November when the Manhattan Institute published an article about mostly Somali residents indicted for defrauding at least $250 million in federal food aid programs with allegations that some of the money went to fund terrorists in al-Shabaab.

Matt Weidinger, a senior fellow at the conservative-leaning American Enterprise Institute, said in an interview that “(w)hatever the fraud that has been uncovered (in Minnesota) is doubtless a fraction of the fraud occurring nationwide.”

He cited a 2024 U.S. Government Accountability Office report concluding that, based on data from 2018 to 2022, the federal government is defrauded of $233 billion to $521 billion annually. While the report examined federal spending overall, Weidinger noted that “entitlement programs constitute the bulk of federal spending and presumably fraud, too.”

The public assistance that suffered the most from the fraud was Medicare and Medicaid, according to a review of Justice Department announcements. In the first half of last year alone, the agency announced that it had identified and investigated approximately $14 billion in fraud in the two federal health care programs, as well as Tricare, the health care program primarily for active-duty military, retirees, and their families.

The figure is more than twice the $6 billion in fraud to federal health programs that the Justice Department identified in September 2020.

The U.S. Sentencing Commission, an independent federal judicial body, concluded that from 2020 to 2024, health care fraud offenses increased by nearly 20 percent. The figures exclude improper payments, an unintentional form of government losses.

Fraud prosecutions around the U.S.

While government officials and experts agree that fraud in Minnesota is substantial, the $250 million figure found in the indictments would barely rank among the ten largest alleged scams from 2020 to last year. Since the Feeding Our Future scandal was announced on September 21, 2022, six other alleged frauds have been larger, with some having nearly as many defendants.

Last month alone, the Justice Department announced two developments in scams centered in Maricopa County, Arizona.

On Dec. 22, Gary Cox, CEO of Power Mobility Doctor Rx, was sentenced to fifteen years in prison and forced to pay $452 million in restitution for defrauding Medicare of $1 billion. According to the Justice Department, Cox and 78 co-conspirators targeted hundreds of thousands of Medicare beneficiaries and convinced them to sign up for medically unneeded pain creams and orthotic braces through misleading mailers, television ads and from offshore call centers.

On Dec. 12, Alexandra Gehrke and her husband, Jeffrey King, agreed to pay $309 million in restitution for defrauding Medicare, Medicaid and Tricare of $900 million from 2022 to 2024. Known as the “glam-flam couple,” they administered unnecessary wound grafts that were ordered because of illegal kickbacks and applied to elderly and terminally ill patients. Each has been sentenced to more than a dozen years behind bars.

Earlier, two medical professionals were convicted of defrauding federal medical entitlement programs.

On March 6, Dehshid Nourian, a Texas pharmacist, forfeited $405 million in assets for defrauding and laundering money from federal workers. According to the Justice Department, Nourian and two other men defrauded the Department of Labor through the submission of fraudulent claims for prescription compound creams to injured federal workers. He was sentenced to 17 years and six months in prison.

In September 2021, Dr. Francisco Patino of Wayne County, Michigan, was convicted of submitting more than $250 million of false and fraudulent claims submitted to Medicaid, Medicare, and other health insurance programs.

According to the Justice Department, Patino excessively prescribed highly addictive opioids to his patients at his medical clinic in Livonia, prescriptions that forced his patients to receive lucrative spinal injections. If patients refused, Patino would take away their opioid prescriptions, prosecutors alleged. While another 21 defendants were sentenced in the conspiracy, Patino received the stiffest sentence—16.5 years in prison.

In December 2022, Minal Patel of Atlanta, owner of LabSolutions LLC, was convicted of defrauding Medicare of $463 million. According to the Justice Department, Patel conspired with patient brokers, telemedicine companies, and call centers to target Medicare beneficiaries with calls falsely stating that Medicare covered expensive cancer genetic tests. In August 2023, Patel was sentenced to 27 years in prison.

In September 2022, Biogen Inc., a Cambridge, Mass-based biopharmaceutical firm, reached a $900 million settlement for defrauding Medicare and Medicaid. According to a whistleblower’s complaint, from January 2009 to March 2014 Biogen gave speaker honoraria, training fees, consulting fees and meals to medical professionals who spoke or attended the company’s programs to convince them to prescribe three of its drugs to treat multiple sclerosis. Biogen denied the accusations, but said it settled the case to focus on its business pursuits.

As large as those entitlement frauds were, even they scratch the surface of the nearly 300 cases the Justice Department announced from 2020 to last year. Most were announcements of convictions, guilty pleas, and sentencing. They involved not only doctors and medical firms, but also universities, hospitals, corporations, bookkeepers, accountants and state agencies.

Fraud experts reject the notion that scams are the natural byproduct of government contracts and oversight.

In a 2023 article, Miller wrote that cabinet officials and agency leaders should be held responsible for the fraud under their watch.

“Fraud is unfortunately not an issue many agency leaders prioritize,” she said in an interview, “and the number of programs that have scaled up their preventative tools and capabilities is woefully small.”

Feds crack down in MN

On Dec. 18, Joe Thompson, then the acting U.S. Attorney for Minnesota, said scam artists have defrauded the state’s fourteen Medicaid programs of more than $9 billion. Governor Tim Walz, a Democrat, disputes the figure, though in October he announced that the state would delay fourteen Medicaid payments run by the state’s Department of Human Services.

Since the fall, the Trump administration has seized on entitlement fraud in Minnesota, a state where Democrats occupy all the statewide elected offices and hold a narrow majority in the state senate. On Sept. 21, 2022, the Justice Department announced it indicted 47 defendants for committing $250 million of alleged fraud in a federally funded child nutrition program run by the nonprofit organization Feeding Our Future.

Minnesota’s office of the legislative auditor released two detailed reports on fraud, on the federal-state childcare assistance program in 2019, and two federal food aid programs in 2024, both of which found fault with state agencies failing to detect scams earlier. Yet the chicanery did not become national news until this fall.

On Nov. 19, an article by the Manhattan Institute alleged that the defendants, nearly all of whom were Somali, were sending some of the stolen entitlement money to Al Shabaab, an Islamic terrorist group fighting the government in a decades-long civil war in one of the poorest countries on earth. Two days later, President Trump announced on TruthSocial that he was terminating temporary protected status for Somalis in Minnesota, a designation given to them because the Horn of Africa nation suffered from not only civil war but also famine.

The think tank’s accusations of diversions of the money to terrorists have not been proven, but the scandal hit a fever pitch after conservative populist influencer Nick Shirley on Dec. 26 posted a YouTube video of Somali-run daycare centers in Minnesota devoid of children. The video received more than 100 million views.

On Jan. 5, the Trump administration froze federal subsidies for childcare, social services, and cash support for poor families in five states, all controlled by Democrats, including Minnesota.

On Jan. 8, Vice President J.D. Vance announced the administration would create a new assistant attorney general for fraud detection — a position based in the White House.

While the job, which will be subject to U.S. Senate confirmation, was national in scope, Vance said the official will “focus primarily” on Minnesota’s fraud scandals.

Copyright 1999-2026 Worthy News. This article was originally published on Worthy News and was reproduced with permission.

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