Minnesota will feel an “increasing vise grip of financial penalties” to help make up for taxpayer dollars lost to fraud, Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Service, said Jan. 6.

His agency is auditing all 14 Medicaid programs that Minnesota flagged as vulnerable to fraud; that excludes 73 other Medicaid programs Minnesota runs.

The agency also will “claw back that money” from current Medicaid payments that were to be made to Minnesota, Oz told Fox News.

“This is a major problem for the state, because they’ve got to own the fact that they have been bilking the federal taxpayer [because of] their sloppy behavior for years,” Oz said.

The Epoch Times sent a message to Gov. Tim Walz’s office seeking comment but received no immediate reply.

During a news conference earlier in the day, Walz said he would refuse to step down from the governorship amid the fraud scandals, although he announced Jan. 5 that he was abandoning his reelection bid. His current term in office expires in January 2027.

The governor also criticized President Donald Trump for clamping down on Somalis. Amid increasing concerns over Somalis being accused of defrauding government programs, the president recently halted a deportation protection that had been afforded to Somali refugees for decades and also ramped up federal scrutiny.

A large percentage of Minnesota fraud defendants charged so far are of Somali descent, federal prosecutors have said.

“Somali immigrants who are minding their own business” are facing unfair federal actions, such as Immigration and Customs Enforcement operations, Walz said. More than 2,000 federal agents from the Department of Homeland Security have surged to Minnesota as fraud concerns have swelled.

In addition, the federal government has cut off payments to child care centers in Minnesota and is requiring additional verification of children being served.

Oz said his agency has had difficulty tracking at least $500 million in Medicaid payments to Minnesota. Available data makes it hard to figure out how it was billed and “where it went,” he said.

Officials asked Walz to provide a “corrective action plan” by the end of 2025, but the Walz administration responded late—on New Year’s Eve—with a plan that Oz called “insufficient.” As a result, the federal government is clamping down on Minnesota Medicaid payments, he said.

President Trump doesn’t want taxpayers across the nation footing the bill for Minnesota’s roughly 6 million residents, Oz said.

Officials see signs that government-program fraud or misuse may be higher in California than it is in Minnesota, Oz said, but he gave no figures. California, home to about 39 million people, is six and a half times more populous than Minnesota.

In the North Star State, an attitude known as “‘Minnesota Nice’ made it easy for them to make out like bandits,” Oz said. Minnesota has a longstanding tradition of providing generous social benefits without asking many questions, as The Epoch Times reported previously. That attitude—which may have made the state more susceptible to fraudsters—appears to reflect values of the Scandinavian immigrants who settled in Minnesota.

Beyond the burgeoning fraud scandals, Oz raised an additional concern arising from use of Medicaid. He recently learned that, under federal law, “if you sign someone up for Medicaid, you also give them the right to vote.”

“So, you’re building up a very partisan group of individuals. This is political patronage at the expense of Medicaid,” he said. “The criminal part here is not just a horrible waste and fraud and abuse of our federal ... tax dollars, but you’re taking money from our most vulnerable citizens.”

“If you’re lying about the fact that you have Somalian kids pretending to be autistic, that takes services away from kids who truly have autism. ... You’re penalizing our most vulnerable,” he said.

That’s why the Trump administration “will not tolerate this,” Oz said. “We’re aggressively going after this fraud.”

Federal prosecutors have charged dozens of people, mostly Somalis, with defrauding programs intended to feed meals to children, provide children with therapy for autism, and provide affordable housing to the elderly and disabled. Dozens of defendants have already been convicted, and prosecutors expect additional suspects to be charged in those schemes and possibly others. Generally, the fraudsters filled out bogus paperwork, claiming to provide services that were never rendered, prosecutors said, then reaped payments for those services through federal programs.

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