Podcast Summary: Newt’s World – Episode 920

Minnesota’s Billion-Dollar Fraud Scheme
Host: Newt Gingrich
Guest: Ryan Thorpe (Investigative Reporter, Manhattan Institute)
Date: December 11, 2025

Episode Overview

This episode explores the intricate details of a massive fraud scandal involving nearly a billion dollars lost through Minnesota’s social services programs. Newt Gingrich interviews investigative reporter Ryan Thorpe, who co-authored a major exposé on the topic, illuminating what may be one of the largest corruption stories in recent American history. The conversation focuses on how the schemes operated, their political and social implications, the failure of oversight, and the hard questions they raise for state and federal authorities.

Key Discussion Points & Insights

1. Unfolding the Minnesota Fraud Scheme

• Scope and Operation:

  • The fraud began with "Feeding Our Future," a nonprofit meant to feed children during COVID-19 school shutdowns. The organization partnered with local businesses to set up feeding sites, but:

    “The only problem was kids weren’t actually being fed by these sites, but the state was being billed as if they were… owners… reimbursed… were actually spending the money on luxury cars, houses and real estate projects overseas.”
    — Newt Gingrich [04:16]

  • Additional programs involved included Housing Stabilization Services and a therapy program for autistic children, all exploited for fraudulent billing.
  • The schemes were so extensive that Minnesota paused 14 other social service programs to audit for fraud.

• Scale: The amount stolen is nearing $1 billion just for Minneapolis.

  “…You would think at a billion, it should be nationwide, but it’s not.” — Newt Gingrich [05:18]

2. How the Fraud Was Exposed

• Investigative Process:

  • Thorpe and his co-author Chris Rufo started with DOJ press releases about indictments, building timelines and uncovering patterns.

  • “I simply went back over the past five years… and pretty quickly I was able to establish a timeline in terms of charges…”
    — Ryan Thorpe [07:10]

  • Major media outlets and state officials were slow or reluctant to engage, often sidestepping the issue due to sensitive community ties.

• Whistleblowers & Law Enforcement:

  • Aggressive efforts by the U.S. Attorney’s Office were essential to uncovering the fraud—without which “it would have been much easier for the establishment to ignore this.” — Ryan Thorpe [08:13]

3. Community, Politics, and Media Blind Spots

• Concentration in Somali Community:

  • The fraud rings were heavily concentrated in the state's Somali community.
  • Thorpe points out the near-taboo in discussing this aspect:

    “…this was an inconvenient fact that no one was either able or willing to confront.” — Ryan Thorpe [06:23]

• Political Shielding & Racial Accusations:

  • Allegations of racism and lawsuits were used as a shield when investigations began.

    “And even now with the publication of our piece in City Journal, we’ve gotten attacks by people saying, well, this is racism... If it’s true, then we need to confront the facts as they are…” — Ryan Thorpe [09:16]

• Political Connections:

  • Key Somali figures in city and state politics had ties to those indicted.

  • “…several individuals who were involved and indicted had donated to Ilhan Omar or appeared with her publicly… they really have established significant political connections…” — Ryan Thorpe [24:26]

4. Scheme Details and Notable Examples

• Feeding Our Future:

  • Over 250 nutrition sites established; 78 people charged, 50 convicted or pleaded guilty; “sophisticated coordinated network” extracting millions via shell companies and doctored paperwork. — [10:11]

• Autism Therapy Scam:

  • Providers recruited children from the Somali community, falsely certified them for treatment, and paid parents kickbacks.

  • “…if the kickbacks weren’t high enough, they said, ‘there’s so many fraudulent autism providers in the smaller community, if you don’t pay me more, I’m going to pull my kid from your fake program, take them over to another fraudulent fake program, and they’ll give me more money.’” — Ryan Thorpe [11:29]

• Housing Stabilization Services:

  • Program structure included “loose criteria,” low barriers for reimbursements, and minimal oversight.

  • “They specifically designed it to have very loose criteria… minimal requirements in terms of how they get money released to them…” — Ryan Thorpe [21:21]

5. Systemic & National Implications

• Comparisons to Other Public Sector Abuse:

  • Newt draws parallels to school spending in Baltimore and identity theft fraud in California, suggesting a broader systemic problem nationwide:

    “…bureaucratic big government socialism simply has a massive propensity towards corruption…” — Newt Gingrich [33:45]

  • On the appearance-vs-reality of government services:

    “…hungry children aren’t actually getting fed. But look, on paper, it’s thousands that are getting fed, and we’re spending all this money, so of course we’re accomplishing something.” — Ryan Thorpe [35:45]

• Barriers to Auditing & Money Tracking:

  • The use of informal hawala money transfer networks means much of the cash flow to Somalia—and in some cases, to the terrorist group Al Shabaab—cannot be properly traced by investigators.

    “…these are, in some sense, you know, dark money networks. It becomes very difficult to trace exactly where these funds are going.” — Ryan Thorpe [32:23]

• Failures of State Oversight:

  • Hundreds of state employees reportedly tried to blow the whistle but faced retaliation or dismissal.

  • “…what they allege is that we’ve been trying to clean up the fraud and to expose the fraud internally… but political officials have been turning a blind eye and also retaliating against them.” — Ryan Thorpe [18:23]

6. Lessons, Policy Implications & The Path Forward

• Need for Policy Reform:

  • More than just legal prosecution is needed; policy changes and better controls are essential to stem repeat abuse.

    “There is so much fraud that… there needs to be change on the policy side… not just expect law enforcement to clean it all up after the fact.” — Ryan Thorpe [20:13]

• Broader Investigations Warranted:

  • Minnesota may be just the tip of the iceberg; similar schemes could be present in other states and programs.

    “It’s highly unlikely that’s the only state in the union that is dealing with a problem like this…” — Ryan Thorpe [36:53]

• Call for Federal Oversight & Analysis:

  • Gingrich suggests a nationwide forensic audit of federal funding in social programs.

Notable Quotes & Memorable Moments

• On systemic failure:

  “If someone is motivated and has a little bit of know-how, it doesn’t appear to be that difficult to walk away with hundreds of millions of stolen tax dollars because it keeps cropping up in that state.”
  — Ryan Thorpe [12:42]

• On media and political avoidance:

  “…the mainstream press corps was just simply… turning a blind eye to this massive issue.”
  — Ryan Thorpe [08:23]

• On consequences for the vulnerable:

  “When you steal money for autism services, that means actual autistic children are not getting support.”
  — Ryan Thorpe [23:24]

• Policy challenge:

  “We do need to kind of go back to the drawing board from a policy standpoint and try to come up with a solution of that nature. Because… our hands are somewhat tied on this issue.”
  — Ryan Thorpe [33:00]

• The fraud’s broader impact:

  “Essentially, you have three things. You have money being taken away from the taxpayers, children and other people who should be getting money not getting it, and the growth of a sort of gray economy of people who are really good at stealing.”
  — Newt Gingrich [23:44]

Timestamps for Key Segments

| Timestamp | Segment / Topic | |-------------|-----------------------------------------------------------------------------| | 02:41 | Newt introduces the Minnesota fraud story and guest Ryan Thorpe | | 04:00–05:55 | Overview of the fraud’s origin & scope (Feeding Our Future, housing, autism) | | 06:55–08:57 | How Thorpe and Rufo uncovered the story; lack of mainstream coverage | | 09:16–10:45 | Use of racism allegations to deflect investigations; scope of convictions | | 10:45–11:56 | Details of competitive autism fraud scheme | | 12:42 | National comparison: California and general underestimation of fraud | | 16:34–17:56 | Explosive growth of fraudulent programs & COVID-19’s effect | | 18:23–19:58 | Whistleblowers and retaliation | | 20:13–22:56 | Policy leadership & structural vulnerabilities to fraud | | 24:26–26:03 | Somali community’s demographic/political impact in Minnesota | | 29:13–32:48 | Discussion of link to money transfers and terrorism (Al Shabaab) | | 33:45–36:19 | Parallels to national corruption in education and other sectors | | 36:53–39:18 | Thorpe on later steps: more unanswered questions and national pattern |

Conclusion – Final Remarks

• Thorpe and Rufo’s reporting has brought national attention to one of the largest fraud cases in American social services history—one which exposes weaknesses in oversight, whistleblower protection, and community integration policies.
• Gingrich highlights the urgent need for a broad, forensic audit of government spending and the development of new laws to address money tracking via informal networks.
• The conversation ends with both men acknowledging the importance of serious, transparent investigative reporting in preventing public sector corruption.

For more details:
Read Thorpe and Rufo’s article, “The Largest Funder of Al Shabaab is the Minnesota Taxpayer” at City Journal (city-journal.org).