U.S. House committee holds hearing on Minnesota fraud crisis

[8:51] Good morning. Subcommittee will come to order. Without objection, the chair is authorized to [15:05] declare recess at any time. We welcome everybody to today's hearing, and I mean everybody who's [15:11] in here and everybody who will come in here is welcome to come in here and participate and watch [15:17] and participate orderly. But our hearing is on fraud and theft of taxpayer dollars. I now [15:22] recognize the gentlewoman from Florida, Ms. Lee, to lead us in the Pledge of Allegiance. [15:52] Thank you. I now recognize myself for an opening statement. Today's hearing will examine the [15:58] widespread and outrageous amount of fraud taking place in and around Minneapolis, Minnesota. [16:03] Minnesota has lost billions of dollars in state-administered and federally-funded programs [16:08] due to organized fraud. Fraud networks operating in Minnesota dating back more than a decade [16:13] have submitted over $9 billion, that's a billion with B, in false claims. Some high-profile cases [16:21] in Minnesota include organizations and programs such as Feeding Our Future, Early Intensive Developmental [16:27] and Behavioral Intervention, Housing Stabilization Services, and Integrated Community Supports. [16:33] Now we're going to watch a video. It's welfare fraud. It's all about the daycare. [16:50] They estimate as much as $100 million a year is being stolen by shady daycare center operators. [16:58] So how much money are we talking about stolen from the American taxpayer? Well in excess of a billion [17:03] dollars. Ripping off state-run programs intended to feed low-income kids, house the disabled, [17:09] and provide services to autistic children. Where are the children at? Do you know where [17:16] the children are at? Where are the children at in these daycare centers? Are the children here [17:21] today? No. No children? So this is Quality Leering Center. Hello, we'd like to ask where the money's [17:29] going. Attorney General Keith Ellison was focused on one thing and one thing only, and that was keeping [17:36] these folks in business. When do you think Governor Walz knew about this fraud? From the very beginning. [17:41] What happened here in Minnesota that allowed this fraud to materialize? The people at the highest [17:48] levels of responsibility in the government of the state of Minnesota looked the other way. [17:56] Fraud within these programs have involved false claims, fictitious providers, and services not [18:02] rendered, highlighting the need for stronger verification, monitoring, and enforcement to protect taxpayer [18:09] funds. These fraudulent actions have robbed taxpayer funds intended to feed children, support individuals [18:15] with autism, provide housing for low-income and disabled Americans, and deliver health care to [18:20] Medicaid recipients. Since 2021, the DOJ has charged 98 defendants in Minnesota-based fraud cases, 85 of whom [18:28] are of Somali descent. Of the 98 defendants, 64 have been convicted. DOJ has now undertaken extensive [18:37] investigative action which includes issuing over 1,750 subpoenas, executing more than 130 search [18:44] warrants, and conducting more than 1,000 witness interviews. Since the start of the Trump administration, [18:49] the federal response to fraud in Minnesota has intensified following a series of high-profile cases [18:55] involving state-administered, federally funded programs. One of the initial instances of high-profile fraud in the [19:01] state involved the nonprofit Feeding Our Future, which was at the center of a $250 million COVID-19 [19:08] related fraud scheme. As part of the scheme, fraudsters exploited Department of Agriculture USDA [19:14] food programs designed to provide meals for children. Federal prosecutors ultimately convicted 57 defendants [19:21] and described the scheme as the nation's largest COVID-era fraud. The issue gained renewed national [19:28] attention in late December 2025 following a widely shared YouTube video posted by one of our witnesses, [19:34] Mr. Nick Shirley. Mr. Shirley's work highlighted suspected fraud in Minnesota child care programs. [19:40] His reporting prompted federal authorities to intensify investigations, expand oversight, [19:45] and coordinate multi-agency enforcement efforts. A week ago today, Mr. Shirley released a second video that [19:51] documented alleged fraud in the transportation industry intended to provide rides for children, [19:56] the disabled, and the elderly. Mr. Shirley uncovered companies with questionable addresses [20:02] and vehicles intended to transport children, the disabled, and the elderly that remained idle for [20:07] extended periods of time. We look forward to hearing from Mr. Shirley about what he was able to uncover. [20:12] But how did we get here? Hopefully another witness, Scott Dexter, a former fraud investigator for [20:18] the Minnesota Department of Human Services, can shed some light on that for us. And I'd be remiss if I didn't [20:24] point out that this massive wave of fraudulent activity didn't just have the consequence of [20:28] ripping off taxpayers. It has drastically impacted legitimate organizations that are truly helping [20:33] their neighbors. Jennifer Larson is here today to share her story about how this massive fraud has [20:38] crippled her organization that serves autistic children. We'd like to think that these fraudsters will [20:44] one day face justice, but it appears that is not always the case. For example, Yasmin Ali, a daycare and home [20:51] health care owner charged with stealing millions from Minnesota taxpayers after being granted bail, [20:57] disappeared before a trial, and has not been located since. That was more than a decade ago. [21:03] The tentacles of this fraud ring are widespread and include crimes other than fraud. For example, [21:09] the aforementioned Yasmin Ali. Her brother, Adaris Abdullah Ali, pleaded guilty in 2009 to lying to [21:15] federal grand jury about his knowledge of a group of young Somali men in Minneapolis who traveled to [21:20] Somalia to fight with al-Shabaab, a foreign terrorist organization against the transitional federal [21:25] government of Somalia. We can also consider the fact that at least $700 million in U.S. cash [21:31] transported via passenger luggage through Minneapolis-St. Paul International Airport. The [21:36] incidents are all currently under federal investigation, with the majority carried by couriers [21:40] traveling to Somalia, other African nations, and the Middle East. While no definitive links to funding [21:46] terrorism have been established yet, we know that hundreds of millions of dollars in cash are being [21:51] transported to areas where foreign terrorist organizations are active. What could possibly [21:56] go wrong? A whistleblower is alleged that TSA personnel at MSP, Minneapolis-St. Paul International [22:02] Airport, repeatedly identified and flagged routine encounters with Somali men carrying large suitcases [22:08] filled with bundled cash often exceeding a million dollars. During an interview, a former TSA agent at MSP, [22:14] from 2016 to 2021, now a whistleblower, Liz Jackson noted that she saw, quote, suitcases packed with [22:21] millions of dollars in cash moving through MSP again and again, carried by the same type of couriers, [22:27] which raised questions that she feels law enforcement and political leaders still haven't answered, close [22:32] quote. Jackson further explained her repeated encounters with Somali men carrying suitcases packed with cash, [22:39] and in one case, a bag filled with new passports. According to Jackson, the volume, consistency, [22:45] and profile of the transactions she witnessed were well beyond ordinary or everyday behavior. Treasury [22:51] Secretary Scott Besant has noted that the department is currently investigating where Minnesota's taxpayer [22:56] dollars are being placed. Additional reports show that Somali individuals in the United States [23:01] send roughly $215 million abroad each year. On January 9th, Secretary Besant indicated [23:08] that the Treasury Department's Financial Crimes Enforcement Network, FinCEN, informed four money [23:13] transfer organizations that they're under investigation for their roles in the fraud scheme [23:17] involving the theft of funds from social services in Minnesota. He also indicated that some banks in [23:22] Minnesota are being investigated by the Internal Revenue Services Civil Enforcement Division for allegations [23:28] related to money laundering. As you can see, there's much to unpack surrounding these numerous fraud [23:32] schemes taking place in and around Minneapolis, Minnesota. I would be remiss if I didn't [23:39] suggest and urge additional investigation throughout this entire country. I know that in my home state of [23:46] Arizona, our Democrat Attorney General came in to office and quickly said that there'd been $2.5 million [23:54] dollars in fraud just in the Medicaid program alone. And in recent studies released over the last year in [24:01] Arizona, it's been suggested that as much as $7.2 billion dollars in fraud annually take place. [24:07] In Arizona's similar programs. So this is not just a Minnesota issue, but it just happens to be at the [24:14] forefront of why we're here today. I look forward to today's hearing and I thank the members and [24:19] witnesses for taking part. Now yield back and recognize the ranking member Ms. McBath for her opening statement. [24:25] Thank you, Mr. Chair, and thank you for convening this hearing this morning to talk about the harm that fraud [24:32] can cause. And thank you for everyone that is here this morning to testify. It's so necessary that we [24:38] continue to investigate and prosecute all forms of fraud, including government fraud, which can turn [24:45] many into victims. That is because a person committing fraud against a government program steals from all of [24:52] us as taxpayers and abuses the purpose, the initial purpose of these programs. They harm the organizations that [24:59] need these programs to operate, and most importantly, they harm the people that the program is designed [25:05] to help. Whether we're talking about a program that feeds school children, helps seniors find housing, [25:12] helps people overcome addiction, or provide services to address disabilities, it is critical that the [25:18] dollars that we invest in these programs actually serve the purposes that we have in mind when we, [25:25] the lawmakers created them. That's why the Department of Justice has always combated fraud, including [25:33] prosecuting dozens of people for for perpetrating fraudulent schemes in Minnesota in 2021 and under the [25:42] Biden administration. But prosecutions are not enough to combat or prevent fraud. So the Biden administration [25:49] also established a COVID-19 Fraud Enforcement Task Force and increased oversight of programs that were being [25:56] targeted by fraudsters. Minnesota lawmakers have also taken steps to reduce fraud in their state, [26:03] strengthening the state's ability to stop potential fraud sooner and improving investigations to hold [26:09] those scammers accountable. But President Trump has taken a very different approach to fraud. Just last week, [26:16] Trump added quite a few fraudsters to his growing list of people that he has pardoned, not because they are [26:22] deserving a second chance, but because they hired his friends, back channeled a donation or served his political purposes. [26:30] He has pardoned many people charged or convicted of fraud and other financial crimes, wiping away more than a billion dollars [26:39] in money that would otherwise have gone to victims of crime. President Trump has also fired inspectors general, [26:46] instructed his DOJ to stop enforcing bribery statutes and gutted the offices that investigate white collar crime. [26:54] That is how we know this hearing is not really about fraud. It is about trust. The Trump administration does not want you to [27:05] trust these programs because if you don't trust them, they're easier to destroy them. They do not want you to trust entire communities, because if you don't trust them, [27:15] they're easier to intimidate. But we cannot let that happen. We will continue to fight for robust and [27:23] responsible oversight and for the continuation of initiatives that make all of our communities safer, [27:30] healthier and more resilient. Across the country, there are daycares, schools, hospitals, treatment centers, [27:38] research facilities, nursing homes, fire departments, police departments, airports, [27:44] and more that all depend on state or federal funding, not just to help those in need, [27:50] but to serve every single one of us. President Trump succeeds in attempt to freeze child care funding across five states, [28:01] which is temporary temporarily blocked by a court order. The effects would ripple across families and businesses throughout our economy. [28:10] It would affect more than 500,000 children. And these are children that are not just within the state of Minnesota, [28:18] but 500,000 children, their parents, the businesses and organizations where those parents work, [28:24] and the many people who depend on those businesses to fulfill needs in those communities. That's the fallout from just one program, [28:35] addressing one need across only five states. If President Trump continues this assault on critical [28:42] programs, the harms could be far greater. These latest attacks come on top of the cuts that President [28:49] Trump and congressional Republicans already forced through, which are taking health care from 10 million [28:56] Americans and reducing food assistance to over 40 million Americans, including many, many children. We don't have [29:04] to choose between programs that are susceptible to fraud and nothing at all. With proper oversight, [29:13] we can make sure that every American is fed, that everyone can access housing and medical treatment, [29:21] and that our daycares and our schools can keep guiding our children towards a better future. I look forward [29:28] to hearing more today about how we can achieve this goal. I thank our witnesses for being here NIU. [29:35] The gentlelady yields back. I now recognize the chairman of the full committee, Mr. Jordan. [29:39] No, I don't recognize him right now, but I will recognize the ranking member of the full committee, [29:45] Mr. Raskin, for his opening statement. Thank you kindly, Mr. Chairman. Thank you to all of our [29:50] witnesses for joining us. In a just world, the Judiciary Committee today would be investigating why a masked [29:56] ICE agent shot three times in cold blood and killed an unarmed citizen, a 37-year-old mom, Renee Nicole Good. [30:07] We'd be investigating why Trump's DOJ is harassing and investigating Renee's wife instead of investigating [30:15] her killer. We'd be asking why ICE agents are trained in basic CPR, but 911 tapes have shown none of the [30:23] agents performing CPR on Ms. Good. They left her bleeding alone in her car for almost three minutes [30:29] and definitively rejected the help of a man who came forward and identified himself as a doctor. [30:36] We'd be investigating why in another Minnesota case ICE agents deployed tear gas under the car of a family [30:43] of eight people, including a six-month-old, a two-year-old, and two kids with severe asthma, [30:49] who were just trying to get home from a basketball game. The baby stopped breathing, and his mom had [30:55] to administer CPR as they desperately waited for medical help to arrive. But our colleagues want to [31:01] talk about fraud in Minnesota, fraud that was already being investigated and prosecuted under the [31:08] last administration. It is true that social services fraud, serious fraud occurred in Minnesota. That's [31:16] why under President Biden, the Department of Justice opened multiple criminal investigations that to [31:22] date have already resulted in more than 90 people being charged and 64 people being convicted of federal [31:30] criminal offenses. Indeed, Minnesota lawmakers acted to root out and prevent fraud going forward in the [31:37] public benefits program. That's why last year, the Minnesota Legislature passed legislation to empower the [31:43] governor to cut off payments or to claw back funds whenever fraud is detected. And that's why Governor [31:49] Walz appointed the first ever director of program integrity to make sure the state is effectively [31:56] investigating and preventing fraud and corruption in their programs. The fraud in Minnesota was discovered [32:03] not by a right-wing social media influencer who's been harassing people in communities all over Minnesota in [32:09] recent weeks, but by the hard work of real local investigative journalists, brave whistleblowers and state and federal [32:19] auditors. It is this fraud which we must take seriously is not unlike the 2.5 billion dollar [32:28] breathtaking Medicare fraud scheme uncovered last year in the home state of the chairman of this subcommittee, [32:35] as he himself mentioned, or the massive COVID-19 unemployment assistance fraud scheme uncovered in [32:43] Chairman Jordan's home state of Ohio. Fraud is endemic in government all over the world. There are fraudsters [32:52] attacking our public institutions, trying to undermine them and rip them off. Even our president has been [33:00] convicted of 34 accounts of criminal fraud by a jury of his peers in New York related to the fraudulent [33:09] payments made to porn star Stormy Daniels and also civilly convicted in New York for different kinds of real [33:17] estate fraud. Fraud is not headquartered in one state or one municipality, much less one ethnic, racial or religious [33:27] community. But President Trump couldn't resist the temptation to use fraud in Minnesota as an occasion to [33:34] mobilize the power of the federal government to bully and intimidate first and second generation Somali [33:41] Americans who live in that state. Many of the people convicted in the fraud schemes were of Somali ancestry. [33:48] So under the pretext of cracking down on a fraud that had already been discovered, investigated and prosecuted, [33:55] Trump surged federal immigration officers to Minnesota and aimed them at the Somali American communities, [34:03] calling the people who live there repeatedly garbage. This is despite the fact that it is a complete [34:10] non sequitur, obviously, to send immigration agents to conduct fraud investigations and the deployment of [34:18] law enforcement resources against an entire ethnic community after the criminal prosecution of a small [34:25] group of its members is to promote the sinister ideas of collective guilt and guilt by association, [34:34] two doctrines that are emphatically rejected in Anglo-American jurisprudence and by our courts. [34:42] The community targeted in Minneapolis is made up, incidentally, overwhelmingly of U.S. citizens. [34:48] 95% of Somalis in Minnesota are U.S. citizens, including 58% of whom were born in the United States. [34:56] Well, what is the Trump administration's actual record on fraud? Well, let's see. President Trump [35:02] pardoned the big time drug dealer and convicted fraudster Juan Orlando Hernandez, the former president [35:08] of Honduras of Honduras sparing him a 45 year criminal sentence after he brought in 400 tons of cocaine into our country. [35:19] That's 800,000 pounds of cocaine that he said, quote, we are going to stuff up the nostrils of the gringos. [35:30] And Trump pardoned him. And if you're interested in that particular sweetheart deal, [35:35] that would be a great subject for a hearing, Mr. Chairman. Just last week, again, the president [35:40] granted pardons to more convicted fraudsters. Julio Herrera Velatini was scheduled to be sentenced [35:46] this month for participation in a political corruption and fraud scheme alongside his co-defendant, [35:52] the former governor of Puerto Rico, Wanda Vasquez. In late 2024, Mr. Herrera was facing felony bribery [35:59] charges. In a different case, his daughter donated $2.5 million to the MAGA Inc. Super PAC. Then, [36:06] in May 2025, Mr. Herrera's lawyer, who had served on President Trump's legal team, negotiated a deal [36:13] allowing him to plead guilty to a trivial misdemeanor offense instead. Several months later, [36:19] Mr. Herrera's daughter donated another million dollars to MAGA Inc. And what do you know, [36:24] President Trump generously granted Mr. Herrera a full and unconditional pardon just last week. [36:31] They're making a fraud out of the pardon process in America with pay-to-play rules as they pardon [36:38] recidivist, hardened, unrepentant fraudsters. Well, indeed, in total, President Trump has pardoned [36:48] more than 1,600 people, depriving victims, survivors, and taxpayers of an estimated, [36:53] check this out, $1.55 billion in restitution and fines owed to us, the American people, [37:02] while shockingly, because other presidents didn't do this, but Trump did, while shockingly allowing [37:09] corporate fraudsters and tax cheats to keep all of their ill-gotten gains. This is a massive and [37:17] unprecedented swindle from working-class people and crime victims as the administration gives all [37:24] of these ill-gotten gains right back to the criminal fraudsters who stole the money in the first place. [37:31] And finally, Mr. Chairman, President Trump has dismantled the infrastructure that actually [37:37] prosecutes white-collar crime and fraud in America, actually roots out waste fraud and abuse. [37:44] The Trump DOJ gutted the public integrity section at DOJ that prosecutes government officials who break [37:51] the law. And nearly a year ago, his DOJ suspended enforcement of the Foreign Corrupt Practices Act, [37:58] which prohibits foreign bribery, saying all bets are off. He's gutted the Consumer Financial Protection [38:05] Bureau, which is the first and the only agency devoted solely at the federal level to protect American [38:11] consumers against being cheated by big financial corporations. The CFPB delivered $21 billion back [38:20] to more than 200 million Americans who were victims of fraud and other predatory business practices, [38:26] and the administration has been gutting the CFPB because they are on the side of corporate fraud [38:33] and white-collar crime. That's the truth of what's going on there. They fired 17 inspectors general, [38:41] the independent government watchdogs, whose job it is actually to root out waste, fraud, abuse, [38:47] and corruption, and left 28 IG offices without Senate-confirmed leadership at all, allowing the corruption [38:54] and the fraud to run rampant. So if we're going to have a hearing about fraud in America, Mr. Chairman, [39:00] let's do it. Let's take in the full scope of what's taking place in our country. I yield back to you. [39:06] The gentleman yields back. I now recognize the chairman of the entire committee, Mr. Jordan. [39:10] Thank you, Mr. Chairman. I'll be brief. I want to thank our witnesses for being here. [39:15] Estimates are potentially as high as $9 billion we're looking at here in what appears to be a decade-long [39:24] scam fraud. I mean, I always look at one program I talked about a couple weeks ago in an oversight [39:30] hearing was this Feeding Our Future program, where Americans' hard-earned tax dollars, [39:36] taking that money and supposedly providing meals to children. The problem was there were no meals [39:42] and no kids. They're just stuffing it in their pockets. So I think this is a great hearing to [39:47] have. We appreciate the witnesses and the work that they've done, Ms. Larson and the work she does, [39:52] and actually making a difference, doing a legitimate program. Mr. Shirley for uncovering this and Mr. [39:56] Dexter and others who are here. So with that, I would yield back and look forward to hearing [40:00] from our witnesses and the hearing itself. Thank you, Mr. Chairman. I recognize myself for [40:05] just some UCs. The first one is President Joe Biden commutes sentences for two Chicago area's most [40:12] notorious fraudsters. North Dakota judge blasts Biden for setting fraudsters free. Biden commutes [40:22] roughly 1,500 sentences. Pardons 39 in the biggest single day act of clemency, including fraudsters. [40:32] Illinois lawmakers furious after Biden commutes sentences of state fraudsters. Without objection. [40:38] And now, Mr. Chairman, could I enter some as well? Yeah, please. Thank you much. This [40:45] UC request is from ABC News, January 20, 2026, titled Trump's pardons forgive financial crimes that came [40:53] with hundreds of millions of dollars in punishment. This one is Arizona has recovered just five percent of [41:02] taxpayer dollars lost in a two point five billion dollar Medicaid fraud scheme. That's pro publica. [41:08] Columbus dispatch. Columbus mother and daughter among 15 indicted in pandemic unemployment assistance [41:14] fraud scheme. And finally, a Minnesota fraud scheme timeline from NPR news fraud investigation stretched [41:24] across Wells's tenure. Without objection. And now, without objection, all of the opening statements will be [41:33] included in the record and we will introduce today's witnesses. Mr. Scott Dexter. Mr. Dexter is a former [41:39] law enforcement officer, having served for 28 years. He also served with the Minnesota Department of Human [41:45] Services Office of Inspector General, where he investigated fraud in the child care assistance [41:49] program. Thank you, Mr. Dexter, for being here. And Ms. Jennifer Larson. Ms. Larson is the founder and [41:56] chief executive officer of the Holland Center for Autism, a clinic that provides services to children and [42:02] young adults with autism. She started the Holland Center to serve families like hers that were not [42:07] receiving adequate services and support elsewhere. Thank you, Ms. Larson, for being here today. Mr. Nick [42:12] Shirley is an independent journalist. His recent investigations and videos have shed light on the [42:17] scale of fraud and public benefit programs in Minnesota that are currently ongoing. And thank you, [42:23] Mr. Shirley, for being here. And Mr. Dylan Hitler-Gaudet. Mr. Hitler-Gaudet is the acting vice president of [42:30] policy and government affairs at the Project on Government Oversight. POGO is a nonprofit organization [42:35] that investigates alleged wrongdoing by the governor. Thank you, Mr. Hitler-Gaudet, for being [42:40] here with us today. We welcome all our witnesses and thank them for appearing today. We will begin by [42:46] swearing you in. Would you please rise and raise your right hand? Do you swear or affirm under penalty [42:54] of perjury that the testimony you're about to give is true and correct to the best of your knowledge, [42:58] information and belief? So help you God. Thank you. Thank you. You may be seated. The record will [43:03] reflect through the witnesses have all answered in the affirmative. And at the instruction of Mr. [43:09] Hitler-Gaudet, I wanted to let all members of the panel know that when you have questions for him, [43:15] please say his name so he knows that you are addressing him, please. I want the witnesses to know [43:22] that your written testimony will be entered into the record in its entirety. Accordingly, we ask that [43:27] you summarize your testimony in five minutes. And we'll begin now with Mr. Dexter. You are [43:31] recognized for your five-minute statement. Thank you. Chair, members of the community, [43:37] thank you for the opportunity to speak with you today. My name is Scott Dexter. I'm a retired law [43:42] enforcement investigator with 28 years of experience, most of it spent conducting criminal and financial [43:47] fraud investigations with experience in surveillance operations. In 2013, after retiring from law [43:54] enforcement, I joined the Minnesota Department of Human Services as part of a newly created investigative [44:00] unit within the Office of Inspector General. Our mission was straightforward, identify and investigate [44:06] fraud within the child care assistance program known as CCAP. I was one of the original four [44:11] investigators hired, all of us former law enforcement professionals with backgrounds in criminal [44:16] investigations. Our cases were not selected based on the name of the center, the owner or the community [44:22] it served. They were selected based solely on tips, complaints, and the amount of CCAP funding being [44:27] paid out. The highest funded centers were reviewed first, and many of those centers were referred to us through [44:33] the public tip line or by licensing inspectors who observed activity inconsistent with a legitimate [44:40] daycare operation. What we found was deeply concerning. Many of these centers operated out of commercial spaces [44:47] with windows totally covered, no visible play areas, and very few children ever present. Through surveillance, [44:54] data collection, and review of attendance and billing records, we repeatedly documented patterns of over [45:00] billing, non-existent attendance, and in some cases children being signed in for hours they were never actually [45:06] at the center. Our investigative process was thorough and methodical. We collected licensing and billing data, [45:14] installed covert surveillance cameras, reviewed hours of video, identified parents and employees, [45:19] and calculated estimated overpayments based on actual attendance. Completed cases were then turned [45:25] over to the Minnesota Bureau of Criminal Apprehension for search warrants, interviews, arrests, and potential [45:31] prosecution. As our investigations progressed, we noticed a trend. Many of the centers receiving the highest [45:39] levels of CCAP funding were owned and operated by Somali individuals, and the families served were [45:44] predominantly Somali. This was not the basis for selecting cases, but it did become the basis for [45:51] accusations against us. We were labeled as racially biased, despite the fact that our case selection was [45:57] driven entirely by funding data. An outside review was launched into our investigative practices. We were [46:04] questioned about how we selected centers and how we conducted surveillance. Following that review, new [46:09] restrictions were placed on our work, including mandatory panel reviews before we could move forward with [46:14] investigations. Investigators were also pulled from conducting new or current investigations in order [46:20] to enter data from all previous complaints received by DHS into a newly created database, a process that took [46:26] nearly a year to complete. These changes significantly hindered our ability to do our jobs effectively. [46:32] Ultimately, in 2019, I chose to retire because the investigative process had become so constrained that [46:39] meaningful work was no longer possible. Through collaboration with federal agencies, including [46:45] the IRS Criminal Investigation Division, Homeland Security, and the U.S. Department of Health and Human [46:50] Services, we learned that millions of dollars in cash from the Somali community was being flown out of the [46:55] Minneapolis-St. Paul Airport by Somali couriers. At one point, nearly $70 million had been documented [47:02] leaving the country halfway through a single year. Although we could not prove that the cash was obtained [47:07] fraudulently, we strongly suspected that it was. We also encountered situations where federal partners [47:14] were prevented from opening cases due to concerns about political sensitivities surrounding the Somali [47:20] community and the refugee resettlement program. These decisions had real consequences, allowing fraud to [47:26] continue unchecked. Throughout our work, we identified several loopholes that made CCAP highly vulnerable to [47:32] fraud. Centers were allowed to bill for the full authorized hours, even when children were present for only [47:37] minutes. Billing records could be submitted up to 30 days later, creating opportunities for manipulation. [47:44] Attendance records were handwritten, unreliable, and often incomplete. And despite our recommendations, [47:50] no biometric attendance systems, no electronic submission requirements, and no state-installed [47:55] security cameras were ever implemented. Chair and members, the purpose of my testimony is not to cast [48:00] blame on any community. It is to highlight systemic weaknesses that allowed large-scale fraud to occur [48:06] and to emphasize the need for stronger safeguards, better oversight, and investigative processes that [48:11] are allowed to function without political interference. Thank you for your time and your commitment to [48:17] ensuring accountability within publicly funded programs. And I am prepared to answer any questions [48:22] that you may have. Thank you, Mr. Dexter. And now, uh, we're going to recognize Mr. Hetler-Gaudet for your [48:30] five minutes of opening statement. Chairman Biggs, Ranking Member McBath, and members of the subcommittee, [48:40] I appreciate the opportunity to testify before you today on the important issues of preventing fraud [48:45] and protecting taxpayer dollars. My name is Dylan Hetler-Gaudet, and I am the Acting Vice President [48:51] of Policy and Government Affairs at the Project on Government Oversight. We are a nonpartisan, [48:56] independent watchdog that promotes a more accountable, transparent, and effective federal government. [49:02] We view it as our mission to combat abuse of power and corruption in the federal government, [49:07] which includes working on rooting out waste, fraud, and abuse. The unfortunate truth is that [49:14] fraud in government programs is a fact of life. Since the United States government has existed, [49:21] fraud in government has also existed, or much longer than that, in fact. For as long as human beings [49:29] have been organizing ourselves into societies and building institutions to govern those societies, [49:33] there have always been those who will seek to take advantage. This is a harsh but [49:39] real truth related to the human condition, related to our fundamentally fallen and flawed natures. [49:46] That said, it is still incumbent upon every one of us to do what we can to prevent fraud [49:51] and to hold perpetrators of fraud accountable. This is especially true when the fraud implicates [49:57] hard-earned taxpayer dollars and critical public programs and services. This is true whether we're [50:04] talking about fraud in the context of the Feeding Our Future program or any other program in Minnesota, [50:08] whether we're talking about welfare fraud in Mississippi, which involved the participation of a [50:13] world-famous Hall of Fame NFL quarterback. This is true whether we're talking about fraud in the [50:18] context of it being perpetrated by large multinational defense companies in the context of a multi-billion [50:25] dollar contract they have with the Defense Department. The point here is that fraud and the abuse of [50:31] taxpayer dollars is not related to any particular geographic, demographic, or other boundary or [50:37] characteristics. But why do these things happen so much? Mostly they are caused by deep structural flaws, [50:46] gaps and weaknesses in our system of government. They're also driven by recalcitrance and resistance [50:53] to change on the part of federal agencies. To put it shortly, fraud is a systemic problem and it [51:00] requires systemic solutions. So what are these solutions? I'm pleased to share a few of them with [51:07] you today. We must first look at watchdogs, critical sources of information, and practitioners of [51:16] oversight from within the federal government itself. I'm specifically talking about inspectors general, [51:21] the government accountability office, and whistleblowers. Rather than attacking, firing, [51:28] undermining, and intimidating these individuals and entities as this administration and its allies [51:34] have done, we must strengthen, preserve, and protect them. We must enact reforms to make sure that IGs [51:39] and GAO can perform their duties effectively and independently, and we must add additional safeguards [51:45] to make sure that whistleblowers can blow the whistle without fear of reprisal or retaliation. [51:50] We must also take a long, hard look at the architecture currently in place for how we track, [51:56] monitor, analyze, and assess federal funding. To put it bluntly, that architecture is broken. [52:04] Key resources like usaspending.gov are in desperate need of overhaul and modernization. We need to [52:10] enhance and improve the quantity, quality, timeliness, and integrity of the data and information we [52:14] collect on federal funding. We need to promote more accountability, transparency, and compliance [52:20] mechanisms within the chain of spending for federal funding. If we don't do this, we will never have a good [52:26] grasp on where funding is going, where it's setting up, who is being helped by it, who is being missed by [52:32] it, and what the ultimate impact is. Lastly, we must enact robust reforms and vigorous enforcement to [52:40] crack down on corruption, cronyism, and conflicts of interest, which turbocharge waste, fraud, and abuse [52:45] in the federal government. The presidential pardon is an acute example of this, with each of the last two [52:50] administrations using the pardon power inappropriately to pardon convicted protesters. We must also promote [52:58] reforms to crack down on the revolving door between agencies and industries, and to head off pay-to-play [53:04] politics, all of which distort and corrupt decisions like the award of federal contracts. [53:09] The takeaway here is simple. Focusing on individual slacious scandalous examples of fraud is akin to [53:18] looking at the symptoms and not looking at the disease or the root causes of the disease. The [53:25] project on government oversight stands ready, willing, and able to work with anyone here who wants to work [53:29] on root causes and systemic solutions so that we can actually get our hands around waste, fraud, abuse, [53:34] and corruption in the federal government. Thank you for having me here today, and I look forward to [53:38] answering your questions. Thank you, Mr. Hedlegata. And I just, I forgot to mention, when you get about 10 [53:45] seconds left, I'll just tip that so you will, so everybody will know that as well. So, Mr. Shirley, you're [53:52] recognized for your opening statement. Awesome. I'm here today to speak on behalf of all hardworking, law-buying, [54:00] tax-paying citizens here inside of the United States. I've helped bring the light widespread fraud that's [54:08] happening inside our nation, and we, the people, have had enough of our hard-earned money going [54:13] towards fraudsters as if it's no big deal. As I speak here, I want to ask everyone a question. How [54:20] much do we trust when we pay our taxes? It's going to benefit our nation. People erupted during the Boston [54:26] Tea Party over just a few percentages as they believed they were being taxed without representation. [54:31] Nowadays, we have the representation, but do we trust our representatives? My name is Nick Shirley, and I made a [54:38] 41-minute video that I posted on platforms like X and YouTube. My video received over 100 million views [54:46] and it created instant change within our government. As the federal government launched investigations [54:51] and departments such as Health and Human Services froze over 185 million dollars in child care funding [54:57] until businesses can prove they are legitimate businesses. I actually became aware of the fraud that [55:02] was happening in Minnesota in June of 2025 as I was there for a separate video in Minnesota and started [55:09] reaching out to me asking if I was making a video on the fraud. I said, well, what fraud? And this lady, [55:15] she was a real estate agent, and she says, well, I'm having a hard time selling my properties because [55:21] people are curious about these assisted livings that are popping up next door to some of the houses that [55:25] we're buying or the home health care clinics that are popping up, and we don't know who's next to these [55:29] houses that we're trying to sell. And I said, well, I'm not going to come and make a video if I don't have [55:35] any proof. So therefore I left Minnesota and I continued to look for fraud as in the best way I [55:41] could. And as I was getting my own information, a man by the name of David reached out to me and he [55:46] said, hey, I have been investigating this fraud for years now. I have been driving by these child care [55:52] centers. I've never seen a single child and I have received the information from the state of Minnesota [55:57] as to how much money these places are receiving. I said, great, let me come to Minnesota and we'll make this [56:02] video about potential fraud that was taking place inside of Minnesota. We go to a daycare [56:08] and I'm instantly surprised by what we see. We arrived and it was an industrialized building and [56:13] there was two daycares registered at that daycare, at that building. And the first thing I noticed is [56:20] all the windows are blacked out and there's no footprints in the snow of any children. There's no [56:26] playgrounds or anything that would make it look like it's a child care. But above me, a sign read, [56:32] open 7am to 10pm. But there was nobody there. The doorbell did not even work. And then we continued [56:40] to go to other daycares and we noticed the same pattern. No children, blacked out windows. And one [56:47] daycare, a learning center, spelled Quality Leering Center instead of Quality Learning Center. They had [56:55] received 1.9 million dollars, yet with that 1.9 million dollars, they could not even spell [57:01] leering right on their sign. Governor Waltz has said he's been fighting fraud in Minnesota since 2019 [57:07] and said the buck stops with him. However, how long would it take for you to notice a million dollars [57:14] being leaving your bank account and not knowing where it's going? That's essentially what had [57:21] been happening in Minnesota for years as billions of dollars has been misplaced. And meanwhile, while [57:27] people like Governor Tim Waltz called people like me a white supremacist, delusional conspiracy theorist, [57:33] he actually decided to drop out of re-election because I believe of how deep and extensive this [57:39] fraud is. Thank you very much. Since my reporting, the HHS department froze over 185 million dollars, [57:48] and to this day, not a single business has been able to prove proof of legitimacy. How fast would you be [57:56] proving that you are a legitimate business if you have children to actually feed and to take care of? [58:01] You'd be sending in that paperwork instantly. I made this video to document the widespread fraud that [58:06] has been taking place, as I truly believe all fraud is bad. And people like me, my generation, [58:16] we're sick of seeing tax dollars go towards fraud. We just want to have the same opportunities that [58:23] our fathers and our grandparents had. And when you see people making millions of dollars by committing [58:28] fraud, it upsets everybody from all age demographics. And so I hope today we can have a good conversation. [58:36] And I think we can all agree that fraud is bad and that fraud is fraud. And I wish the best for our [58:42] country. And I think that's what needs to be happening is to crack down on all forms of fraud. [58:48] So thank you for having me and God bless the USA. Thank you, Mr. Shirley. And now I recognize Ms. Larson [58:54] for your five minute opening statement. Chairman, ranking member and members of the committee, [59:00] thank you for allowing me to speak today on this issue. My name is Jennifer Larson. I'm the founder [59:05] and CEO of Holland Center in Minnesota. I've been an autism provider for over 20 years and started the [59:11] organization for my son. I built Holland Center because families with children like mine were [59:16] desperate for help, desperate for services and stability, desperate for somewhere they could trust [59:21] their child would be supported and helped, not sent home on a bad day, not babysat in a classroom and [59:26] forgotten. We serve the children that don't succeed in public school settings. What started as a small [59:32] program grew over two decades into four locations that families rely on, not just for therapy, but for [59:38] hope, routine and survival. This work is a labor of love for me. Just like me, there are providers all [59:44] over the state laboring with love to help these children. And this week, Holland and other programs [59:50] all over Minnesota are collapsing, not because we committed fraud, but because a crime ring was allowed to [59:57] operate inside Minnesota's service system. And the government's clumsy response is now destroying [1:00:02] legitimate, longstanding providers and devastating families that we serve. Families come to Holland, [1:00:08] they do not have a backstop. Their children often receive 30 or more hours of therapy a week. These are [1:00:13] not an extravagance. These are medically necessary. These children learn to communicate, regulate their [1:00:19] emotions, reduce dangerous behaviors and function in daily life. For many parents, therapy determines if they [1:00:26] can work. Consistent staff and therapy prevents severe behaviors and regression. Structured care [1:00:32] keeps children and their siblings safe. When services disappear, families do not just simply adjust. [1:00:38] They face a crisis. For more than two decades, Holland has served hundreds of children year after year, [1:00:43] employed hundreds of clinicians and staff, operated under yearly on-site audits, inspections and documentation [1:00:50] oversight, delivered real services to real children every day. We have always complied with everything the [1:00:56] system required. Yet within the last month, the state has withheld over $400,000 in Medicaid funds for [1:01:03] my own program. And that number grows every single day. I had to infuse my personal funds to survive these [1:01:09] weeks, but can't do that any longer without payment. Let me be clear. We are a fee-for-service industry. When we [1:01:16] can't pay our staff, we lose our staff and children lose care. Families do not lose appointments. They lose the [1:01:22] people they trust. What happened in Minnesota had nothing to do with the ethical long-standing [1:01:27] autism providers. What did happen was organized criminal networks that exploited autism services [1:01:33] by opening fake centers, billing for children that did not exist, billing for services never delivered, [1:01:38] and stealing millions of taxpayer dollars in the process. These are not minor compliance issues. [1:01:45] They are criminal enterprises. Families trusted that the government was protecting the integrity of the [1:01:51] system. It failed. Now, instead of doing the obvious thing and targeting criminal actors, the response [1:01:58] has been to freeze everyone's payments. That decision does not punish the criminals. It punishes [1:02:03] innocent children and families. As Medicaid payments are delayed due to prepayment review by an insurance [1:02:10] company that is in the business of denying claims, providers are reducing hours, cutting staff, and starting [1:02:15] to close. Families are scrambling for alternatives that don't exist. Children are regressing. Parents are leaving jobs [1:02:21] to care for their disabled children. Autism therapy cannot be paused without consequences. Loss of services [1:02:28] can erase years of progress in weeks, and abrupt disruption of services can cause lifelong consequences [1:02:33] in these children. This is not abstract harm. It is daily trauma for families already carrying an [1:02:39] extraordinary burden. The simple solution to the problem, send the criminals to jail and allow trusted [1:02:46] providers with decades of clean audits, verified ownership structures, to continue providing prescribed ethical [1:02:52] therapy and go back to paying them what we've earned and resume paying them on time. I built Holland [1:02:59] for 20 years. Families built their lives around the care that we provide. All of that is risk of destruction [1:03:10] today. Not by fraud, but by clumsy government response that failed to distinguish between criminals [1:03:16] and caregivers. It treats children with disabilities. The gentlelady will suspend. We've got a photographer [1:03:21] there. We allow photographers in here, but not between the panel of the witnesses and the members. [1:03:29] You will please move. Okay. Photographer, please move. Thank you. Like right now. Okay. Sorry. [1:03:39] Well, all of that is at the risk of destruction. Sorry, can I continue? Yeah, please continue. Not by fraud, [1:03:45] but the clumsy government response that fails to distinguish between criminals and caregivers. [1:03:49] It treats children with disabilities as acceptable collateral damage. Fraud must be stopped in [1:03:54] criminals prosecuted. I'm a taxpayer. I live in Minnesota. This is disgusting. But families and [1:04:00] children should never pay the price for government failure. Thank you. We will now proceed under the [1:04:11] five-minute rule with questions. Chair recognizes the gentleman from Wisconsin, Mr. Tiffany, for five [1:04:17] minutes. Thank you, Mr. Chairman. Besides the work Mr. Shirley has done, I want to recognize Powerline, who has [1:04:23] done Yeoman's work exposing this over the last decade, what has happened. And I just want to say, [1:04:28] Ms. Larson, I live in Northern Wisconsin. There's an autism school that was started in my community. [1:04:34] Where did we visit when we wanted to start that a decade ago? We came to Minnesota, where you have been [1:04:40] leaders in having good autism programs. And I think about the tremendous fraud that has gone on in [1:04:47] nutrition programs, housing programs. But is there anything more heinous than abusing an autism program? [1:04:55] I can't imagine. It's so hard to believe that people are faking the children have autism and stealing [1:05:08] money from the government. When I'm sitting here with my 25-year-old non-speaker, and now children [1:05:15] like my son aren't going to have services because they stole money from the government and faked these [1:05:19] things. And it is, like I said, disgusting. With what's going on right now, what are the families [1:05:24] that you're serving? What are they saying? They're scared. What are they doing? Everybody's scared. [1:05:30] There are centers that are programs that have already shut down. Staff are leaving. I, this week, [1:05:35] asked my staff who will take unpaid leave because we can't keep going like this. Like I said, I'm 400,000 [1:05:43] plus in debt now. And I'm not sure these are going to get paid back. I went to a bank and they went back [1:05:48] the receivable because they said that's not a receivable. If it's prepayment review, you may not get it. [1:05:53] And Ms. Larson, none of this would have happened if the fraud did not occur. Is that accurate? [1:06:00] Yes. Mr. Dexter, could have something been done about this earlier? [1:06:05] Yes. As I stated in my test opening testimony, in the years that I worked there, we identified [1:06:13] how fraud was occurring, the loopholes that existed. And we- What were some of the, what were some of the [1:06:19] warning signs, Mr. Dexter? Well, the fact that part of our job was to go and collect attendance records. [1:06:27] Um, we would find attendance records that were either incomplete, um, non-existent. Um, obviously, [1:06:35] there were times we found them to be fabricated because they were given to us way later. And, [1:06:41] um, and the same with billing records. They were allowed 30 days after the end of the billing period to [1:06:48] submit billing records. So they were not immediately available to us. And, um, it kind of allowed [1:06:55] overpayments or double payments to be overlooked. So, um, we had the attendance record issue. We had, um, [1:07:06] the fact that there was no way to verify who was signing the children in and out. Um, no way to verify [1:07:13] what times those children were signed in and out. Could I- Could I do a follow-up here? In- In Wisconsin, [1:07:19] we learned, um, this month that Ibrahima Diop, a Minneapolis school finance boss, [1:07:26] placed on leave for failing to submit required financial paperwork with the Minneapolis school [1:07:30] district and for signing questionable contracts linked to the Somali fraud scandal, was hired by the [1:07:36] Milwaukee public school system as a, uh, deputy superintendent as salary of $240,000 a year. [1:07:43] Do you think it wise? Might that be a warning sign that this person was involved? May have been involved [1:07:50] with fraud in Minneapolis? Um, shouldn't they be concerned in Wisconsin that this is going, [1:07:55] that they're hiring someone like that? Well, if somebody that they hire has a past history [1:08:01] and practice of doing that type of stuff, I would be very leery of it occurring again, [1:08:08] or that being the basis that they're hired. So Governor Evers, uh, refused to open the books [1:08:14] and is blocking federal audits of our food stamp and Medicaid programs. Um, and he also vetoed four [1:08:22] auditor positions in a recent budget. Um, do you think that is also a warning sign? Yes, if it's preventing- [1:08:33] or, or ill-advised, would that be a better way to pose the question? Yeah, if it prevents the oversight [1:08:40] and the ability to audit and look at the records to make sure can have a checks and check and balance [1:08:46] system, I think that'd be very unwise because again, that allows fraud to occur. Because, um, Mr. [1:08:55] Shirley, what is happening in Minnesota, it could be happening throughout the United States. Isn't that [1:09:01] correct? Correct. If there's one thing we've learned or leered, as they say in Minneapolis, [1:09:08] um, isn't it possible that this is happening everywhere? Yes, I believe it is. Mr. Chairman, [1:09:16] I yield back. Gentleman yields. I now recognize the ranking member of the whole committee, Mr. Raskin, [1:09:20] for his five minutes of question. Thank you very much, Mr. Chairman. Uh, thank all the witnesses for [1:09:25] your excellent testimony. Mr. Hedler-Gaudet, um, the administration has systematically undermined [1:09:34] government oversight. The president has fired more than a dozen inspectors general, not for any cause, [1:09:40] but seemingly just in retaliation for doing their jobs and to block unwanted investigations. President [1:09:46] Trump has defunded the council of inspectors general on integrity and efficiency. He's removed [1:09:52] independent leadership at the office of special counsel and office of government ethics, blockading [1:09:58] whistleblowers and numerous investigations. What is your assessment, Mr. Hedler-Gaudet, of the Trump [1:10:05] administration's apparent systematic opposition to internal oversight mechanisms in the federal [1:10:11] government? Uh, thank you, ranking member Raskin. Uh, my assessment is that the last year or so has [1:10:20] been one of the most anti-oversight, anti-accountability periods that I've witnessed in our federal government. [1:10:26] And I think the things you laid out as well as others are the sort of proof in the pudding there. [1:10:31] And I think speaking of things that should be giving us pause and raising red flags, that should [1:10:35] all be giving us serious pause and raising serious red flags about how seriously people who claim to take [1:10:41] oversight, accountability, fraud, uh, how seriously do they actually take it? There's been a lot of attention [1:10:47] given to, uh, Donald Trump's extraordinary use of the pardon power, as in the pardon of, uh, violent, uh, [1:10:56] insurrectionists and cop beaters. But there's also been a forgiveness of a billion and a half dollars [1:11:04] in restitutionary fines, um, that various people had to pay. And a lot of them are fraudsters. Uh, [1:11:15] the DOJ in Trump's first term brought bank fraud and tax evasion charges against reality TV stars, [1:11:21] Todd and Julie Chrisley. They were convicted in 2022. They owed more than $22 million in restitution [1:11:28] to taxpayers and to their victims. But then Trump suddenly inexplicably pardoned them and forgave [1:11:34] all of the money that they were supposed to be paying back to their victims. Todd Chrisley bragged publicly [1:11:41] about his get out of jail free card, jubilantly exclaiming the feds got effed. Let me give you one other [1:11:48] example. Um, Trump on April 23rd issued a pardon for Paul Walchuk, a former nursing home exec who [1:11:56] pleaded guilty to multiple tax crimes. What he was doing was taking millions of dollars from the nurses [1:12:02] and orderlies and doctors who worked for him at his facilities took more than $10 million that way. [1:12:08] Instead of giving it to the IRS, um, for, uh, their taxes, he used the money to buy a $2 million yacht [1:12:19] and to pay for high end jet travel and to go shopping at Bergdorf Goodman and Cartier. Well, [1:12:26] he was sentenced to 18 months in prison for stealing his tax, his employees tax withholdings. [1:12:32] And he was ordered to pay his employees back $4.4 million for the money he looted from their accounts. [1:12:40] So he's gonna have to pay that back. But then he got his mom to go do a glitzy fundraising dinner [1:12:46] for Donald Trump at Mar-a-Lago and she paid $1 million for her ticket. Then right after Trump [1:12:52] was inaugurated in the second term, Walchuk petitioned for a presidential pardon, arguing [1:12:57] that he was the victim of political retaliation because they were Trump supporters. And what do [1:13:02] you know? President Trump issued a complete pardon with forgiveness of all of the financial fines [1:13:09] and restitution that Mr. Walchuk was gonna have to pay back to his workers, the nurses and doctors [1:13:16] and orderly. So that was forgiven. That was $4 million taken away from the victims of a fraud and [1:13:23] given back to the perpetrator of the fraud. Okay. Now, if we had all day, we could go on all day with [1:13:29] this because that's how their pay to play pardon system works. What does this do to our efforts to [1:13:37] root out fraud and corruption systematically in the government and in crimes in different industries? [1:13:45] I think it provides a perverse incentive structure. I opened my statement by saying [1:13:52] that we all have a we all have an obligation and a responsibility to do what we can to prevent fraud [1:13:56] and hold perpetrators of fraud accountable. But that last bit holding a perpetrator of fraud [1:14:01] accountable, perhaps via conviction, doesn't mean much if all one needs to do is contribute to the [1:14:08] right super PAC or attend the right fundraiser. And suddenly that accountability and that conviction [1:14:13] is wiped away, including the financial restitution you mentioned. So those kinds of actions are at [1:14:18] direct cross purposes with any effort to promote a broader, more systemic approach to rooting out [1:14:22] waste, fraud and abuse. The gentleman's time has expired. Thank you very much. And I yield back. [1:14:26] Chair recognizes the chairman of the full committee, Mr. Jordan. Thank you, Mr. Chairman. Mr. Dexter, [1:14:30] let me, uh, let me make sure we got this. We got this right. Um, you get tips and complaints, [1:14:35] whistleblowers or others come to you and tell you something's not right at these childcare centers [1:14:42] in your state that are getting all kinds of taxpayer monies. Is that right? That's how it started. [1:14:47] That's correct. Okay. And then you go and do your work and you got 28 years experience [1:14:53] investigating things and specifically in the crime and financial fraud area. Is that right? [1:14:58] That's correct. And you go out and find out these childcare centers, there aren't any kids. No kids [1:15:03] are there. I mean, there's some, but it's like, you don't see the playground. You don't see, you don't [1:15:07] see any, any kids at a place where they're supposed to be helping children. And then you also find out [1:15:13] most of them are run by Somali individuals. Is that accurate? That is correct. And then you make [1:15:18] some recommendations. You said, here's what we should do. I think you put this on page two of your testimony. [1:15:24] You said there's some basic things you should do. No, you said they didn't have biometric attendance [1:15:29] system. They should do that. They should have electronic submission requirements. They need [1:15:33] security cameras. You made some recommendations. Yes. And then what happened? Nothing. They ignored [1:15:40] your recommendations, but it didn't stop there. Did it? They ignored your recommendations. They called [1:15:47] you a racist, right? Correct. Typical left. I always say the left will, the left will tell a lie. [1:15:54] Big media will report it. You tell the truth. They call you racist. Exactly what happened here. [1:16:00] So they ignore your recommendations. They call you a racist, but it even got worse than that. [1:16:05] If you can imagine, they started investigating you. Is that right? Yes. We were interviewed by an [1:16:12] outside firm for a report given to the Office of Legislative Auditor. What did that, what did that, [1:16:18] what did that report look like? What did they say? They call you a racist? What did the report say? [1:16:25] The report basically questioned our investigative tactics, looked at how our, how, how our unit was [1:16:35] managed. Even though you had 28 years experience in this particular area, tips and whistleblowers came [1:16:40] to you, even though that was the whole catalyst for doing this. Correct. Yeah. Okay. And the end result [1:16:46] is what? The end result is Ms. Larson, who's actually helping people, she suffers and the people she [1:16:53] helps suffers. Is that right, Ms. Larson? Not to mention, not to mention the, the fact that taxpayers [1:16:59] are getting ripped off, but the people who do good work, who actually help people, you suffered. [1:17:04] The, the disabled are paying for the money stolen. Yeah. And why do you think all this is the case? [1:17:12] So, I mean, all this brings me to the, this is, seems to be a typical pattern, but in the end, [1:17:15] you got to ask why, why was, when you point out what's going on, you have good people doing good [1:17:22] work who suffer. The taxpayers are getting ripped off. Someone's got to ask, well, why did they take [1:17:27] the not follow your recommendations, call you a racist, investigate you instead of just fixing [1:17:32] the problem? Why'd they do that? What could be the answer? Anyone want to hazard it? Mr. Shirley, [1:17:36] you want to hazard a guess why that's the case? Well, they simply use that as a deflection technique [1:17:43] to make you not want to speak out against the fraud. Yeah. It seems to me it's politics though. [1:17:47] You think it's politics, Mr. Dexter? Yes, I do. Yeah. The people at the top, [1:17:50] like, well, we don't want to do this. We don't want to be called racist. In fact, [1:17:53] we found that out and we could go in a hearing where we were looking at this feeding our future [1:17:58] program. And we found out they actually shut that program off for a while. They said, timeout, [1:18:03] something's not right here. They found the same kind of things you found, Mr. Dexter. And they said, [1:18:06] we're going to stop payment. And then it restarted. And the reason it restarted is because they [1:18:10] threatened a racial discrimination lawsuit against the authorities there in Minnesota. So, okay, [1:18:16] forget about the fact that we do this. We restart the money. We're going to hurt good people like [1:18:20] Ms. Larson and the people she helps and rip off the taxpayers. We're going to do it all for politics. [1:18:25] And we also found, interestingly enough, the attorney general in Minnesota had a meeting with the key [1:18:33] folks in this particular program. And then they find out a couple of weeks later, they start [1:18:37] synonym campaign contributions. I think it's politics. I think it's politics driving it all. And that's why [1:18:43] it's appropriate. We're investigating here at the congressional level. That's why it's appropriate. [1:18:47] The Department of Justice has put in place a specific individual to focus on this, not only in [1:18:52] Minnesota, but around the country. I talk too much. Anyone else want to throw in? I'll give you, [1:18:58] Mr. Shirley, Ms. Larson, a chance to say anything if you want. If not, I'll yield 28 seconds to my, [1:19:03] to our chairman. Yield 28, 20 seconds. Remaining my time to the chairman. Thank you. Thank you. [1:19:09] So, Mr. Hedler-Gaudet, would it surprise you that Joe Biden issued pardons to someone [1:19:17] named Crundell, who had the largest municipal fraud in the country's history and had a restitution [1:19:23] amount of $53.7 million that was never paid following the commutation? Would that surprise you, [1:19:28] sir? That would not surprise me. And actually, in my written statement, I outline how some pardons [1:19:34] under the last administration, the Biden administration, they also fall into the same [1:19:38] pattern of pardoning convicted protesters. So I'm in agreement with you there. [1:19:41] Yeah, thank you. And without objection, that time's expired. So without objection, [1:19:49] Mr. Klein will be permitted to participate today's hearing for the purpose of questioning the witness, [1:19:53] if a member yields him time for that purpose. And now we're going to go to Mr. Moore from Alabama. [1:20:01] Thank you, Mr. Chairman. All this talk about pardons and the ultimate shyster, one of them was Hunter [1:20:06] Biden. He got pardoned after Joe promised he wasn't going to do that on the way out. So anyway, [1:20:11] that's another pardon for another day. Ms. Larson, I'm impressed with your son. I honestly thought he [1:20:17] was your attorney when you guys were sitting there. But were there early warning signs acting on that [1:20:24] could have prevented the fraud schemes from growing to the scale that we see now? [1:20:30] I'd say yes. Looking back, the Smalley community in Minnesota has a high prevalence of autism. And I know [1:20:37] that because I serve a lot of minorities in my centers. So when these centers started popping up, [1:20:42] I thought good for them. You know, like I, I took care of my son, we have had a waiting list for five [1:20:48] years. So I thought it was a positive. And then it just started to go and go where now it's, you know, [1:20:53] 400 plus of these. And it started, I am not, I didn't Nick Shirley it, you know, that's a verb now. [1:21:00] I, you know, and go out and like, go see, because obviously I'm busy and that's not what I have time [1:21:05] for. But you know, I think there were a lot of early warning signs. I think if anybody was actually [1:21:10] paying attention. They would have caught it. Oh, 100%. Because you, how long have you been in [1:21:14] business? 20 years? Over 20 years. And you went through a number of audits, I think every year, [1:21:18] right? Every year. So how's it that these groups are getting away with it? And you're under the thumb of [1:21:24] the government auditing you every year? What, why do you think that is? Either there's a double standard and [1:21:29] they don't, for whatever reason, have the same expectations that we do. Or they're just looking [1:21:37] Maybe Chairman Jordan was on to something. Maybe it's politics. Yeah. Mr. Shirley, [1:21:43] now I guess investigative journalists turn on as right wing social media influencers. So [1:21:49] can you confirm how many daycare centers you personally visited in Minnesota during your investigation? [1:21:54] During that first video, we went to around seven. How did you select those facilities? I know you [1:22:00] said earlier footprints in the snow, but how is it that you identified those facilities to go to [1:22:04] initially? So the man, David, in the video, he had the daycares with the CCAP funding and we just [1:22:09] simply drove around Minnesota and around Minneapolis area. It took a lot of courage to do that, I would [1:22:14] imagine. Probably more so now than what it was when you initially did it. 100 million views, you said? [1:22:20] Yes, over 140 million views on excellent. So what was Mr. David's background? How did [1:22:24] you connect with him and did he call you or did you reach out? He simply is just a man in Minnesota [1:22:30] who has a passion for his city and he's been seeing fraud taking place for years. And out of [1:22:36] all the thousands of messages I get on Instagram and other platforms, I just happened to read his and [1:22:41] he provided me the information. So I gave him a phone call. And then from there, just went to those [1:22:45] different facilities. What was probably the most interesting thing as you were doing this? I saw the video. [1:22:51] We watched it and it looked like it was a number of facilities like in the same building. [1:22:57] Yes. So in one building, there was, I believe, three daycares and there were no children and they [1:23:04] were all receiving CCAP funding for separate daycares. There's one daycare we went to that one day it was [1:23:12] closed by the government. And then that same day was reopened underneath another name and they both [1:23:17] received CCAP funding. I bet Ms. Larson, they probably weren't getting audited nearly like you were. [1:23:23] I would guess not. So how many daycares are there in Minneapolis do we think are fraudulent right [1:23:28] now? Mr. Shirley, any idea or the amount of money total you get any idea on that? Well, they've frozen [1:23:34] over 185 million dollars and not a single business has been able to prove that they're a legitimate [1:23:38] business yet. So 185 million for sure that we know. Mr. Dexter, I got a question for you. What [1:23:43] common patterns or warning signs usually indicate that the provider or the program may be committing [1:23:47] fraud? As you were doing your investigations and 28 years of experience, what are some of the indicators [1:23:52] that you see that maybe that should be a telltale sign or a red flag that there's fraud there? [1:23:59] Well, one of the immediate signs that we saw when we would go out to first look at the location is [1:24:06] where that was located. A lot of times they were located in commercial areas and I'm not talking like [1:24:14] strip malls or anything like that. I'm talking about like industrial areas where you wouldn't typically find [1:24:21] a child care center. We would notice that there was no play area and if there was any play equipment it [1:24:31] was bare minimum. Now there was an exception that if there was a playground area within a very short [1:24:38] walking distance that would count. But a lot of times we didn't see that. But the most glaring thing [1:24:45] was that when we watched the centers, you know, we would do we would sit and watch it for a couple of [1:24:50] days before we even put up surveillance cameras. We would watch and we would see little to no [1:24:56] children present. If anything, there would be a few kids. As you begin to blow the whistle, the [1:25:04] investigator became. The gentleman's time has expired. I'll yield back, Mr. Chairman. Thank you. [1:25:08] Chair recognizes the ranking member, Ms. Bengath. Thank you, Mr. Chairman. When he began a second term, [1:25:15] President Trump broke from historic norms and fired 17 inspectors general. People who serve as critical [1:25:21] watchdogs and prevent waste, fraud and abuse. A federal judge held that these firings were illegal, [1:25:27] but also held that she could not reinstate these people due to their important roles. As a result, [1:25:32] the president has been able to appoint acting inspectors general who have themselves been removed [1:25:38] after informing Congress that Trump officials are not cooperating with investigations. Mr. Hedler-Gaudet, [1:25:45] how do these frequent firings affect the ability of the inspector general offices to prevent and [1:25:51] investigate fraud? I think they fundamentally undermine it. And they also create a real chilling [1:25:57] effect for the inspector general who are left. The incentive to do something that could upset the [1:26:04] powers that be suddenly becomes a bit of a risky proposition. And so between the completely undermining [1:26:09] them and the chilling effect, you are really dampening and damaging the ability to do real oversight. [1:26:15] Thank you. And how does the politicization of inspector general appointments affect the morale [1:26:21] and effectiveness of career investigative staff there within these offices? It also has a severely [1:26:29] negative effect on morale and efficacy within the offices. Thank you. So I believe we can and should [1:26:34] do more to prevent fraud and improve oversight so that all of our government efforts are doing the [1:26:40] the most that they can to help the American people. When the Judiciary Committee marked up the [1:26:44] Republicans partisan big ugly spending bill, I offered an amendment that would dedicate half of one percent [1:26:52] of funding to be used for oversight and fraud improvement and prevention. My Republican colleagues, [1:26:59] they opposed the amendment. Mr. Hedler-Gaudet, in your opening statement, you spoke on steps that Congress could take to [1:27:08] ensure robust nonpartisan oversight. The project on government oversight recently published an article, [1:27:16] Seven Ways Congress Should Sharpen Its Oversight in 2026. Without objection. Thank you. Thank you. [1:27:26] Is there anything else that you want to highlight from those recommendations? Sure. Yeah, I just want to [1:27:32] pause to note that Congress really is the indispensable actor when it comes to doing oversight. There's supposed to [1:27:39] be a somewhat adversarial relationship between the branches, and Congress is supposed to be the [1:27:43] primary adversary when it comes to the other two branches and conducting oversight. But that is [1:27:48] predicated on Congress taking that oversight duty seriously, irrespective of who is in charge of the other [1:27:53] two branches. And so I think there's a political will issue there with oversight, but also there are some [1:28:00] mechanical issues. So Congress could do a better job of holding hearings that are a bit more bipartisan, [1:28:06] a bit more focused on the facts as opposed to the the sizzle of a given anecdote or scandal. I mean, [1:28:13] really trying to get at root causes and really trying to take hard, deep looks at the underlying [1:28:18] structural reasons why things like fraud happen. It's not as sexy. It's not going to get you as many [1:28:23] views on social media, but it's going to actually ideally lead to long term, sustainable, durable [1:28:29] reforms that can really crack down on the problem. Thank you. And so the short lived Doge office was supposed to [1:28:35] cut fraud. Mr. Hetler-Gaudet, what did it actually do? And how did its actions actually affect everyday [1:28:42] Americans? So Doge was a complete failure, even on its own terms. The primary progenitor of Doge claimed [1:28:51] that he was going to find $2 trillion. Then he moved that down to $1 trillion in waste, fraud and abuse [1:28:56] cut spending. But in 2025, we actually spent more money than we spent in 2024. At the opening of this fiscal [1:29:03] year in October, we ran the largest opening month budget deficit ever run before at $285 billion. [1:29:11] We have hollowed out the key functions of a bunch of agencies. So any claim that Doge was effective [1:29:18] either on cutting spending or promoting effectiveness or efficiency are just flat out undermined and [1:29:24] undercut by the facts. And Mr. Hetler-Gaudet, because you have done investigations yourself, [1:29:31] did you do any follow up on Mr. Shirley's video? So personally, I took a look at some of what had [1:29:39] been done to try and backstop what Mr. Shirley indicated in his video by professional journalists [1:29:44] at CBS and by professional oversight practitioners like the inspector general in Minnesota. And as it [1:29:50] turns out, they had a difficult time substantiating what Mr. Shirley was claiming to be true in his video. [1:29:57] And in fact, they found countervailing evidence, including having been provided security footage by one of [1:30:01] those daycares of Shirley being dropped off the very day that Mr. Shirley was supposedly there. So [1:30:06] I think in my view, I would have to, I think I'd err on the side of believing the professional [1:30:11] journalist at CBS and the professional oversight practitioners at the inspector general office. [1:30:17] Thank you. I'm out of time. I yield. [1:30:19] Chair recognizes the gentlelady from Florida, Ms. Lee. [1:30:22] Thank you, Mr. Chairman. And so on that note, I think it's important that we return to a discussion [1:30:27] of how these investigations were conducted and the type of evidence that led to the discovery of [1:30:33] this massive fraud. One thing that is clear based on the testimony today is that this is not just a [1:30:39] Minnesota problem. This is a warning sign for every state that it is administering large scale programs [1:30:46] using taxpayer dollars. And we need to get to the bottom of how to identify this type of fraud and [1:30:54] prevent it from continuing to occur. So Mr. Dexter, I'd like to go back to your testimony, [1:31:01] both what you have shared with us already about your extensive background investigating and analyzing [1:31:07] program fraud and the methods that you used to identify the theft of taxpayer dollars in this [1:31:16] particular type of case. In your written testimony, you mentioned that case selection and investigations [1:31:23] were begun in part by looking at funding data. And I am interested in how your office would use [1:31:30] things like funding data, use statistics and other information and evidence to begin to develop these [1:31:38] cases. Well, it wasn't hard to find the funding amounts. We looked at the centers that received [1:31:47] CCAP funds. And then we just we listed them out. We had what was originally referred to as [1:31:53] the top 100 list. And it was based off of centers receiving the most CCAP funding. And that was [1:32:00] generated through the billing process and, you know, the people that administer the funds. [1:32:07] And when you looked at that list, did it turn out that there were certain facilities that were outliers [1:32:14] in some way, either because they were receiving a larger amount of funding based on student population [1:32:21] that appeared typical or because of where they were located. Tell us how you identified which [1:32:27] facilities warranted further review. Well, when we started looking at the centers that were receiving [1:32:34] the most funds, the investigators were each assigned cases were assigned centers. And we first started [1:32:41] looking into what the billing pattern was or what the billing amount was, how many children were being [1:32:47] billed at these centers? And we would have centers that were billing for 120 plus children and looking [1:32:55] at the different days and times, kind of establishing a pattern that just was outside the realm of a typical [1:33:03] daycare center. So in other words, you used objective data and evidence as the foundation to proceed further [1:33:12] with your investigations. Yes, in order to to start the investigation, that's what we would begin with. [1:33:18] And in your experience, wouldn't you also say that that is the typical method or a typical method [1:33:26] for beginning and analyzing a potential fraud case of any nature in any community? Yes, because in order [1:33:34] to do the investigation, you first have to find out if it warrants an investigation and to what extent [1:33:40] that investigation would would be. And now isn't it also correct? You mentioned in your testimony [1:33:46] systemic weaknesses that allowed the large scale fraud, even after you had developed substantial [1:33:53] evidence that there was in fact fraud occurring, that there were institutional and systemic barriers [1:33:59] that prevented you from successfully moving these cases through prosecution. And indeed, [1:34:04] in your testimony, you note that in 2019, you chose to retire because the process had become so constrained [1:34:13] that meaningful work was no longer possible. Tell us about the barriers and ultimately that profound [1:34:20] frustration that led you to retire. Well, when we were originally hired, when this unit was originally [1:34:26] created and we were hired, we were hired with the understanding that our job was going to be to [1:34:32] investigate fraud and stop it. And as we proceeded through with that, it wasn't by our doing that [1:34:39] it turned out that the centers we investigated were predominantly Somali. But once that was kind of [1:34:47] brought out to light, the roadblocks that were put in front of us being called racist, being called [1:34:53] before these boards to be investigated, and basically it wound up turning us into auditors. We wound up just [1:35:00] simply reviewing attendance records and matching them up with billing. There really wasn't a lot of [1:35:06] substantial investigation anymore. And most of our cases wound up going before administrative hearings [1:35:12] rather than criminal. Which in the end, allowed this pattern of conduct to continue to occur, did it [1:35:17] not? Yes. Thank you, Mr. Chairman. I yield back. General Lady yields. Chair recognizes now the gentleman from [1:35:22] North Carolina, Mr. Knott. Thank you, Mr. Chairman. To my colleague from Florida, thank you for that line of [1:35:27] question. I'm going to pick up where she left off. In regards to the testimony that we've heard today, [1:35:31] the other side of the aisle makes us believe, or wants us to believe, that the fraud has been [1:35:36] effectively stopped. That they aggressively pursued it, they prosecuted it, and that it is under control. [1:35:41] Is that your interpretation of where we are, Mr. Dexter? I believe the fraud is still going on. I don't [1:35:47] think anything has changed from what I've seen with Mr. Shirley's videos. I'm seeing in his videos the exact same [1:35:56] things that we were seeing back from 2014 to 2019 when I worked there. And it's astounding to me when [1:36:02] I was looking at some of the footage, the evidence, there was almost a sense of, we are owed this money [1:36:09] that we're stealing. How dare you investigate us? Did you ever encounter that type of attitude when you [1:36:14] were performing these investigations? There was an underlying attitude like that, that we were taking [1:36:20] away their money and that it wasn't fair to them. In your investigation, sir, were they as, [1:36:28] was the fraud as obvious as it seems to me that it appeared in the videos and the other evidence [1:36:33] that I've reviewed? Yes. As a matter of fact, when we would go out to do our investigations, one of the [1:36:39] things that we would have to do or I would have to do is we would scout out a location for our surveillance [1:36:46] cameras that allowed us a direct line of sight to the centers, all their accesses. A lot of that [1:36:52] because of the location where we were in these industrial commercial areas meant we had to go to [1:36:57] businesses and ask them permission. And the number one comment they made was, oh, you mean that daycare [1:37:03] center over there where there's no children? So everyone else around it saw it. In regards to your [1:37:08] investigation, sir, I'm assuming that you did not just investigate daycare fraud. What other types of fraud [1:37:13] did you investigate? Um, no, our, our function was strictly child care fraud, but some of that [1:37:20] overlapped into, um, even though we didn't investigate it, a lot of it was also tied into the medical [1:37:27] transportation. And did you ever investigate single entities that, that were appearing as though they [1:37:33] were committing fraud in multiple different or multiple avenues? I'm sorry. It was like, was there [1:37:39] one facility that was a daycare? It was also associated with a medical transport. Were there people who were [1:37:44] double dipping in the fraud in your investigations? Not that we saw as far as multi, uh, different [1:37:51] organizations, but there were where one daycare center owner owned multiple daycare centers. So [1:37:58] what we saw was more within the daycare center. Yep. Ms. Larson, thank you for being here. I echo my [1:38:05] colleague's sentiment from Alabama. Your son is very impressive. What's his name? His name is Kaden. [1:38:10] Kaden, thank you for being here today. You look sharp. You're doing great. Uh, let me just talk to you about, [1:38:15] uh, these various audits that you were subjected to. How rigorous were they? Very. They'd be there [1:38:21] for hours, come in and say, you know, I want to see these files for these kids at this date and this [1:38:26] time. Was there any way that you could have, uh, tricked them, concealed it? If you had not had any [1:38:31] children there, would it have been possible? Absolutely not. In regards to the services that [1:38:36] you've rendered first, thank you. Thank you. And then in terms of the budgets that you require, [1:38:41] how does it make you feel when you hear firsthand accounts that hundreds of millions of dollars have [1:38:46] been taken out of the country in suitcases to hostile nations? I can't even respond the way I [1:38:54] feel about that, but I will say it's still happening to the questioning you. I mean, there's only two [1:38:59] autism centers that have actually been shut down of all of these that are going on. So what they're doing [1:39:06] is this prepayment review and putting us through this AI system at Optum to look for suspicious [1:39:11] claims, which is why we're being, our funds are being held and it's not going to work. I'm going [1:39:16] to tell you, it's not going to work. I mean, they just need to do what Nick did, go and see that [1:39:21] there's no kids there. Go and check it out. And what Mr. Dexter did data driven review without any [1:39:28] preconceptions, without any prejudices, and then holding the fraudsters to account. And when he did [1:39:32] that, he was called a racist. It's astounding. It is astounding. And you said that you help many, [1:39:38] uh, many patients, diverse patients. How have those patients, uh, been harmed by this administration in [1:39:44] Minnesota, the walls administration? They are all being harmed. If I shut down next week, [1:39:49] is that what you're up against? Well, if I haven't gotten paid now, the last date of service [1:39:53] was December 5th. I'm over $400,000 in debt. My payroll is $250,000 every two weeks and we get [1:40:00] paid every two weeks. So on Sunday night, I'll know if I get any money. I haven't been paid a dime. [1:40:05] All my claims have been held. So I'm, I'm, you know, preparing to, apparently in Minnesota too, [1:40:11] I can't just pause services. If I pause my services, then the DHS can say, I'm sorry, [1:40:17] you've lost your license to serve the kids through this program. So I don't know what [1:40:21] they think we're supposed to do. Unbelievable. Yeah. Well, again, thank you for being here. [1:40:25] Uh, I appreciate all the testimony. Sorry I didn't get to everybody else. There's a lot of questions. [1:40:29] Mr. Chairman, I yield back. Thank you. Gentlemen, yields. I recognize the [1:40:31] gentleman from California, Mr. Kiley. Uh, thank you, Mr. Chair. Uh, Mr. Shirley, [1:40:36] thank you for your testimony today and, uh, and the, and the work that you've done. Uh, you know, [1:40:40] Americans, uh, hear these numbers of the fraud that we have and, you know, whether it's 10,000 or 10 million [1:40:46] or 10 billion, uh, sometimes the numbers, you almost become desensitized to it. And so the way [1:40:52] that your, uh, video was able to show people, uh, the fraud sort of in real life actually happening, [1:40:59] I think opened a lot of eyes and has helped to catalyze, um, a level of scrutiny, uh, that we [1:41:04] really should have had, uh, before. So you, you mentioned in your testimony that you think that what [1:41:09] you discovered in Minnesota, uh, that, uh, this is not, uh, isolated to that state, [1:41:15] but likely exists in other parts of the country as well, correct? Correct. What makes you think that? [1:41:20] Well, now you're seeing, since I've posted that video, lots of other people have started to go to [1:41:24] other locations, for instance, in Ohio or in Maine or in California. They're also seeing the similar [1:41:30] fraud take place in other daycares, for instance, in a lot of other locations. Yeah, [1:41:35] I have a particular interest in California, uh, being from that state. And, uh, I, uh, we know [1:41:40] that there's been a lot of fraud. There was $32.6 billion that's been confirmed in unemployment [1:41:45] insurance fraud. Uh, there's 1.2 million fraudulent community college applications. Have you gotten [1:41:51] any sense or have you seen any signs there that sort of are similar to what aroused your suspicions [1:41:56] in Minnesota? Yeah. And fraud in California might be worse than the fraud in Minnesota. What makes you [1:42:01] say that? Well, $24 billion went missing for homelessness. They've been trying to build this [1:42:06] train for years, yet there's hardly anything to prove for that fires. Yeah, those are good points. [1:42:13] So, uh, you look at you, let's, let's run through a couple of those, uh, because I mentioned the areas [1:42:18] where we have confirmed fraud, but then you also have these areas where you have so much spending and [1:42:23] then we look at what results from that spending and there's nothing. So $24 billion in homelessness and [1:42:29] yet the homeless population went up and a state audit found that they couldn't even, uh, figure [1:42:34] out where the money went or what the outcomes linked to that spending were. Is that something [1:42:38] that is kind of a red flag for you? Yeah, it's a major red flag and you don't even have to be [1:42:41] smart to be able to know that that's a red flag. Well, unfortunately our state legislators, uh, [1:42:46] haven't managed to figure that out or at least the governor hasn't. So what are you saying about him? [1:42:50] They're not smart. No, but, uh, yeah, I mean, it's so obvious and that's what we saw in Minnesota is how [1:42:55] complicit the government has been in enabling this fraud to happen. Quality Learing Center [1:42:59] had over 90 violations, yet they continue to give that daycare $1.9 million. Yeah, [1:43:04] that's a great point that there's, uh, the, the political accountability just hasn't been there [1:43:08] and that's what enables it to, uh, to, to continue. Uh, so then you mentioned the home, [1:43:12] the, uh, high speed rail as well. Uh, so there has been about $18 billion spent so far, [1:43:17] no track has been laid and not a single passenger has, has ridden the train. Uh, so when you spend $18 [1:43:22] billion on a train and there's no train, does that raise suspicions for you? Yes. So you think [1:43:27] that might be something worth looking at? For sure. We also had a $650 million 9-1-1 service [1:43:33] that they scrapped after six years. So absolutely no value from it. Maybe that's another example [1:43:37] where there might at least be questions. I think you got a lot in California. [1:43:41] All right. Well, we'll look forward to seeing, uh, what you find. We're certainly, uh, trying to use [1:43:45] whatever tools we have here to bring more accountability, uh, in California as well. Uh, Mr. [1:43:49] Dexter, I wanted to also ask you a couple of questions about, uh, your work because, um, you have extensive [1:43:54] experience on the law enforcement side for a side trying to detect fraud. That's actually how in [1:43:58] California we discovered the EDD fraud, the unemployment, uh, fraud, uh, is it wasn't, uh, [1:44:04] the state suddenly, uh, figuring it out. It was, uh, district attorneys who came together and [1:44:09] investigated and in fact pointed to the fact that the state had let this happen and failed to heed their [1:44:14] warnings and hadn't taken basic fraud detection steps. So, um, is, uh, is this something that you [1:44:19] encounter, like what kind of internal controls, uh, make it so fraud is more difficult and what type [1:44:26] of, you know, lack of internal controls make it so fraud is easier? I would say the, the biggest [1:44:31] thing was the fact that when we tried to investigate this, um, once we started bringing cases forward and [1:44:41] it showed that the number of centers that we investigated were smiling, the biggest roadblock [1:44:46] was the fact that they didn't want to follow through on these cases. They, um, shut down [1:44:52] investigations. They made us, uh, you know, in light of the report from this outside management firm, [1:45:01] we spent nearly a year pulled away from our investigations because one of the things they [1:45:07] determined was that when our unit started, we didn't have a proper case management system [1:45:12] for, uh, recording and keeping track of the tips. So as investigators, we instead [1:45:19] had to spend nearly a year entering past complaints made to DHS into a newly created database. [1:45:28] We couldn't, we couldn't do our investigations because of that. So they, they kept us from doing [1:45:34] our work basically. Yeah. Uh, so the states that make fraud detection a priority have less fraud than [1:45:40] those that, that actively, uh, contravene efforts like yours. Thank you, Mr. Chair. I yield back. [1:45:45] Thank you. The gentleman's time has expired. I recognize the, uh, ranking member, [1:45:49] Ms. McBath for some UCs. Thank you, Mr. Chair. I'd like to, uh, ask unanimous consent to enter into the [1:45:55] record an article, Republicans' claims of fraud are pretext for unpopular and dramatic Medicaid cuts. [1:46:01] Without objection. Thank you. And so I have, oh, I have some UC. Yeah, please go ahead. [1:46:07] Actually, forgive me. I have a handful of them here, Mr. Chairman. Um, one is a letter dated October [1:46:12] 21, 2025 from Representative Bennie Thompson to Robert F. Kennedy Jr. regarding the decision to [1:46:18] rescind the $101 million penalty imposed on Mississippi. Uh, press release dated September [1:46:25] 17, 2025 titled Governor Walz issues executive order directing state agencies to take additional [1:46:31] steps to combat fraud. Executive Order 2501, uh, titled Preventing Fraud and Establishing the Financial [1:46:38] Crimes and Fraud Section of the Department of Public Safety signed by Governor Tim Walz, [1:46:42] January 3rd, 2025. Um, article dated December 2nd, 2025 titled Trump calls Somali immigrants garbage as [1:46:51] U.S. reportedly targets Minnesota community. Article dated January 9, 2026 titled five states [1:46:59] sue administration for withholding billions in social safety, uh, net funds. Article dated January [1:47:06] 10, 2026 titled behind the Somali daycare panic is a mother and son duo angling to become top mega [1:47:13] influencers. Article dated December 31, 2025 titled right wing YouTuber behind viral Minnesota fraud video [1:47:20] has long anti-immigrant history. Article dated January 11, 2026 titled fact check what's really [1:47:26] happening with child care fraud in Minnesota. And finally, article dated January 13, 2026 titled the Trump [1:47:32] administration says it's cracking down on fraud, but it gave a red state a pass. Thank you, Mr. [1:47:38] Chairman. Without objection, chair recognizes Ms. McBath again for the UC. Thank you, Mr. Chair, [1:47:43] I ask unanimous consent to enter into the record an article titled Trump's child care fund freezing in [1:47:49] five states could cost millions 400 could cost families 400 million by julia cation of the century [1:47:56] foundation. Without objection, I recognize myself for a series of UCs. From Fox News, Biden clemency for [1:48:03] convicted fraudsters met with outrage slap and face from CNN victim shocked after Biden grants clemency [1:48:10] to kids for cash judge and $54 million embezzler and from Axios Biden sets presidential record on [1:48:17] pardons and clemency. Also, uh, Minnesota daycare expose journalist strikes again in part two names [1:48:25] the hub of the fraud wheel 70 78th defendant charged in feeding our future fraud screen scheme from [1:48:33] US Attorney's Office District of Minnesota suitcases filled with millions in cash flew out of MSP airport [1:48:40] XTSA agent connects dots years later from survival world from the US Department of Health and Human [1:48:46] Services HHS freezes child care and family assistance grants in five states for fraud concerns from the [1:48:53] US Attorney's Office District of Minnesota six additional defendants charged one defendant pleads [1:48:57] guilty in ongoing fraud schemes. This is from the local Fox News in Minneapolis through the years a decade [1:49:08] of investigating fraud Minnesota US Department of Homeland Security release you ice continues arresting [1:49:16] worst of the worst in sanctuary Minneapolis including pedophiles gang members and drug traffickers [1:49:21] from MSN TSA flag suspicious cash outflow at Minneapolis St. Paul airport from MSN foreign ATM Somali cash [1:49:31] exodus from Minneapolis exponentially larger than other major US airports from Breitbart SBA cutting off [1:49:38] grants to Minnesota over reports of Somali fraud Vance praises YouTuber Nick Shirley reporting on Minnesota fraud [1:49:46] Waltz and Omar using ice operations to distract from fraud scandal and from just the news in Somali fraud [1:49:54] scandal Republicans probe evidence of a blue state election scheme from the New York Post ringleader [1:50:00] of 250 million dollar Minnesota welfare fraud scandal ordered by judge to forfeit Porsche and luxury goods [1:50:05] from lifezet.com TSA whistleblower Somalis regularly flew out with suitcases stuffed with millions in cash [1:50:13] from Fox News Minnesota welfare fraud probe targets Somali hawala money transfers from the Star News Network [1:50:25] feds probe hundreds of millions in suspected Somali cash and luggage leaving Minneapolis airport [1:50:30] from USCIS USCIS announces results of operation twin shield a large-scale immigration fraud investigation [1:50:37] from PBS gnome says homeland security is investigating fraud in Minneapolis from Cornell law this is the 18 USC [1:50:48] section 666 theft or bribery concerning programs receiving federal funds [1:50:52] also same source 18 USC section 641 public money property records also from the same source 18 USC code 1001 statements [1:51:04] or entries generally and without objection I now recognize myself for my five minutes of questioning [1:51:11] so um I have read all of your statements and I do thank you Mr. Hedler-Gaudet for your recommendations [1:51:22] Mr. Dexter also had some recommendations uh I think those are prescient I think those are important [1:51:27] um but I I also have to bring some additional information out just because it's in my nature [1:51:34] I got I got to do it so Mr. Hedler-Gaudet you've been talking about the IGs because you were asked about [1:51:39] the IGs do you know how many cases for instance uh criminal cases are being investigated say by the [1:51:45] Department of Homeland Security IG right now I don't know the uh number off the top of my head no [1:51:52] would it surprise you if you there were 650 ongoing cases with 200 of those being COVID related [1:51:57] that would not surprise me no and do you know how many audits they have going right now [1:52:01] nope they have 60 audits going right now with another 20 uh uh investigations going that sounds [1:52:08] to me like the IG there at least in DHS is not being chilled because uh of the appointment of temporary [1:52:16] IGs am I wrong on that or am I misconstruing that one thing about the DHS IG Mr. Joseph Ghaffari [1:52:23] is he was actually appointed under uh the first Trump administration and he has remained ever since [1:52:28] uh we actually at the Project on Government Oversight have long recommended that Mr. Khaffari be fired [1:52:33] because he has had a long and demonstrated track record of uh slow walking investigation that DHS [1:52:38] particularly when it comes to abuse of force and other issues with DHS agents and and yet the [1:52:45] oversight committee uh for the IGs didn't uh adhere to that recommendation so anyway the point I I felt that [1:52:53] point needed to be made um additionally uh Mr. Dexter uh you looked at some of the same kind of uh [1:53:01] physical evidence that Mr. Shirley looked at um with regard to physical presence at the various daycare [1:53:08] facilities that you were examining between 2014 and 2019 is that true yes and you saw basically the same [1:53:16] kind of physical evidence um that Mr. Shirley uh exposed that's correct you also looked at funding data [1:53:24] and you also had whistleblowers yes and um I I just I find it interesting that um somehow uh local news [1:53:36] which reported on the fraud other local news reporters who reported on the fraud um credibly agree [1:53:45] with the findings of Mr. Shirley is that what you have seen as well Mr. Dexter yes uh Fox 9 news in [1:53:52] minneapolis um they followed a lot of our our cases and dead stories on them and so so I I I mean the [1:54:04] the very notion of trying to discredit Mr. Shirley because he got a lot of views or that some CBS [1:54:11] reporter disagreed and said they couldn't find the evidence actually in my mind discredits the CBS [1:54:19] reporter that's because I mean I appreciate the ranking member having cited the Arizona fraud which [1:54:28] I also constantly cite is a massive fraud in Arizona not just the 2.5 billion but there's an essential [1:54:36] another additional allegation of about seven billion dollars per year fraud in Arizona I think there [1:54:43] needs to be a change there I think we need to get a handle on this not just in Minnesota but nationwide [1:54:51] because what we've seen in Ms. Larson's case those who are conducting themselves according to the law [1:54:59] delivering services are the ones that also get punished but if you're a fraudster somehow you're [1:55:06] able to keep on going and the fraud hasn't stopped Mr. Shirley have you seen any evidence [1:55:12] you said twice today that 185 million dollars of recipients not one of them has been able to [1:55:20] demonstrate they are a legitimate business no in fact they actually actively suing the HHS to prevent [1:55:27] receipt prevent handing over any information right so they don't even want to give the information [1:55:32] that would be required of an audit that would be required from a separate uh uh independent investigation [1:55:39] they want they want a court to intervene and enjoin uh and prevent them from having to respond to this [1:55:46] kind of investigation is that correct Mr. Shirley that is correct so I mean this is the thing and I [1:55:52] I I think I listen to the panelists I think everybody on the panel I think everybody up here we all want to [1:55:59] stop the fraud but the the bottom line is it's so infused with politicization that it it is preventing us [1:56:08] from from just sitting down there and saying okay we got a symptom in Minnesota and we're going to fix it [1:56:14] I think the symptoms being exposed is critical because then it actually motivates people to [1:56:20] try to get to the the root cause I'm out of time um and we have no other members uh here so I just want to [1:56:29] thank each one of you from Mr. Dexter Mr. Heather Gaudet Mr. Shirley and Ms. Larson for being here and giving us [1:56:35] your testimony I really really appreciate it and I would encourage my my colleagues to be better stewards and have better [1:56:44] oversight because otherwise Mr. Shirley's generation is going to be paying through the wazoo which [1:56:52] right now means 40 trillion dollars in national debt so thank you all appreciate it we are adjourned