HUD Moves In as Minnesota Welfare Fraud Probe Expands

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Minneapolis–St. Paul, Minnesota — The Department of Housing and Urban Development has dispatched federal employees to Minnesota to review federally funded housing and aid programs following the discovery of a large-scale welfare fraud scheme tied to the Twin Cities region.

A HUD spokesperson confirmed that the agency has joined other federal bodies, including Immigration and Customs Enforcement, in conducting on-the-ground oversight in Minneapolis and St. Paul. The review focuses on ensuring HUD-funded programs are being administered properly after what officials described as “rampant fraud” affecting state and federal social services.

According to HUD, staff from the department’s Washington headquarters will also audit data from Minnesota’s public housing authorities. The Minneapolis Public Housing Authority administers roughly $108 million annually in housing choice vouchers and public housing assistance, while St. Paul manages about $46 million in similar programs.

The move follows revelations that approximately $1 billion in taxpayer funds were improperly obtained from Minnesota social service programs in recent years. The most prominent case involved Feeding Our Future, a nonprofit accused of falsely claiming it served millions of pandemic-era meals to children and receiving about $300 million in reimbursements. The Treasury Department has said it is examining whether any of the funds were diverted to al-Shabab, a U.S.-designated terrorist organization operating in Somalia.

HUD Secretary Scott Turner said the department has also cut certain housing-related funding connected to individuals holding Temporary Protected Status, arguing that immigration enforcement and housing affordability are linked. Minnesota Gov. Tim Walz has criticized the federal response, warning against stigmatizing entire communities amid ongoing investigations.

Federal officials say the review is ongoing and no new findings have yet been released.