In a stunning escalation of the growing Medicaid fraud scandal engulfing Minnesota, Centers for Medicare & Medicaid Services (CMS) Director Dr. Mehmet Oz announced on X that the federal government is preparing to pull the plug on Minnesota’s Medicaid funding unless Gov. Tim Walz immediately clamps down on what Oz called “the most staggering case of Medicaid fraud ever uncovered.”
The warning is unprecedented: CMS is formally threatening to withhold billions in federal dollars from a blue state that has allowed more than **$1 billion** in taxpayer funds to be siphoned off—largely through schemes run by fraud rings inside Minnesota’s Somali migrant community. The allegations are severe enough that Oz suggested Walz and his administration may need to be investigated for dereliction of duty.
Dr. Oz opened his statement by making it clear that CMS staff were shocked by the scope of the corruption.
“You’ve probably heard the news by now: Minnesota fraudsters stole over $1 billion from Medicaid,” he wrote. “Our staff at CMS told me they’ve never seen anything like this in Medicaid — and everyone from Gov. Tim Walz on down needs to be investigated, because they’ve been asleep at the wheel.”
He then laid out the scope of the grift: Minnesota dramatically expanded several Medicaid-funded programs, including Housing Stabilization Services—meant to help disabled homeless residents—and Early Intensive Developmental and Behavioral Intervention, which funds therapy for autistic children.
Both programs ballooned beyond recognition once Somali-operated “providers” gained access.
– The housing program, expected to cost **$2.6 million**, exploded to over **$100 million** last year.
– The autism program, a modest $3 million in 2018, surged to nearly **$400 million** in 2023.
According to CMS investigators, much of this money wasn’t spent on services at all.
“These scammers used stolen taxpayer money to buy flashy cars, purchase overseas real estate, and offer kickbacks to parents who enrolled their kids at fake autism treatment centers,” Oz said. “Some of it may have even made its way to the Somalian terrorist group Al-Shebab.”
Dr. Oz didn’t mince words about why Gov. Walz refused to act.
“Why didn’t Walz stop them? Because he went all-in on identity politics,” Oz wrote, citing a Somali-American fraud investigator who told *The New York Times* that state officials feared “political backlash” from the massive Somali voting bloc. “Somali scammers get rich off the programs Gov. Walz was supposed to be managing. Minnesota politicians get elected with Somali votes and keep the money flowing.”
CMS now says the fraud became so catastrophic that it had no choice but to intervene. Oz confirmed that the agency already shut down the most abused program and froze enrollment for several others, but that Minnesota continues to drag its feet.
Oz then outlined strict federal requirements that Minnesota must meet immediately:
1. **Weekly updates** to CMS on fraud prevention progress.
2. A **full freeze** on new high-risk provider enrollments for six months.
3. Verification of **every existing provider** or removal from the system.
4. A complete **corrective action plan** to prevent future fraud.
The big hammer comes next.
“If we’re unsatisfied with the state’s plans or cooperation, we’ll stop paying the federal share of these programs,” Oz warned. “Fix this in 60 days or start looking under your couch for spare change, because we’re done footing the bill for your incompetence.”
His closing message was blunt: CMS will not allow Minnesota to continue using Medicaid as a political slush fund or a welfare pipeline for fraud rings.
“With CMS on the case, these scammers and their bureaucratic enablers have nowhere left to hide,” Oz said. “The vulnerable Americans who depend on these programs — and the taxpayers who fund them — deserve the truth.”
The political implications for Tim Walz—already under scrutiny for supporting Minnesota’s sprawling sanctuary infrastructure—could be catastrophic. Federal investigators are circling, Democrats are panicking, and the worst fraud scandal in the state’s history is now a national crisis.
