When Public Funds Are Abused: Addressing Fraud and the Theft of Taxpayer Dollars (January 21, 2026)

Summary

Hearing record When Public Funds Are Abused: Addressing Fraud and the Theft of Taxpayer Dollars, before the Subcommittee on Crime and Federal Government Surveillance of the Committee on the Judiciary, U.S. House of Representatives, on January 21, 2026 (Serial No. 119–51). Opening statements are listed for The Honorable Andy Biggs, The Honorable Lucy McBath, The Honorable Jamie Raskin and The Honorable Jim Jordan. Witnesses were Scott F. Dexter and Nick Shirley, each listed as an Independent Journalist; Dylan Hedtler-Gaudette of the Project On Government Oversight; and Jennifer Larson, Chief Executive Officer and Founder of Holland Autism Center and Clinic. Each witness gave oral and prepared testimony.

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“When Public Funds Are Abused: Addressing Fraud and the Theft of Taxpayer Dollars (January 21, 2026).” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/chrg-119hhrg62657-when-public-funds-are-abused-addressing-fraud-and-th-2c7bb39172/, SHA-256 6b518ed95602b96e44a2e1a2ace15340b2855185ddf8cc846fa720157de696eb.

Full text

WHEN PUBLIC FUNDS ARE ABUSED: ADDRESSING
FRAUD AND THE THEFT OF TAXPAYER DOLLARS

HEARING
BEFORE THE

SUBCOMMITTEE ON CRIME AND FEDERAL
GOVERNMENT SURVEILLANCE
OF THE

COMMITTEE ON THE JUDICIARY
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS

SECOND SESSION

WEDNESDAY, JANUARY 21, 2026

Serial No. 119–51

Printed for the use of the Committee on the Judiciary

(
Available via: http://judiciary.house.gov

U.S. GOVERNMENT PUBLISHING OFFICE
62–657 WASHINGTON : 2026
COMMITTEE ON THE JUDICIARY
JIM JORDAN, Ohio, Chair

DARRELL ISSA, California JAMIE RASKIN, Maryland, Ranking Member
ANDY BIGGS, Arizona JERROLD NADLER, New York
TOM MCCLINTOCK, California ZOE LOFGREN, California
THOMAS P. TIFFANY, Wisconsin STEVE COHEN, Tennessee
THOMAS MASSIE, Kentucky HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia
CHIP ROY, Texas ERIC SWALWELL, California
SCOTT FITZGERALD, Wisconsin TED LIEU, California
BEN CLINE, Virginia PRAMILA JAYAPAL, Washington
LANCE GOODEN, Texas J. LUIS CORREA, California
JEFFERSON VAN DREW, New Jersey MARY GAY SCANLON, Pennsylvania
TROY E. NEHLS, Texas JOE NEGUSE, Colorado
BARRY MOORE, Alabama LUCY MCBATH, Georgia
KEVIN KILEY, California DEBORAH K. ROSS, North Carolina
HARRIET M. HAGEMAN, Wyoming BECCA BALINT, Vermont
LAUREL M. LEE, Florida JESÚS G. ‘‘CHUY’’ GARCÍA, Illinois
WESLEY HUNT, Texas SYDNEY KAMLAGER-DOVE, California
RUSSELL FRY, South Carolina JARED MOSKOWITZ, Florida
GLENN GROTHMAN, Wisconsin DANIEL S. GOLDMAN, New York
BRAD KNOTT, North Carolina JASMINE CROCKETT, Texas
MARK HARRIS, North Carolina
ROBERT F. ONDER, JR., Missouri
DEREK SCHMIDT, Kansas
BRANDON GILL, Texas
MICHAEL BAUMGARTNER, Washington

SUBCOMMITTEE ON CRIME AND FEDERAL
GOVERNMENT SURVEILLANCE
ANDY BIGGS, Arizona, Chair

TOM TIFFANY, Wisconsin LUCY MCBATH, Georgia, Ranking Member
TROY NEHLS, Texas JARED MOSKOWITZ, Florida
BARRY MOORE, Alabama DAN GOLDMAN, New York
KEVIN KILEY, California STEVE COHEN, Tennessee
LAUREL LEE, Florida ERIC SWALWELL, California
BRAD KNOTT, North Carolina

CHRISTOPHER HIXON, Majority Staff Director
ARTHUR EWENCZYK, Minority Staff Director

(II)
C O N T E N T S

WEDNESDAY, JANUARY 21, 2026

OPENING STATEMENTS

Page
The Honorable Andy Biggs, Chair of the Subcommittee on Crime and Federal
Government Surveillance from the State of Arizona ........................................ 1
The Honorable Lucy McBath, Ranking Memer of the Subcommittee on Crime
and Federal Government Surveillance from the State of Georgia ................... 4
The Honorable Jamie Raskin, Ranking Member of the Committee on the
Judiciary from the State of Maryland ................................................................ 5
The Honorable Jim Jordan, Chair of the Committee on the Judiciary from
the State of Ohio .................................................................................................. 8

WITNESSES
Scott F. Dexter, Independent Journalist
Oral Testimony ..................................................................................................... 9
Prepared Testimony ............................................................................................. 12
Dylan Hedtler-Gaudette, Acting Vice President, Policy and Governemnt Af-
fairs, Project On Government Oversight
Oral Testimony ..................................................................................................... 17
Prepared Testimony ............................................................................................. 19
Nick Shirley, Independent Journalist
Oral Testimony ..................................................................................................... 29
Prepared Testimony ............................................................................................. 31
Jennifer Larson, Chief Executive Officer and Founder, Holland Autism Center
and Clinic
Oral Testimony ..................................................................................................... 33
Prepared Testimony ............................................................................................. 35

LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING
All materials submitted by the Subcommittee on Crime and Federal Govern-
ment Surveillance, for the record ....................................................................... 57
Materials submitted by the Honorable Andy Biggs, Chair of the Sub-
committee on Crime and Federal Government Surveillance from the State
of Arizona, for the record
An article entitled, ‘‘Biden commutes sentences of 2 Illinois
megafraudsters,’’ Dec. 13, 2024, Chicago Sun Times
An article entitled, ‘‘North Dakota judge blasts Biden for setting
fraudsters free,’’ Dec. 18, 2024, North Dakota Monitor
An article entitled, ‘‘Biden commutes roughly 1,500 sentences, pardons
39 in biggest single-day act of clemency,’’ Dec. 12, 2024, Detroit
News
An article entitled, ‘‘The Illinois lawmakers furious after Biden commutes
sentences of State fraudsters,’’ Dec. 13, 2024, The National News
Desk
Not provide at the time of publication
An article entitled, ‘‘Biden clemency for convicted fraudsters met with
outrage: ‘Slap in the face,’ ’’ Dec. 17, 2024, Fox News
Not provide at the time of publication

(III)
IV
Page
Materials submitted by the Honorable Andy Biggs, Chair of the Sub-
committee on Crime and Federal Government Surveillance from the State
of Arizona, for the record—Continued
An article entitled, ‘‘Victims ‘shocked’ after Biden grants clemency to
‘kids-for-cash’ judge and $54 million embezzler,’’ Dec. 13, 2024, CNN
An article entitled, ‘‘Biden sets presidential record on pardons and clem-
ency,’’ Jan 20, 2025, Axios
Not provide at the time of publication
An article entitled, ‘‘Minnesota day-care expose journalist strikes again—
and part 2 names the ‘hub’ of the fraud wheel,’’ Jan. 21, 2026,
The Blaze
A press release entitled, ‘‘78th Defendant Charged in Feeding Our Future
Fraud Scheme,’’ Nov. 24, 2025, U.S. Dept. of Justice
An article entitled, ‘‘Suitcases filled with millions in cash flew out of
MSP airport; ex-TSA agent connects dots years later,’’ Jan. 21, 2026,
MSN
A press released entitled, ‘‘HHS Freezes Child Care and Family Assist-
ance Grants in Five States for Fraud Concerns,’’ Jan. 6, 2026, U.S.
Dept. of Health and Human Services
A press release entitled, ‘‘Six Additional Defendants Charged, One De-
fendant Pleads Guilty in Ongoing Fraud Schemes,’’ Dec. 18, 2025,
U.S. Dept. of Justice
An article entitled, ‘‘Through the years: A decade of investigating fraud
Minnesota,’’ Dec. 29, 2025, Fox 9
A press release entitled, ‘‘ICE Continues Arresting Worst of the Worst
in Sanctuary Minneapolis Including Pedophiles, Gang Members, and
Drug Traffickers,’’ Dec. 5, 2025, U.S. Department of Homeland Secu-
rity
Not provide at the time of publication
An article entitled, ‘‘TSA flags suspicious cash outflow at Minneapolis–
St. Paul Airport,’’ Jan. 21, 2026, MSN
An article entitled, ‘‘Foreign ATM? Somali cash exodus from Minneapolis
exponentially larger than other major US airports,’’ Jan. 21, 2026,
MSN
A report entitled, ‘‘Report: SBA Cutting Off Grants to Minnesota After
Nick Shirley’s Reporting on Somali Fraud,’’ Dec. 28 2025, Breitbart
Not provide at the time of publication
An article entitled, ‘‘Vance Praises YouTuber Nick Shirley Reporting
on Minnesota Fraud,’’ Jan. 21, 2026, Breitbart
An article entitled, ‘‘Walz, Omar Using ICE Operations to Distract from
Fraud Scandal,’’ Jan. 20, 2026, Breitbart
An article entitled, ‘‘In Somali fraud scandal, Republicans probe evidence
of a blue state election scheme,’’ Jan. 18, 2026, Just the News
An article entitled, ‘‘Ringleader of $250M Minnesota welfare fraud scan-
dal ordered by judge to forfeit Porsche, luxury goods,’’ Jan. 6, 2026,
New York Post
Not provide at the time of publication
An article entitled, ‘‘TSA Whistleblower: Somalis Regularly Flew Out
with Suitcases Stuffed with Millions in Cash,’’ Dec. 11, 2025,
LifeZette.com
Not provide at the time of publication
An article entitled, ‘‘Minnesota Welfare Fraud Targets Somali Hawala
Money Transfers,’’ Dec. 11, 2025, Fox News
Not provide at the time of publication
An article entitled, ‘‘Feds Probe Hundreds of Millions in Suspected So-
mali Cash in Luggage Leaving Minneapolis Airport,’’ Jan. 7, 2026,
Star News Network
Not provide at the time of publication
An article entitled, ‘‘USCIS Announces Results of Operation Twin Shield,
a Large Scale Immigration Fraud Investigation,’’ Sept. 30, 2025,
U.S. Citizenship and Immigration Services (USCIS)
Not provide at the time of publication
V
Page
Materials submitted by the Honorable Andy Biggs, Chair of the Sub-
committee on Crime and Federal Government Surveillance from the State
of Arizona, for the record—Continued
An article entitled, ‘‘Noem Says Homeland Security is Investigating
Fraud in Minneapolis,’’ Dec. 29, 2025, PBS
Not provide at the time of publication
The document 18 U.S.C. 666, entitled, ‘‘Theft or Bribery Concerning
Programs Receiving Federal Funds,’’ Cornell Law
Not provide at the time of publication
The document 18 U.S.C. 641, ‘‘Public Money, Property or Records,’’ Cor-
nell Law
Not provide at the time of publication
The document 18 U.S. Code 1001, Statements or Entries Generally,’’
Cornell Law
Not provide at the time of publication
Materials submitted by the Honorable Lucy McBath, Ranking Memer of
the Subcommittee on Crime and Federal Government Surveillance from
the State of Georgia, for the record
An article entitled, ‘‘Republicans’ Claims of ‘Fraud’ Are a Pretext for
Unpopular and Drastic Medicaid Cuts,’’ Apr. 16, 2025, Center on
Budget and Policy Priorities
An article entitled, ‘‘Trump’s Child Care Funding Freeze in Five States
Could Cost Families $400 Million,’’ Jan. 8, 2026, The Century Foun-
dation
An article entitled, ‘‘7 Ways Congress Should Sharpen Its Oversight
in 2026,’’ Jan. 13, 2026, Project on Government Oversight
Materials submitted by the Honorable Jamie Raskin, Ranking Member of
the Committee on the Judiciary from the State of Maryland, for the record
An article entitled, ‘‘Trump’s pardons forgive financial crimes that came
with hundreds of millions in punishments,’’ Jan. 20, 2026, NBC
News
An article entitled, ‘‘Arizona Has Recovered Just 5% of Taxpayer Dollars
Lost in a $2.5 Billion Medicaid Fraud Scheme,’’ May 6, 2025,
ProPublica
An article entitled, ‘‘Columbus mother and daughter among 15 indicted
in pandemic unemployment assistant scheme,’’ Aug. 22, 2025, The
Columbus Dispatch
A letter to the Honorable Robert F. Kennedy, Jr., Secretary, U.S. Depart-
ment of Health and Human Services, from Representative Bennie
Thompson, Oct. 21, 2025
A press release entitled, ‘‘Governor Walz Issues Executive Order Direct-
ing State Agencies to Take Additional Steps to Continue combating
Fraud,’’ Sept. 17, 2025, Governor of Minnesota Office
An Executive Order 25–01 entitled, ‘‘Preventing Fraud and Establishing
the Financial Crimes and Fraud Section of the Department of Public
Safety,’’ Jan. 3, 2025, Tim Walts, Governer, State of Minnesota
An article entitled, ‘‘Trump calls Somali immigrants ‘garbage’ as US
reportedly targets Minnesota community,’’ Dec. 2, 2025, The Guard-
ian
An article entitled, ‘‘5 states sue Trump administration for withholding
billions in social safety net funds,’’ Jan. 9, 2026, PBS
An article entitled, ‘‘Behind the Somali daycare panic is a mother-and-
son duo angling to be top Maga influencers,’’ Jan. 10, 2026, The
Guardian
An article entitled, ‘‘Right-Wing Youtuber Behind Viral Minnesota Fraud
Video Has Long Anti-Immigrant History,’’ Dec. 31, 2025, The Inter-
cept
A fact check article entitled, ‘‘Here’s what’s happening with childcare
fraud in Minnesota,’’ Jan. 9, 2026, The 19th News
An article enitled, ‘‘The Trump Administration Says It’s Cracking Down
On Fraud. It Gave A Red State A Pass,’’ Jan. 13, 2026, Huffington
Post
An article entitled, ‘‘Timeline: Fraud investigations stretch across Walz’s
tenure,’’ Jan. 6, 2026, NPR News
VI
Page
APPENDIX
Materials submitted by the Honorable Andy Biggs, Chair of the Sub-
committee on Crime and Federal Government Surveillance from the State
of Arizona, for the record
An article entitled, ‘‘Justice Dept. to Interrogate Tim Walz, Four Other
Top Minnesota Democrats,’’ Jan. 21, 2026, Breitbart
An article entitled, ‘‘Biden clemency list includes individuals who de-
frauded taxpayers out of millions,’’ Dec. 17, 2024, Fox News
The Executive Order 25–10 entitled, ‘‘Empowering State Agencies to Continue
Combatting Fraud,’’ Sept. 17, 2025, State of Minnesota, submitted by the
Honorable Jamie Raskin, Ranking Member of the Committee on the Judici-
ary from the State of Maryland, for the record
WHEN PUBLIC FUNDS ARE ABUSED:
ADDRESSING FRAUD AND THE THEFT OF
TAXPAYER DOLLARS

Wednesday, January 21, 2026

HOUSE OF REPRESENTATIVES
SUBCOMMITTEE ON CRIME AND FEDERAL GOVERNMENT
SURVEILLANCE
COMMITTEE ON THE JUDICIARY
Washington, DC

The Subcommittee met, pursuant to notice, at 10 a.m., in Room
2141, Rayburn House Office Building, the Hon. Andy Biggs [Chair
of the Subcommittee] presiding.
Members present: Representatives Biggs, Jordan, Tiffany, Moore,
Kiley, Lee, Knott, Cline, McBath, and Raskin.
Mr. BIGGS. Welcome, everybody, to today’s hearing, and I mean
everybody who is in here, and everybody who will come in here, is
welcome to come in here and participate, and watch, and partici-
pate orderly.
Our hearing is on fraud and theft of taxpayer dollars. I now rec-
ognize the gentlewoman from Florida, Ms. Lee, to lead us in the
pledge of allegiance.
ALL. I pledge allegiance to the Flag of the United States of Amer-
ica, and to the Republic for which it stands, one Nation, under God,
indivisible, with liberty and justice for all.
Mr. BIGGS. Thank you. I now recognize myself for an opening
statement.
Today’s hearing will examine the widespread and outrageous
amount of fraud taking place in and around Minneapolis, Min-
nesota.
Minnesota has lost billions of dollars in State administered and
federally funded programs, due to organized fraud. Fraud networks
operating in Minnesota dating back more than a decade, have sub-
mitted over $9 billion, that’s a billion with a ‘‘B,’’ in false claims.
Some high-profile cases in Minnesota include organizations and
programs such as Feeding our Future, Early Intensive Develop-
mental and Behavioral Intervention, Housing Stabilization Serv-
ices, and Integrated Community Supports. Now, we’re going to
watch a video.
[Video shown.]
(1)
2

Mr. BIGGS. Fraud within these programs have involved false
claims, fictitious providers, and services not rendered, highlighting
the need for stronger verification, monitoring, and enforcement to
protect taxpayer funds.
These fraudulent actions have robbed taxpayer funds intended to
feed children, support individuals with autism, provide housing for
low-income and disabled Americans, and deliver healthcare to Med-
icaid recipients.
Since 2021, the DOJ has charged 98 defendants in Minnesota-
based fraud cases, 85 of whom are of Somali descent. Of the 98 de-
fendants, 64 have been convicted.
DOJ has now undertaken extensive investigative action, which
includes over 1,750 subpoenas, executing more than 130 search
warrants, and conducting more than 1,000 witness interviews.
Since the start of the Trump Administration, the Federal re-
sponse to fraud in Minnesota has intensified, following a series of
high-profile cases involving State administered, federally funded
programs.
One of the initial instances of high-profile fraud in the State in-
volved the nonprofit Feeding our Future, which was at the center
of a $250 million COVID–19 related fraud scheme. As part of the
scheme, fraudsters exploited Department of Agriculture USDA food
programs designed to provide meals for children. Federal prosecu-
tors ultimately convicted 57 defendants and described the scheme
as the Nation’s largest COVID era fraud.
The issue gained renewed national attention in late December
2025, following a widely shared YouTube video posted by one of our
witnesses, Mr. Nick Shirley. Mr. Shirley’s work highlighted sus-
pected fraud in Minnesota childcare programs. His reporting
prompted Federal authorities to intensify investigations, expand
oversight, and coordinate multi-agency enforcement efforts.
A week ago today, Mr. Shirley released a second video that docu-
mented alleged fraud in the transportation industry, intended to
provide rides for children, the disabled, and the elderly. Mr. Shirley
uncovered companies with questionable addresses, and vehicles in-
tended to transport children, the disabled, and the elderly, that re-
mained idle for extended periods of time.
We look forward to hearing from Mr. Shirley about what he was
able to uncover. How did we get here? Hopefully another witness,
Scott Dexter, a former fraud investigator for the Minnesota Depart-
ment of Human Services, can shed some light on that for us.
I’d be remiss if I didn’t point out that this massive wave of fraud-
ulent activity didn’t just have the consequence of ripping off tax-
payer. It has drastically impacted legitimate organizations that are
truly helping their neighbors. Jennifer Larson is here today to
share her story about how this massive fraud has crippled her or-
ganization that serves autistic children.
We’d like to think that these fraudsters will one day face justice,
but it appears that is not always the case. For example, Yasmin
Ali, a daycare and home healthcare owner charged with stealing
millions from Minnesota taxpayers, after being granted bail dis-
appeared before a trial and has not been located since.
That was more than a decade ago. The tentacles of this fraud
ring are widespread and include crimes other than fraud.
3

For example, the aforementioned Yasmin Ali. Her brother,
Adarus Abdulle Ali, pleaded guilty in 2009 to lying to a Federal
grand jury about his knowledge of a group of young Somali men
in Minnesota, who traveled to Somali to fight with Al-Shabaab, a
foreign terrorist organization against the transitional Federal Gov-
ernment of Somalia.
We can also consider the fact that at least $700 million in U.S.
cash transported via passenger luggage through Minneapolis–St.
Paul International Airport. The incidents are all currently under
Federal investigation with the majority carried by couriers trav-
eling to Somalia, other African Nations, and the Middle East.
While no definitive links to funding terrorism have been estab-
lished yet, we know that hundreds of millions of dollars in cash are
being transported to areas where foreign terrorist organizations are
active. What could possibly go wrong?
A whistleblower has alleged that TSA personnel at MSP, Min-
neapolis–St. Paul International Airport, repeatedly identified and
flagged routine encounters with Somali men carrying large suit-
cases filled with bundled cash, often exceeding $1 million.
During an interview a former TSA agent at MSP from 2016–
2021, now a whistleblower, Liz Jacksa noted that she saw, quote,
‘‘suitcases packed with millions of dollars in cash moving through
MSP again and again, carried by the same type of couriers, which
raised questions that she feels law enforcement and political lead-
ers still haven’t answered.’’
Jacksa further explained her repeated encounters with Somali
men carrying suitcases packed with cash, and in one case, a bag
filled with new passports. According to Jacksa, the volume, consist-
ency, and profile of the transactions she witnessed were well be-
yond ordinary or everyday behavior.
Treasury Secretary Scott Bessent has noted that the Department
is currently investigating where Minnesota’s taxpayer dollars are
being placed.
Additional reports show what Somali individuals in the United
States send roughly $215 million abroad each year. On January
9th, Secretary Bessent indicated that the Treasury Department’s
Financial Crimes Enforcement Network, FinCEN, informed four
money transfer organizations that they are under investigation for
their roles in the fraud scheme involving the theft of funds from
social services in Minnesota.
He also indicated that some banks in Minnesota are being inves-
tigated by the Internal Revenue Service’s Civil Enforcement Divi-
sion for allegations related to money laundering.
As you can see, there’s much to unpack surrounding these nu-
merous fraud schemes taking place in and around Minneapolis,
Minnesota.
I would be remiss if I didn’t suggest and urge additional inves-
tigation throughout this entire country. I know that in my home
State of Arizona, our Democrat Attorney General came into office
and quickly said that there had been $2.5 million in fraud just in
the Medicaid program alone.
In recent studies released over the last year in Arizona, it has
been suggested that as much as $7.2 billion in fraud annually take
place in Arizona’s similar programs.
4

This is not just a Minnesota issue, but it just happens to be at
the forefront of why we are here today.
I look forward to today’s hearing, and I thank the Members and
witnesses for taking part. I’ll yield back and recognize the Ranking
Member, Ms. McBath, for her opening statement.
Ms. MCBATH. Thank you, Mr. Chair, and thank you for con-
vening this hearing this morning to talk about the harm that fraud
can cause.
Thank you for everyone that is here this morning to testify. It
is so necessary that we continue to investigate and prosecute all
forms of fraud, including government fraud, which can turn many
into victims.
That is because a person committing fraud against a government
program, steals from all of us as taxpayers and abuses the purpose,
the initial purpose, of these programs.
They harm the organizations that need these programs to oper-
ate and most importantly, they harm the people that the program
is designed to help.
Whether we’re talking about a program that feeds school chil-
dren, helps seniors find housing, helps people overcome addiction,
or provides services to address disabilities, it is critical that the
dollars that we invest in these programs actually serve the pur-
poses that we have in mind when we, the lawmakers, created
them.
That’s why the Department of Justice has always combated
fraud, including prosecuting dozens of people for perpetrating
fraudulent schemes in Minnesota in 2021, and under the Biden Ad-
ministration.
Prosecutions are not enough to combat or prevent fraud. The
Biden Administration also established a COVID–19 fraud enforce-
ment task force and increased oversight of programs that were
being targeted by fraudsters.
The Minnesota lawmakers have also taken steps to reduce fraud
in their State, strengthening the State’s ability to stop potential
fraud sooner and improving investigations to hold those scammers
accountable.
Where President Trump has taken a very different approach to
fraud, just last week, Trump added quite a few fraudsters to his
growing list of people that he has pardoned. Not because they are
deserving of a second chance, but because they hired his friends,
back channeled a donation, or serve his political purposes.
He has pardoned many people charged or convicted of fraud and
other financial crimes, wiping away more than $1 billion in money
that would otherwise have gone to victims of crime.
President Trump has also fired inspectors general, instructed his
DOJ to stop enforcing bribery statutes, and gutted the offices that
investigate white collar crime.
That is how we know this hearing is not really about fraud. It
is about trust. The Trump Administration does not want you to
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, they’re easier to intimidate. We cannot let that
happen.
5

We will continue to fight for robust and responsible oversight,
and for the continuation of initiatives that make all our commu-
nities safer, healthier, and more resilient.
Across the country, there are daycares, schools, hospitals, treat-
ment centers, research facilities, nursing homes, fire departments,
police departments, airports, and more, that all depend on State or
Federal funding, not just to help those in need, but to serve every
single one of us.
If President Trump succeeds an attempt to freeze childcare fund-
ing across five states, which is temporarily blocked by a court
order, the effects would ripple across families and businesses
throughout our economy. It would affect more than 500,000 chil-
dren, and these are children that are not just within the State of
Minnesota. The 500,000 children, their parents, the businesses,
and organizations where those parents work, and the many people
who depend on those businesses to fulfil needs in those commu-
nities.
That’s the fallout from just one program, addressing one need
across only five States. If President Trump continues this assault
on critical programs, the harms could be far greater.
These latest attacks come on top of the cuts that President
Trump and Congressional Republicans already forced through,
which are taking healthcare from 10 million Americans and reduc-
ing food assistance to over 40 million Americans, including many,
many children.
We don’t have to choose between programs that are susceptible
to fraud and nothing at all. With proper oversight, we can make
sure that every American is fed, that everyone can access housing
and medical treatment, and that our daycares and our schools can
keep guiding our children toward a better future.
I look forward to hearing more today about how we can achieve
this goal. I thank our witnesses for being here, and I yield.
Mr. BIGGS. The gentlelady yields back, and I’ll recognize the
Chair of Full Committee, Mr. Jordan. No, I don’t recognize him
right now, but I will recognize the Ranking Member of the Full
Committee, Mr. Raskin, for his opening statement.
Mr. RASKIN. Thank you kindly, Mr. Chair, and thank you to all
of our witnesses for joining us.
In a just world, the Judiciary Committee today would be inves-
tigating why a masked ICE agent shot three times in cold blood
and killed an unarmed citizen, a 37-year-old mom, Renee Nicole
Good. We’d be investigating why Trump’s DOJ is harassing and in-
vestigating Renee’s wife, instead of investigating her killer.
We’d be asking why ICE agents are trained in basic CPR, but
911 tapes have shown none of the agents performing CPR on Ms.
Good. They left her bleeding alone in her car for almost three min-
utes, and definitively rejected the help of a man who came forward
and identified himself as a doctor.
We’d be investigating why in another Minnesota case, ICE
agents deployed tear gas under the car of a family of eight people,
including a six-month-old, a two-year-old, and two kids with severe
asthma, who were just trying to get home from a basketball game.
The baby stopped breathing and his mom had to administer CPR
as they desperately waited for medical help to arrive.
6

Our colleagues want to talk about fraud in Minnesota. Fraud
that was already being investigated and prosecuted under the last
administration. It is true that social services fraud, serious fraud,
occurred in Minnesota. That’s why, under President Biden, the De-
partment of Justice opened multiple criminal investigations that, to
date, have already resulted in more than 90 people being charged
and 64 people being convicted of Federal criminal offenses.
Indeed, Minnesota lawmakers acted to root out and prevent
fraud going forward in the public benefits program. That’s why last
year, the Minnesota legislature passed legislation to empower the
Governor to cutoff payments or to claw back funds whenever fraud
is detected.
That’s why Governor Walz appointed the first ever Director of
Program Integrity, to make sure the State is effectively inves-
tigating and preventing fraud and corruption in their programs.
The fraud in Minnesota was discovered not by a right-wing social
media influencer who has been harassing people in communities all
over Minnesota in recent weeks, but by the hard work of real local-
investigative journalists, brave whistleblowers, and State and Fed-
eral auditors.
This fraud, which we must take seriously, is not unlike the $2.5
billion breathtaking Medicare fraud scheme uncovered last year in
the home State of the Chair of this Subcommittee, as he himself
mentioned or the massive COVID–19 unemployment assistance
fraud scheme uncovered in Chair Jordan’s home State of Ohio.
Fraud is endemic in government all over the world. There are
fraudsters attacking our public institutions trying to undermine
them and rip them off. Even our President has been convicted of
34 counts of criminal fraud by a jury of his peers in New York, re-
lated to the fraudulent payments made to porn star, Stormy Dan-
iels, and also civilly convicted in New York for different kinds of
real estate fraud.
Fraud is not headquartered in one State, or one municipality,
much less one ethnic, racial, or religious community. President
Trump couldn’t resist the temptation to use fraud in Minnesota as
an occasion to mobilize the power of the Federal Government to
bully and intimidate first- and second-generation Somali Americans
who live in that State.
Many of the people convicted in the fraud schemes were of So-
mali ancestry. Under the pretext of cracking down on a fraud that
had already been discovered, investigated, and prosecuted, Trump
surged Federal immigration officers to Minnesota and aimed them
at the Somali–American communities, calling the people who live
there, repeatedly, garbage.
This is despite the fact that it is a complete nonsequitur, obvi-
ously, to send immigration agents to conduct fraud investigations.
The deployment of law enforcement resources against an entire
ethnic community after the criminal prosecution of a small group
of its members is to promote the sinister ideas of collective guilt
and guilt by association, two doctrines that are emphatically re-
jected in Anglo–American jurisprudence and by our courts.
The community targeted in Minneapolis is made up, incidentally,
overwhelmingly of U.S. citizens. Ninety-five percent of Somalis in
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Minnesota are U.S. citizens, including 58 percent of whom were
born in the United States.
Well, what is the Trump Administration’s actual record on fraud?
Well let’s see, President Trump pardoned the big-time drug dealer
and convicted fraudster, Juan Orlando Hernandez, the former
President of Honduras, sparing him a 45-year criminal sentence
after he brought in 400 tons of cocaine into our country.
That’s 800,000 pounds of cocaine that he said, quote, ‘‘we are
going to stuff up the nostrils of the gringos.’’ Trump pardoned him.
If you’re interested in that particular sweetheart deal, that would
be a great subject for a hearing, Mr. Chair.
Just last week again, the President granted pardons to more con-
victed fraudsters. Julio Herrera Velutini was scheduled to be sen-
tenced this month for participation in a political corruption and
fraud scheme alongside his codefendant, the former Governor of
Puerto Rico, Wanda Vazquez.
In late 2024, Mr. Herrera was facing felony bribery charges in
a different case. His daughter donated $2.5 million to the MAGA
Inc., super PAC. Then, in May 2025, Mr. Herrera’s lawyer, who
had served on President Trump’s legal team, negotiated a deal al-
lowing him to plead guilty to a trivial misdemeanor offense instead.
Several months later, Mr. Herrera’s daughter donated another $1
million to MAGA Inc. What do you know? President Trump gener-
ously granted Mr. Herrera a full and unconditional pardon just last
week.
They’re making fraud out of the pardon process in America with
pay-to-play rules as they pardon recidivist, hardened, and unre-
pentant fraudsters.
Well, indeed in total, President Trump has pardoned more than
1,600 people, depriving victims, survivors, and taxpayers of an esti-
mated, check this out, $1.55 billion in restitution and fines owed
to us, the American people, while shockingly, because other Presi-
dents didn’t do this but Trump did, while shockingly allowing cor-
porate fraudsters and tax cheats to keep all their ill-gotten gains.
This is a massive and unprecedented swindle from working-class
people and crime victims, as the administration gives all these ill-
gotten gains right back to the criminal fraudsters who stole the
money in the first place.
Finally, Mr. Chair, President Trump has dismantled the infra-
structure that actually prosecutes white-collar crime and fraud in
America, actually roots out waste, fraud, and abuse. The Trump
DOJ gutted the Public Integrity Section at DOJ that prosecutes
government officials who break the law, and nearly a year ago, his
DOJ suspended enforcement of the Foreign Corrupt Practices Act,
which prohibits foreign bribery, saying all bets are off.
He’s gutted the Consumer Financial Protection Bureau, which is
the first and the only agency devoted solely, at the Federal level,
to protect American consumers against being cheated by big finan-
cial corporations. The CFPB delivered $21 billion back to more
than 200 million Americans, who were victims of fraud and other
predatory business practices, and the administration has then gut-
ted the CFPB, because they are on the side of corporate fraud and
white-collar crime.
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That’s the truth of what’s going on there. They fired 17 inspec-
tors general, the independent government watchdogs whose job it
is actually to root out waste, fraud, abuse, and corruption, and left
28 IG offices without Senate-confirmed leadership at all, allowing
the corruption and the fraud to run rampant.
If we’re going to have a hearing about fraud in America, Mr.
Chair, let’s do it. Let’s take in the full scope of what’s taking place
in our country.
I yield back to you.
Mr. BIGGS. The gentleman yields back, and I recognize the Chair
of the entire Committee, Mr. Jordan.
Chair JORDAN. Thank you, Mr. Chair. I’ll be brief. I want to
thank our witnesses for being here. Estimates are potentially as
high as $9 billion; we’re looking here at what appears to be a dec-
ade long scam and fraud.
You can always look at one program I talked about a couple
weeks ago in an oversight hearing, was this Feeding Our Future
program, where taking Federal, Americans’ hard earned tax dol-
lars, taking that money and supposedly providing meals to chil-
dren.
The problem was, there were no meals and no kids. They were
just stuffing it in their pockets. This is a great hearing to have. We
appreciate the witnesses and the work that they have done.
Ms. Larson and the work she does, and actually making a dif-
ference, doing a legitimate program. Mr. Shirley for uncovering
this, and Mr. Dexter and others who are here.
With that, I would yield back. I look forward to hearing from our
witnesses and the hearing itself.
Mr. BIGGS. Thank you, Mr. Chair. I would recognize myself just
for UCs. The first one is ‘‘President Joe Biden commutes sentences
for two of Chicago area’s most notorious fraudsters.’’
Second, ‘‘North Dakota judge blasts Biden for setting fraudsters
free.’’
Third, ‘‘Biden commutes roughly 1,500 sentences; pardons 39 in
biggest single day act of clemency,’’ including fraudsters.
Fourth, ‘‘Illinois lawmakers furious after Biden commutes sen-
tences of State fraudsters.’’
Without objection.
Mr. RASKIN. Mr. Chair, could I enter some, as well?
Mr. BIGGS. Yes, please.
Mr. RASKIN. Thank you much. This UC request is from ABC
News, January 20, 2026, titled, ‘‘Trump’s pardons forgive financial
crimes that came with hundreds of millions of dollars in punish-
ment.’’
This one is, ‘‘Arizona has recovered just 5 percent of taxpayer
dollars lost in a $2.5 billion Medicaid fraud scheme,’’ that’s from
ProPublica.
From the Columbus Dispatch. ‘‘Columbus mother and daughter
among 15 indicted in pandemic unemployment assistance fraud
scheme.’’
Finally, a Minnesota fraud scheme timeline from NPR News,
‘‘Fraud investigations stretched across Walz’s tenure.’’
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Mr. BIGGS. Without objection. Now, without objection, all the
opening statements will be included in the record, and we will in-
troduce today’s witnesses.
Mr. Scott Dexter. Mr. Dexter is a former law enforcement officer
having served for 28 years. He also served with the Minnesota De-
partment of Human Services, Office of Inspector General, where he
investigated fraud in the childcare assistance program. Thank you
Mr. Dexter, for being here.
Ms. Jennifer Larson. Ms. Larson is the Founder and Chief Exec-
utive Officer of the Holland Center for Autism, a clinic that pro-
vides services to children and young adults with autism.
She started the Holland Center to serve families like hers that
were not receiving adequate services and support elsewhere. Thank
you, Ms. Larson, for being here today.
Mr. Nick Shirley is an independent journalist. His recent inves-
tigations and videos have shed light on the scale of fraud in public
benefit programs in Minnesota that are currently ongoing, and
thank you Mr. Shirley, for being here.
Mr. Dylan Hedtler-Gaudette. Mr. Hedtler-Gaudette is the acting
Vice President of Policy and Government Affairs at the Project on
Government Oversight (POGO).
POGO is a nonprofit organization that investigates alleged
wrongdoing by the Governor. Thank you, Mr. Hedtler-Gaudette, for
being here with us today.
We welcome all our witnesses and thank them for appearing
today. We will begin by swearing you in. Would you please rise and
raise your right hand?
Do you swear or affirm under penalty of perjury that the testi-
mony you are about to give is true and correct to the best of your
knowledge, information and belief, so help you God?
Thank you. Thank you, you may be seated.
The record will reflect that the witnesses have all answered in
the affirmative, and with the instruction of Mr. Hedtler-Gaudette,
I wanted to let all Members of the panel know that when you have
a question for him, please say his name so he knows that you are
addressing him, please.
I want the witnesses to know that your written testimony will
be entered into the record in its entirety. Accordingly, we ask that
you summarize your testimony in five minutes.
We’ll begin now with Mr. Dexter. You are recognized for your
five-minute statement.
STATEMENT OF SCOTT F. DEXTER
Mr. DEXTER. Thank you. Chair and the Members of the Com-
mittee, thank you for the opportunity to speak with you today. My
name is Scott Dexter, I’m a retired law enforcement investigator
with 28 years of experience.
Most of it was spent conducting criminal and financial fraud in-
vestigations, with experience in surveillance in operations.
In 2013, after retiring from law enforcement, I joined the Min-
nesota Department of Human Services as part of a newly created
investigative unit within the office of Inspector General.
Our mission was straightforward, identify and investigate fraud
within the childcare assistance program known as CCAP.
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I was one of the original four investigators hired, all of us were
former law enforcement professionals with backgrounds in criminal
investigations.
Our cases were not selected based on the name of the center, the
owner, or the community it served. They were selected based solely
on tips, complaints, and the amount of CCAP funding being paid
out.
The highest funded centers were reviewed first. Many of those
centers were referred to us through the public tip line, or by licens-
ing inspectors who observed activity inconsistent with a legitimate
daycare operation.
What we found was deeply concerning. Many of these centers op-
erated out of commercial spaces with windows totally covered, no
visible play areas, and very few children ever present.
Through surveillance, data collection, and review of attendance
and billing records, we repeatedly documented patterns of over bill-
ing, nonexistent attendance, and in some cases, children being
signed in for hours they were never actually at the center.
Our investigative process was thorough and methodical. We col-
lected licensing and billing data, installed covert surveillance cam-
eras, reviewed hours of video, identified parents and employees,
and calculated estimated overpayments based on actual attend-
ance.
Completed cases were then turned over to the Minnesota Bureau
of Criminal Apprehension for search warrants, interviews, arrests,
and potential prosecution.
As our investigations progressed, we noticed a trend. Many of the
centers receiving the highest levels of CCAP funding were owned
and operated by Somali individuals, and the families served were
predominantly Somali.
This was not the basis for selecting cases, but it did become the
basis for accusations against us. We were labeled as racially bi-
ased, despite the fact that our case selection was driven entirely by
funding data.
An outside review was launched into our investigative practices.
We were questioned about how we selected centers, and how we
conducted surveillance.
Following that review, new restrictions were placed on our work,
including mandatory panel reviews before we could move forward
with investigations.
Investigators were also pulled from conducting new or current in-
vestigations to enter data from all previous complaints received by
DHS, into a newly created database, a process that took nearly a
year to complete.
These changes significantly hindered our ability to do our jobs ef-
fectively. Ultimately, in 2019, I chose to retire because the inves-
tigative process had become so constrained that meaningful work
was no longer possible.
Through collaboration with Federal agencies including the IRS
Criminal Investigation Division, Homeland Security, and the U.S.
Department of Health and Human Services, we learned that mil-
lions of dollars in cash from the Somali community was being flown
out of the Minneapolis–St. Paul airport by Somali couriers.
11

At one point, nearly $70 million had been documented leaving
the country halfway through a single year.
Although we could not prove that the cash was obtained fraudu-
lently, we strongly suspected that it was.
We also encountered situations where Federal partners were pre-
vented from opening cases due to concerns about political sensitivi-
ties surrounding the Somali community, and the refugee resettle-
ment program.
These decisions had real consequences, allowing fraud to con-
tinue unchecked.
Throughout our work, we identified several loopholes that made
CCAP highly vulnerable to fraud. Centers were allowed to bill for
the full authorized hours, even when children were present for only
minutes.
Billing records could be submitted up to 30 days later, creating
opportunities for manipulation. Attendance records were hand-
written, unreliable, and often incomplete.
Despite our recommendations, no biometric attendance systems,
no electronic submission requirements, and no State installed secu-
rity cameras, were ever implemented.
Chair and the Members, the purpose of my testimony is not to
cast blame on any community. It is to highlight systemic weak-
nesses that allowed large-scale fraud to occur, and to emphasize
the need for stronger safeguards, better oversight and investigative
processes that are allowed to function without political inter-
ference.
Thank you for your time and your commitment to ensuring ac-
countability within publicly funded programs, and I am prepared
to answer any questions that you may have.
[The prepared statement of Mr. Dexter follows:]
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Mr. BIGGS. Thank you, Mr. Dexter. Now, we’re going to recognize
Mr. Hedtler-Gaudette, for your five minutes of opening statement.
STATEMENT OF DYLAN HEDTLER-GAUDETTE
Mr. HEDTLER-GAUDETTE. Chair Biggs, Ranking Member McBath,
and the Members of the Subcommittee, I appreciate the oppor-
tunity to testify before you today on the important issues of pre-
venting fraud, and protecting taxpayer dollars.
My name is Dylan Hedtler-Gaudette, and I am the Acting Vice
President of Policy and Government Affairs at the Project on Gov-
ernment Oversight.
We are a nonpartisan independent watchdog that promotes a
more accountable, transparent, and effective Federal Government.
We view it as our mission to combat abuse of power and corrup-
tion in the Federal Government, which includes working on rooting
out waste, fraud, and abuse.
The unfortunate truth is that fraud in government programs is
a fact of life. Since the U.S. Government has existed, fraud in gov-
ernment has also existed.
For much longer than that, in fact. For as long as human beings
have been organizing ourselves into societies and building institu-
tions to govern those societies, there have always been those who
will seek to take advantage.
This is a harsh, but real truth related to the human condition,
related to our fundamentally fallen and flawed natures.
That said, it is still incumbent on every one of us to do what we
can to prevent fraud, and to hold perpetrators of fraud accountable.
This is especially true when fraud implicates hard earned tax-
payer dollars, and critical public programs and services. This is
true whether we’re talking about fraud in the context of the Feed-
ing Our Future program, or any other program in Minnesota.
Whether we’re talking about welfare fraud in Mississippi, which in-
volved the participation of a world-famous Hall of Fame NFL quar-
terback.
This is true whether we’re talking about fraud in the context of
it being perpetrated by large multinational defense companies in
the context of multibillion dollar contract they have with the De-
fense Department.
The point here is that fraud and the abuse of taxpayer dollars
are not related to any particular geographic, demographic, or other
boundary or characteristic.
Why do these things happen so much? Mostly, they are caused
by deep structural flaws, gaps, and weaknesses in our system of
government.
They’re also driven by recalcitrance and resistance to change on
the part of Federal agencies.
To put it shortly, fraud is a systemic problem, and it requires
systemic solutions. What are these solutions? I’m pleased to share
a few of them with you today.
We must first look at watchdogs, critical sources of information,
and practitioners of oversight from within the Federal Government
itself.
I’m specifically talking about inspectors general, the Government
Accountability Office, and whistleblowers. Rather than attacking,
18

firing, undermining and intimidating these individuals and entities
as this administration and its allies have done, we must strength-
en, preserve, and protect them.
We must enact reforms to make sure that IGs and GAO can per-
form their duties effectively and independently, and we must add
additional safeguards to make sure that whistleblowers can blow
the whistle without fear of reprisal, or retaliation.
We must also take a long, hard look at the architecture currently
in place for how we track, monitor, analyze, and assess Federal
funding.
To put it bluntly, that architecture is broken. Key resources like
USAspending.gov are in desperate need of overhaul and moderniza-
tion.
We need to enhance and improve the quantity, quality, timeli-
ness, and integrity of the data and information we collect on Fed-
eral funding.
We need to promote more accountability, transparency, and com-
pliance mechanism within the chain of spending for Federal fund-
ing.
If we don’t do this, we will never have a good grasp on where
funding is going, where it’s ending up, who is being helped by it,
who is being missed by it, and what the ultimate impact is.
Last, we must enact robust reforms and vigorous enforcement to
crack down on corruption, cronyism, and conflicts of interest, which
turbo charge waste, fraud, and abuse in the Federal Government.
The Presidential Pardon is an acute example of this, with each
of the last two administrations using the pardon power inappropri-
ately to pardon convicted fraudsters.
We must also promote reforms to crack down on the revolving
door between agencies and industries, and to head off pay-to-play
politics, all which distort and corrupt decisions like the award of
Federal contracts.
The takeaway here is simple. Focusing on individual salacious,
scandalous examples of fraud is akin to looking at the symptoms
and not looking at the disease or the root causes of the disease.
The Project on Government Oversight stands ready, willing and
able to work with anyone here who wants to work on root causes
and systemic solutions, so that we can actually get our hands
around waste, fraud, abuse, and corruption in the Federal Govern-
ment.
Thank you for having me here today, and I look forward to an-
swering your questions.
[The prepared statement of Mr. Hedtler-Gaudette follows:]
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Mr. BIGGS. Thank you, Mr. Hedtler-Gaudette, and I forgot to
mention. When you have about 10 seconds left, I will just tip that
so you will, so everybody will know that as well.
Mr. Shirley, you’re recognized for your opening statement.

STATEMENT OF NICK SHIRLEY
Mr. SHIRLEY. Awesome. I’m here today to speak on behalf of all
hard-working, law-abiding taxpaying citizens here inside of the
United States.
I’ve helped bring to light widespread fraud that’s happening in-
side our Nation, and we the people, have had enough of our hard-
earned money going toward fraudsters as if it’s no big deal.
As I speak here, I want to ask everyone a question. How much
do we trust when we pay our taxes, it’s going to benefit our Na-
tion?
People erupted during the Boston Tea Party over just a few per-
centages as they believed they were being taxed without represen-
tation. Nowadays, we have the representation, but do we trust our
representatives?
My name is Nick Shirley, and I made a 41-minute video that I
posted on platforms like X and YouTube. My video received over
100 million views, and it created instance change within our gov-
ernment.
As the Federal Government launched investigations in depart-
ments such as Health and Human Services, froze over $185 million
in childcare funding, until businesses can prove they are legitimate
businesses.
I actually became aware of the fraud that was happening in Min-
nesota in June 2025, as I was there for a separate video and Min-
nesotans started reaching to me asking if I was making a video on
the fraud.
I said well, what fraud? This lady, she was a real estate agent
and she says well, I’m having a hard time selling my properties be-
cause people are curious about these assisted livings that are pop-
ping up next door to some of the houses that we’re buying, or the
home healthcare clinics that are popping up. We don’t know who
is next to these houses that we’re trying to sell.
I said well, I’m not going to come and make a video if I don’t
have any proof. Therefore, I left Minnesota, and I continued to look
for fraud in the best way I could.
As I was getting my own information, a man by the name of
David reached out to me and he said hey, I have been investigating
this fraud for years now.
I have been driving by these childcare centers. I have never seen
a single child, and I have received information from the State of
Minnesota as to how much money these places are receiving.
I said great, let me come to Minnesota and we’ll make this video
about potential fraud that was taking place inside of Minnesota.
We go to a daycare and I’m instantly surprised by what we see.
We arrived, and it was an industrialized building, and there was
two daycares registered at that daycare—at that building.
The first thing I noticed is all the windows are blacked out, and
there’s no footprints in the snow of any children. There are no play-
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grounds, or anything that would make it look like it was a
childcare.
Above me a sign read, open 7 a.m. to 10 p.m., but there is nobody
there. The doorbell did not even work.
Then, we continued to go to other daycares and we noticed the
same pattern. No children, blacked out windows, and one daycare,
a learning center, spelled ‘‘Quality Learing Center,’’ instead of
‘‘Quality Learning Center.’’
They had received $1.9 million, yet with that $1.9 million, they
could not even spell learning right on their sign.
Government Walz has said he’s been fighting fraud in Minnesota
since 2019, and said the buck stops with him. However, how long
would it take for you to notice $1 million being—leaving your bank
account and not knowing where it’s going? That’s essentially what
had been happening in Minnesota for years as billions of dollars
have been misplaced.
Meanwhile, while people like Governor Tim Walz call people like
me a White supremacist delusional conspiracy theorist, he actually
decided to drop out of reelection because I believe, of how deep and
extensive this fraud is.
Thank you very much. Since my reporting, the HHS department
froze over $185 million and to this day, not a single business has
been able to prove proof of legitimacy.
How fast would you be proving that you are a legitimate busi-
ness if you have children to actually feed and to take care of? You’d
be sending that paperwork instantly.
I made this video to document the widespread fraud that has
been taking place as I truly believe all fraud is bad. People like me,
my generation, we’re sick of seeing tax dollars go toward fraud.
We just want to have the same opportunities that our fathers
and our grandparents had, and when you see people making mil-
lions of dollars by committing fraud, it upsets everybody from all
age demographics.
I hope today we can have a good conversation, and we can all
agree that fraud is bad, and that fraud is fraud, and I wish the
best for our country, and that’s what needs to be happening is to
crack down on all forms of fraud.
Thank you for having me and God bless the USA.
[The prepared statement of Mr. Shirley follows:]
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Mr. BIGGS. Thank you, Mr. Shirley. Now, I recognize Ms. Larson
for your five minute opening statement.
STATEMENT OF JENNIFER LARSON
Ms. LARSON. Chair, Ranking Member, and the Members of the
Committee, thank you for allowing me to speak today on this issue.
My name is Jennifer Larson, I am the Founder and CEO of Hol-
land Center in Minnesota. I have been an autism provider for over
20 years and started the organization for my son.
I built Holland Center because families with children like mine,
were desperate for help. Desperate for services and stability; des-
perate for somewhere they could trust their child would be sup-
ported and helped.
Not sent home on a bad day; not babysat in a classroom and for-
gotten. We serve the children that don’t succeed in public school
settings.
What started as a small program grew over two decades into four
locations that families rely on not just for therapy, but for hope,
routine, and survival.
This work is a labor of love for me. Just like me, there are pro-
viders all over the State laboring with love to help these children.
In this week, Holland and other programs all over Minnesota are
collapsing. Not because we committed fraud, but because a crime
ring was allowed to operate inside Minnesota’s service system, and
the government’s clumsy response is now destroying legitimate
long-standing providers, and devastating families that we serve.
Families come to Holland; they do not have a backstop. Their
children often receive 30 or more hours of therapy a week. These
are not an extravagance; these are medically necessary.
These children learn to communicate, regulate their emotions, re-
duce dangerous behaviors, and function in daily life.
For many parents, therapy determines if they can work. Con-
sistent staff and therapy prevent severe behaviors and regression.
Structured care keeps children and their siblings safe.
When services disappear, families do not just simply adjust. They
face a crisis. For more than two decades, Holland has served hun-
dreds of children year after year, employed hundreds of clinicians
and staff.
Operated under yearly on sight audits, inspections, and docu-
mentation oversight. Delivered real services to real children every
day.
We have always complied with everything the system required.
Yet, within the last month, the State has withheld over $400,000
in Medicaid funds for my own program, and that number grows
every single day.
I had to infuse my personal funds to survive these weeks, but I
can’t do that any longer without payment.
Let me be clear. We are a fee-for-service industry. When we can’t
pay our staff, we lose our staff and children lose care.
Families do not lose appointments; they lose the people they
trust. What happened in Minnesota had nothing to do with the eth-
nical, longstanding autism providers.
What happened was organized criminal networks that exploited
autism services by opening fake centers, billing for children that
34

did not exist, billing for services never delivered, and stealing mil-
lions of taxpayer dollars in the process.
These are not minor compliance issues. They are criminal enter-
prises. Families trusted that the government was protecting the in-
tegrity of the system. It failed.
Now, instead of doing the obvious thing and targeting criminal
actors, the response has been to freeze everyone’s payments.
That decision does not punish the criminals; it punishes innocent
children and families.
As Medicaid payments are delayed due to prepayment review by
an insurance company that is in the business of denying claims,
providers are reducing hours, cutting staff, and starting to close.
Families are scrambling for alternatives that don’t exist. Chil-
dren are regressing; parents are leaving jobs to care for their dis-
abled children.
Autism therapy cannot be paused without consequences. Loss of
services can erase years of progress in weeks, and abrupt disrup-
tion of services can cause life-long consequences in these children.
This is not abstract harm. It is daily trauma for families already
carrying an extraordinary burden.
The simple solution to the problem is to send the criminals to jail
and allow trusted providers with decades of clean audits and
verified ownership structures to continue providing prescribed, eth-
ical therapy, and go back to paying them what we’ve earned, and
resume paying them on time.
I built Holland for 20 years. Families built their lives around the
care that we provide. All of that is risk of destruction today.
Not by fraud, but by clumsy government response that failed to
distinguish between criminals and caregivers. It treats children
with disabilities—
Mr. BIGGS. The gentlelady will suspend. We’ve got a photog-
rapher there. We allow photographers in here, but not between the
panel—the witnesses and the Members. You will please move. Pho-
tographer, please move.
Ms. LARSON. OK, thank you.
Mr. BIGGS. Like, right now.
Ms. LARSON. OK, we are sorry.
Mr. BIGGS. We will—
Ms. LARSON. All of that is at the risk of destruction—sorry, can
I continue?
Mr. BIGGS. Yes, please continue.
Ms. LARSON. Not by fraud, but by the clumsy government re-
sponse that fails to distinguish between criminals and caregivers.
It treats children with disabilities as acceptable collateral damage.
Fraud must be stopped and criminals prosecuted.
I’m a taxpayer, and I live in Minnesota. This is disgusting. Fami-
lies and children should never pay the price for government failure.
Thank you.
[The prepared statement of Ms. Larson follows:]
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Mr. BIGGS. We will now proceed under the five-minute rule with
questions. The Chair recognizes the gentleman from Wisconsin, Mr.
Tiffany, for five minutes.
Mr. TIFFANY. Thank you, Mr. Chair. Besides the work Mr. Shir-
ley has done, I want to recognize Power Line, who has done yeo-
man’s work, exposing this over the last decade as to what has hap-
pened.
I just want to say, Ms. Larson, I live in Northern Wisconsin.
There is an autism school that was started in my community.
Where did we visit when we wanted to start that a decade ago?
We came to Minnesota where you have been leaders in having good
autism programs.
I think about the tremendous fraud that has gone on in nutrition
programs, housing programs, but is there anything more heinous
than abusing an autism program?
Ms. LARSON. I can’t imagine. It’s so hard to believe that people
are faking that children have autism and stealing money from the
government.
When I’m sitting here with my 25-year-old nonspeaker, and now
children like my son aren’t going to have services because they
stole money from the government and faked these things.
It’s just, it is like I said, ‘‘disgusting.’’
Mr. TIFFANY. With what’s going on right now, what are the fami-
lies that you’re serving, what are they saying?
Ms. LARSON. They’re scared.
Mr. TIFFANY. What are they doing?
Ms. LARSON. Everybody’s scared. There are centers or programs
that have already shutdown. Staff are leaving. This week, I asked
my staff who will take unpaid leave because we can’t keep going
like this.
Like I said, I’m $400,000 plus in debt now, and I’m not assured
these are going to get paid back. I went to a bank, and they
wouldn’t back the receivable because they said that’s not a receiv-
able. If it’s prepayment review, you may not get it.
Mr. TIFFANY. Ms. Larson, none of this would have happened if
fraud has not occurred, is that accurate?
Ms. LARSON. Yes.
Mr. TIFFANY. Mr. Dexter, could something been done about this
earlier?
Mr. DEXTER. Yes. As I stated in my opening testimony, in the
years that I worked there, we identified how fraud was occurring,
the loopholes that existed. We brought—
Mr. TIFFANY. What were some of the warning signs, Mr. Dexter?
Mr. DEXTER. Well, the fact that part of our job was to go and col-
lect attendance records. We would find attendance records that
were either incomplete or nonexistent.
Obviously, there were times we found them to be fabricated be-
cause they were given to us way later. The same with billing
records.
They were allowed 30 days after the end of the billing period to
submit billing records. They were not immediately available to us.
It kind of allowed overpayments or double payments to be over-
looked.
40

We had the attendance record issue. We had the fact that there
was no way to verify who was signing the children in and out. No
way to verify what times those children were signed in and out.
Mr. TIFFANY. Could I do a followup here? In Wisconsin, we
learned this month that Ibrahima Diop, a Minneapolis school fi-
nance boss, placed on leave for failing to submit required financial
paperwork with the Minneapolis School District and for signing
questionable contracts linked to the Somali fraud scandal, was
hired by the Milwaukee Public School System as a deputy super-
intendent at a salary of $240,000 a year.
Do you think it wise, might that be a warning sign that this per-
son was involved, may have been involved with fraud in Min-
neapolis? Shouldn’t they be concerned in Wisconsin that this is
going—that they’re hiring someone like that?
Mr. DEXTER. Well, if somebody that they hired has a past history
and practice of doing that type of stuff, I would be very leery of it
occurring again, or that being the basis that they’re hired.
Mr. TIFFANY. Governor Evers refused to open the books and is
blocking Federal audits of our food stamp and Medicaid programs,
and he also vetoed four auditor positions in a recent budget. Do you
think that is also a warning sign?
Mr. DEXTER. Yes, if it’s preventing—
Mr. TIFFANY. Or ill advised? Would that be a better way to pose
the question?
Mr. DEXTER. Yes, if it prevents the oversight and the ability to
audit and look at the records to make sure it can have a check-and-
balance system, that would be very unwise because again, that al-
lows fraud to occur.
Mr. TIFFANY. Because Mr. Shirley, what is happening in Min-
nesota, it could be happening throughout the United States, isn’t
that correct?
Mr. SHIRLEY. Correct.
Mr. TIFFANY. If there’s one thing we’ve learned or ‘‘leared’’ as
said in Minneapolis, isn’t it possible that this is happening every-
where?
Mr. SHIRLEY. Yes, I believe it is.
Mr. TIFFANY. Mr. Chair, I yield back.
Mr. BIGGS. The gentleman yields. I now recognize the Ranking
Member of the whole Committee, Mr. Raskin, for his five minutes
of question.
Mr. RASKIN. Thank you very much, Mr. Chair. I thank all the
witnesses for your excellent testimony. Mr. Hedtler-Gaudette, ad-
ministration is systematically undermined government oversight.
The President has fired more than a dozen inspectors general,
not for any cause but seemingly just in retaliation for doing their
jobs and to block unwanted investigations.
President Trump has defunded the Counsel of Inspectors General
on Integrity and Efficiency. He’s removed independent leadership
at the Office of Special Council and the Office of Government Eth-
ics. Blockading whistleblowers and numerous investigations.
What is your assessment, Mr. Hedtler-Gaudette, of the Trump
Administration’s apparent systematic opposition to internal over-
sight mechanisms in the Federal Government?
41

Mr. HEDTLER-GAUDETTE. Thank you, Ranking Member Raskin.
My assessment is that the last year or so has been one of the most
antioversight and antiaccountability periods that I have witnessed
in our Federal Government.
The things you laid out as well as others, are the sort of proof
in the pudding there. Speaking of things that should be giving us
pause and raising red flags, that should all be giving us serious
pause and raising serious red flags about how seriously people who
claim to take oversight and accountability fraud, how seriously do
they actually take it?
Mr. RASKIN. There’s been a lot of attention given to Donald
Trump’s extraordinary use of pardon power, as in the pardon of
violent insurrectionists and cop beaters.
There’s also been a forgiveness of a billion and a half dollars in
restitutionary fines that various people had to pay.
A lot of them are fraudsters. The DOJ in Trump’s first term,
brought bank fraud and tax evasion charges against reality TV
stars Todd and Julie Chrisley.
They were convicted in 2022. They owed more than $22 million
in restitution to taxpayers and to their victims. Then, Trump sud-
denly, inexplicably pardoned them and forgave all the money that
they were supposed to be paying back to their victims.
Todd Chrisley bragged publicly about his get out of jail free card,
jubilantly exclaiming the Feds got F’d.
Let me give you one other example. Trump on April 23rd, issued
a pardon for Paul Walczak, a former nursing home executive who
pleaded guilty to multiple tax crimes.
What he was doing was taking millions of dollars from the
nurses, orderlies, and doctors who worked for him at his facilities,
took more than $10 million that way.
Instead of giving it to the IRS for their taxes, he used the money
to buy a $2 million yacht, and to pay for high-end jet travel, and
to go shopping at Bergdorf–Goodman and Cartier.
Well, he was sentenced to 18 months in prison for stealing his
tax, his employees’ tax withholdings, and he was ordered to pay his
employees back $4.4 million for the money he looted from their ac-
counts.
He was going to have to pay that back, but then he got his mom
to go do a glitzy fund-raising dinner for Donald Trump at Mar-a-
Lago.
She paid $1 million for her ticket. Then, right after Trump was
inaugurated in his second term, Walczak petitioned for a Presi-
dential Pardon arguing that he was the victim of political retalia-
tion because they were Trump supporters.
What do you know, President Trump issued a complete pardon
with forgiveness of all the financial fines and restitution, that Mr.
Walczak was going to have to pay back to his workers, the nurses,
doctors, and orderlies.
That was forgiven. That was $4 million taken away from the vic-
tims of a fraud and given back to the perpetrator of the fraud.
OK, now if we had all day, we could go on all day with this be-
cause that’s how their pay-to-play pardon system works.
42

What does this do to our efforts to root out fraud and corruption
systematically in the government, in crimes, and in different indus-
tries?
Mr. HEDTLER-GAUDETTE. I think it provides a perverse incentive
structure. I opened my statement by saying that we all have an ob-
ligation and a responsibility to do what we can to prevent fraud
and to hold perpetrators of fraud accountable.
That last bit, holding a perpetrator of fraud accountable perhaps
via conviction, doesn’t mean much if all one needs to do is con-
tribute to the right super PAC, or attend the right fund raiser and
suddenly that accountability and that conviction is wiped away, in-
cluding the financial restitution you mentioned.
Those kinds of actions are at direct cross purposes with any ef-
fort to promote a broader, more systemic approach to rooting out
waste, fraud, and abuse.
Mr. BIGGS. The gentleman’s time is expired.
Mr. RASKIN. Thank you very much, and I yield back.
Mr. BIGGS. The Chair recognizes the Chair of the Full Com-
mittee, Mr. Jordan.
Chair JORDAN. Thank you, Mr. Chair. Mr. Dexter, let me make
sure we get this right. You get tips and complaints. Whistleblowers
or others come to you and tell you something is not right at these
childcare centers in your State that are getting all kinds of tax-
payer money. Is that right? That’s how it started?
Mr. DEXTER. That is correct.
Chair JORDAN. Then, you go and do your work? You have got 28
years’ experience investigating things and specifically in the crime
and financial fraud area, is that right?
Mr. DEXTER. That is correct.
Chair JORDAN. You go out and find these childcare centers, there
aren’t any kids. No kids are there. There are some, but it is like
you don’t see the playground. You don’t see any kids at a place
where they are supposed to be helping children. Then, you also find
out most of them are run by Somali individuals. Is that accurate?
Mr. DEXTER. That is correct.
Chair JORDAN. Then you make some recommendations. You said
here is what we should do. I think you put this on page 2 of your
testimony. You said there are some basic things you should do. You
said they didn’t have a biometric attendance system. They should
do that. They should have electronic submission requirements.
They need security cameras. You made some recommendations.
Mr. DEXTER. Yes.
Chair JORDAN. Then what happened?
Mr. DEXTER. Nothing.
Chair JORDAN. They ignored your recommendations. It didn’t
stop there, did it? They ignored your recommendations. They called
you a racist, right?
Mr. DEXTER. Correct.
Chair JORDAN. Typical Left. I always say the Left. Well, the Left
will tell a lie. Big media will report it. You tell the truth. They call
you a racist. Exactly what happened here.
They ignore your recommendations. They call you a racist, but
it even got worse than that if you can imagine. They started inves-
tigating you, is that right?
43

Mr. DEXTER. Yes, we were interviewed by an outside firm for a
report given to the Office of Legislative Auditor.
Chair JORDAN. What did that report look like? What did they
say? Did they call you a—what did the report say?
Mr. DEXTER. The report basically questioned our investigative
tactics, looked at how our unit was managed.
Chair JORDAN. Even though you had 28 years’ experience in this
particular area, tips and whistleblowers came to you, even though
that was a whole catalyst for doing it?
Mr. DEXTER. Correct.
Chair JORDAN. Yes. OK. The end result is what? The end result
is Ms. Larson, who is actually helping people, she suffers and the
people she helps suffer. Isn’t that right, Ms. Larson? Not to men-
tion the fact that taxpayers are getting ripped off, but the people
who do good work, who actually help people, you suffer.
Ms. LARSON. The disabled are paying for the money stolen.
Chair JORDAN. Yes. Why do you think all this is the case? All of
this brings to me that this seems to be a typical pattern.
In the end, you have got to ask why. When you point out what
is going on, you have good people doing good work who suffer. The
taxpayers are getting ripped off. Someone has got to ask, well, why
did they take the—not follow your recommendations, call you a rac-
ist? Investigate you instead of just fixing the problem. Why did
they do that? What could be the answer? Does anyone want to haz-
ard a—Mr. Shirley, do you want to hazard a guess why that is the
case?
Mr. SHIRLEY. Well, they simply use that as a deflection technique
to make you not want to speak out against the fraud.
Chair JORDAN. Yes, it seems to me it is politics. Do you think it
is politics, Mr. Dexter?
Mr. DEXTER. Yes, I do.
Chair JORDAN. Yes, the people at the top, well, don’t want to do
this. We don’t want to be called racist. In fact, we found that out
a week ago in a hearing where we were looking at this Feeding
Our Future Program.
We found out they actually shut that program off for a while.
They said time out. Something is not right here. They found the
same kind of things you found, Mr. Dexter. They said we are going
to stop payment and then it was restarted. The reason it restarted
is because they threatened a racial discrimination lawsuit against
the authorities there in Minnesota.
OK. Forget about the fact that if we do this, we restart the
money, we are going to hurt good people like Ms. Larson and the
people she helps and rip off the taxpayers. We are going to do it
all for politics.
We also found, interestingly enough, the Attorney General of
Minnesota was at a meeting with the key folks in this particular
program and then they found out a couple weeks later they start
sending him campaign contributions. It is politics. It is politics
driving it all.
That is why it is appropriate we are investigating here at the
Congressional level. That is why it is appropriate that the Depart-
ment of Justice has put in place a specific individual to focus on
this not only in Minnesota but around the country.
44

I talk too much. Anyone else wants to—I will give Mr. Shirley
and Ms. Larson a chance to say anything you want. If not, I will
yield 28 seconds to our Chair. I will 20 seconds, the remaining of
my time to the Chair.
Mr. BIGGS. Mr. Hedtler-Gaudette, would it surprise you that Joe
Biden issued pardons to someone named Crundwell, who had the
largest municipal fraud in the country’s history and had a restitu-
tion amount of $53.7 million that was never paid on the commuta-
tion. Would that surprise you, sir?
Mr. HEDTLER-GAUDETTE. That would not surprise me. Actually,
in my written statement, I outlined how pardons under the last ad-
ministration, the Biden Administration, they also fall under the
same pattern of pardoning convicted fraudsters. I am in agreement
with you there.
Mr. BIGGS. Thank you. Without objection—that time has expired.
Without objection, Mr. Cline will be permitted to participate in to-
day’s hearing for the purpose of questioning the witness if a Mem-
ber yields in time for that purpose.
Now, we are going to go to Mr. Moore from Alabama.
Mr. MOORE. Thank you, Mr. Chair. All this talk about pardons
and the ultimate shyster, one of them was Hunter Biden. He got
pardoned after Joe promised he wasn’t going to do that on the way
out. Anyway, that is another pardon for another day.
Ms. Larson, I am impressed with your son. I honestly thought he
was your attorney when you guys were sitting there. Were there
early warning signs that could have been acted on that could have
prevented the fraud schemes from growing to the scale that we see
now?
Ms. LARSON. I would say yes. Looking back, the Somali commu-
nity in Minnesota has a high prevalence of autism. I know that be-
cause I serve a lot of minorities in my centers. When these centers
started popping up, I thought good for them. I took care of my son.
We have had a waiting list for five years. I thought it was a posi-
tive.
Then, it just started to go and go to where now it is 400 plus of
these. I had started—and I didn’t Nick Shirley it—that is a verb
now, and go out and see because obviously, I am busy and that is
not what I have time for.
There were a lot of early warning signs. If anyone was actually
paying attention—
Mr. MOORE. They would have caught it.
Ms. LARSON. Oh, 100 percent.
Mr. MOORE. How long have you been in business, 20 years, is
that—
Ms. LARSON. Over 20 years.
Mr. MOORE. You went through a number of audits every year,
right?
Ms. LARSON. Every year, onsite.
Mr. MOORE. How is it that these groups are getting away with
it and you are under the thumb of the government auditing you
every year. Why do you think that is?
Ms. LARSON. Either there is a double standard, and they don’t,
for whatever reason, have the same expectations that we do or they
are just—
45

Mr. MOORE. Chair was on to something, maybe it is politics.
Ms. LARSON. Yes.
Mr. MOORE. Mr. Shirley, now I guess investigative journalist now
known as Right-wing social media influencer, so can you confirm
how many daycare centers you personally visited in Minnesota dur-
ing your investigation?
Mr. SHIRLEY. During that first video, we went to around seven.
Mr. MOORE. How did you select those facilities? I know you said
earlier, ‘‘footprints in the snow.’’ How is it that you identified those
facilities to go to initially?
Mr. SHIRLEY. The man, David, in the video, he had the daycares
with the CCAP funding. We just simply drove around Minnesota
and around the Minneapolis area.
Mr. MOORE. It took a lot of courage to do that I would imagine,
probably more so now than what it was when you initially did it.
A hundred million views you said?
Mr. SHIRLEY. Yes, over 140 million views on that.
Mr. MOORE. What was Mr. David’s background? How did you
contact him? How did he call you or did you reach out?
Mr. SHIRLEY. He is simply—he is just a man in Minnesota who
has a passion for his city. He had been seeing fraud taking place
for years. Out of the all the thousands of messages I get on
Instagram and other platforms, I just happened to read his. He
provided me the information. I gave him a phone call.
Mr. MOORE. Then from there, just went to those different facili-
ties. What was probably the most interesting thing as you were
doing this. I saw the video. We watched it. I believe there were a
number of facilities like in the same building.
Mr. SHIRLEY. Yes. In one building there was, I believe, three
daycares, and there were no children. They were all receiving
CCAP funding for separate daycares.
There was one daycare we went to that one day it was closed by
the government, and then that same day it was reopened under-
neath another name. They both received CCAP funding.
Mr. MOORE. I bet, Ms. Larson, they weren’t getting audited year-
ly like you were.
Ms. LARSON. I would guess not.
Mr. MOORE. How many daycares are there in Minneapolis that
we think are fraudulent right now, Mr. Shirley? Any idea? Are
there an amount of money, total? Do you got any idea on that?
Mr. SHIRLEY. Well, they froze over $185 million and not a single
business has been able to prove that they are a legitimate business
yet.
Mr. MOORE. The $185 million for sure that we know.
Mr. Dexter, I have got a question for you. What common patterns
or warning signs usually indicate that the provider of the program
may be committing fraud?
As you were doing your investigations in 28 years of experience,
what are some of the indicators that you see that should be a tell-
tale sign or a red flag that there is fraud there?
Mr. DEXTER. Well, one of the immediate signs that we saw that
when we went out to look first at the location where that was lo-
cated. A lot of times they were located in commercial areas. I am
not talking like strip malls or anything like that. I am talking
46

about industrial areas where you wouldn’t typically find a childcare
center.
We would notice that there was no play area. If there was any
play equipment, it was bare minimum. Now, there was an excep-
tion that if there was a playground area within a very short walk-
ing distance, that would count. A lot of times we didn’t see that.
The most glaring thing was that when we watched the centers,
we would sit and watch it for a couple of days before we even put
up surveillance cameras, we would watch. We would see little to
no children present. If anything, there would be a few kids.
Mr. MOORE. As you began to blow the whistle, the investigator
became—
Mr. BIGGS. The gentleman’s time has expired.
Mr. MOORE. I yield back, Mr. Chair.
Mr. BIGGS. Thank you. The Chair recognizes the Ranking Mem-
ber, Ms. McBath.
Ms. MCBATH. Thank you, Mr. Chair. When he began his second
term, President Trump broke from historic norms and fired 17 in-
spectors general, people who serve as critical watch dogs and pre-
vent waste, fraud, and abuse.
A Federal judge held that these firing were illegal, but also held
that she could not reinstate these people due to their important
roles. As a result, the President has been able to appoint acting in-
spectors general who have themselves been removed after informa-
tion to Congress that Trump officials are not cooperating with in-
vestigations.
Mr. Hedtler-Gaudette, how do these frequent firings affect the
ability of the inspector general offices to prevent and investigate
fraud?
Mr. HEDTLER-GAUDETTE. They fundamentally undermine it, and
they also create a real chilling effect for the inspector generals who
are left. The incentive to do something that could upset the powers
that be, suddenly becomes a bit of a risky proposition. Between
completely undermining them and the chilling effect, you are really
dampening and damaging the ability to do real oversight.
Ms. MCBATH. Thank you. How does the politicization of inspector
general appointments affect the morale and effectiveness of career
investigative staff that are within these offices?
Mr. HEDTLER-GAUDETTE. It also has a severely negative effect on
morale and efficacy within the offices.
Ms. MCBATH. I believe we can and should do more to prevent
fraud and improve oversight so that all our government efforts are
doing the most that they can to help the American people.
When the Judiciary Committee marked up the Republican’s par-
tisan big ugly spending bill, I offered an amendment that would
dedicate half of one percent of funding to be used for oversight,
fraud improvement, and prevention. My Republican colleagues,
they opposed the amendment.
Mr. Hedtler-Gaudette, in your opening statement, you spoke on
steps that Congress could take to ensure robust, nonpartisan over-
sight. The Project on Government Oversight recently published an
article, ‘‘7 Ways Congress Should Sharpen Its Oversight in 2026.’’
Can you pass him this?
Mr. BIGGS. Without objection.
47

Ms. MCBATH. Thank you. Thank you. Is there anything else that
you want to highlight from those recommendations?
Mr. HEDTLER-GAUDETTE. Sure, yes. I just want to pause to note
that Congress really is the indispensable actor when it comes to
doing oversight. They are supposed to be a somewhat adversarial
relationship between the branches, and Congress is supposed to be
the primary adversary when it comes to—there are two branches
in conducting oversight. That is predicated at Congress taking that
oversight duty seriously irrespective of who is in charge of the
other two branches.
There is a political will issue there with oversight but also there
are some mechanical issues. Congress could do a better job of hold-
ing hearings that are a bit more bipartisan, a bit more focused on
the facts as opposed to the sizzle of a given anecdote or scandal.
Really trying to get at root causes and really trying to take hard,
deep looks at the underlying structural reasons why things like
fraud happen.
It is not as sexy. It is not going to get you as many views on so-
cial media. It is going to actually ideally lead to long-term, sustain-
able, durable reforms that can really crack down on the problem.
Ms. MCBATH. Thank you. The short-lived DOGE office was sup-
posed to cut fraud. Mr. Hedtler-Gaudette, what did it actually do,
and how did its actions actually affect everyday Americans?
Mr. HEDTLER-GAUDETTE. DOGE was a complete failure. Even on
its own terms, the primary progenitor of DOGE claimed that he
was going to find $2 trillion. Then, he moved that down to $1 tril-
lion in waste, fraud, and abuse cutting spending. In 2025, we actu-
ally spent more money than we spent in 2024.
At the opening of this Fiscal Year in October, we ran the largest
opening month budget deficit ever run before at $285 billion. We
have hollowed out the key functions of a bunch of agencies. Any
claim that DOGE was effective either on cutting spending, pro-
moting effectiveness, or efficiency are just flat out undermined and
undercut by the facts.
Ms. MCBATH. Mr. Hedtler-Gaudette, because you have done in-
vestigations yourself, did you do any followup on Mr. Shirley’s
video?
Mr. HEDTLER-GAUDETTE. Personally, I took a look at what had
been done to try and backstop what Mr. Shirley indicated in his
video by a professional journalist at CBS and by professional over-
sight practitioners like the inspector general in Minnesota. As it
turns out, they had a difficult time substantiating what Mr. Shirley
was claiming to be true in his video. In fact, they found counter-
vailing evidence, including having been provided security footage
by one of those daycares of children being dropped off the very day
that Mr. Shirley was supposedly there.
In my view, I would have to err on side of believing the profes-
sional journalist at CBS and the professional oversight practi-
tioners at the inspector general’s office.
Ms. MCBATH. Thank you. I am out of time. I yield.
Mr. BIGGS. The Chair recognizes the gentlelady from Florida, Ms.
Lee.
Ms. LEE. Thank you, Mr. Chair. On that note, it is important
that we return to a discussion of how these investigations were
48

conducted and the type of evidence that led to the discovery of this
massive fraud.
One thing that is clear based on the testimony today is that this
is not just a Minnesota problem. This is a warning sign for every
State that is administering large scale programs using taxpayer
dollars. We need to get to the bottom of how to identify this type
of fraud and prevent it from continuing to occur.
Mr. Dexter, I would like to go back to your testimony, both of
which you have shared with us already about your extensive back-
ground investigating and analyzing program fraud, and the meth-
ods that you used to identify the theft of taxpayer dollars in this
particular type of case.
In your written testimony, you mentioned that case selection and
investigations were begun in part by looking at funding data. I am
interested in how your office would use things like funding data,
use statistics, and other information and evidence to begin to de-
velop these cases.
Mr. DEXTER. Well, it wasn’t hard to find the funding amounts.
We looked at the centers that received CCAP funds and then we
listed them out. We had what was originally referred to as the top
100 list. It was based off of the centers receiving the most CCAP
funding. That was generated through the billing process and the
people that administer the funds.
Ms. LEE. When you looked at that list, did it turn out that there
were certain facilities that were outliers in some way, either be-
cause they were receiving a larger amounts of funding based on
student population that appeared typical or because of where they
were located. Tell us how you identified which facilities warranted
further review?
Mr. DEXTER. Well, when we started looking at the centers that
were receiving the most funds, the investigators were each as-
signed cases, were assigned centers, and when we first started
looking into what the billing pattern was or what the billing
amount was, how many children were being billed at these centers.
We would have centers that were billing for 120 plus children and
looking at the different days and times, establishing a pattern that
just was outside the realm of a typical daycare center.
Ms. LEE. In other words, you used objective data and evidence
as the foundation to proceed further with your investigations?
Mr. DEXTER. Yes, to start the investigation, that’s what we would
begin with.
Ms. LEE. In your experience, wouldn’t you also say that this is
the typical method, or a typical method, for beginning and ana-
lyzing a potential fraud case of any nature in any community?
Mr. DEXTER. Yes, because to do the investigation, you first have
to find out if it warrants an investigation and to what extent that
investigation would be.
Ms. LEE. Now, isn’t it also correct—you mentioned in your testi-
mony systemic weaknesses that allowed the large scale fraud even
after you had developed substantial evidence that there was, in
fact, fraud occurring. There were institutional and systemic bar-
riers that prevented you from successfully moving these cases
through prosecution and indeed in your testimony you note that in
49

2019, you chose to retire because the process had become so con-
strained that meaningful work was no longer possible.
Tell us about the barriers and ultimately that profound frustra-
tion that led you to retire.
Mr. DEXTER. When we were originally hired—when this unit was
originally created and we were hired, the understanding was that
our job was going to be to investigate fraud and stop it. As we pro-
ceeded through with that, it wasn’t by our doing that it turned out
that the centers we investigated were predominantly Somali.
Once that was kind of brought out to light, the roadblocks that
were put in front of us, being called racist, being called before these
boards to be investigated, and basically it wound up turning us into
auditors. We wound up just simply reviewing attendance records
and matching them up with billing. There really wasn’t a lot of
substantial investigation anymore, and most of our cases wound up
going before administrative hearings rather than criminal.
Ms. LEE. Which in the end, allowed this pattern of conduct to
continue to occur, did it not?
Mr. DEXTER. Yes.
Ms. LEE. Thank you, Mr. Chair. I yield back.
Mr. BIGGS. The gentlelady yields. The Chair recognizes now the
gentleman from North Carolina, Mr. Knott.
Mr. KNOTT. Thank you, Mr. Chair. To my colleague from Florida,
thank you for that line of questioning. I am going to pick up where
she left off.
In regard to the testimony that we have heard today, the other
side of the aisle makes us believe or wants us to believe that the
fraud has been effectively stopped. That they aggressively pursued
it, they prosecuted it, and it is under control. Is that your interpre-
tation of where we are, Mr. Dexter?
Mr. DEXTER. I believe fraud is still going on. I don’t think any-
thing has changed from what I have seen with Mr. Shirley’s videos.
I am seeing in his videos the exact same things that we were see-
ing back from 2014–2019 when I worked there.
Mr. KNOTT. It is astounding to me when I was looking at some
of the footage, the evidence, there was almost a sense of we are
owed this money that we are stealing. How dare you investigate
us? Did you ever encounter that type of attitude when you were
performing these investigations?
Mr. DEXTER. There was an underlying attitude like that, that we
were taking away their money and that it wasn’t fair to them.
Mr. KNOTT. Your investigations, sir, was the fraud as obvious as
it seems to me that it appeared in the videos and the other evi-
dence that I reviewed?
Mr. DEXTER. Yes, as a matter of fact when we would go out to
do our investigations, one of the things that we would have to do,
or I would have to do, is we would scout out a location for our sur-
veillance cameras that allowed us a direct line of sight to the cen-
ters, all their accesses.
A lot of that, because of the location where we were in these in-
dustrial commercial areas, it meant we had to go to the businesses
and ask them permission. The No. 1 comment they made, was ‘‘oh,
you mean that daycare center over there where there are no chil-
dren?’’ Everyone else saw it.
50

Mr. KNOTT. In regard to your investigation, sir, I am assuming
that you did not just investigate daycare fraud. What other types
of fraud did you investigate?
Mr. DEXTER. No, our function was strictly childcare fraud.
Mr. KNOTT. OK.
Mr. DEXTER. Some of that overlapped into—even though we
didn’t investigate it, a lot of it was also tied into the medical trans-
portation.
Mr. KNOTT. Did you ever investigate single entities that were ap-
pearing as though they were committing fraud in multiple ave-
nues?
Mr. DEXTER. I’m sorry. Can you say that—
Mr. KNOTT. Was there one facility that was a daycare. It was
also associated with medical transport. Were there people who
were double-dipping in the fraud in your investigations?
Mr. DEXTER. Not that we saw as far as different organizations,
but there was where one daycare center owner owned multiple
daycare centers. What we saw was more within the daycare center.
Mr. KNOTT. Yes. Ms. Larson, thank you for being here. I echo my
colleague’s sentiment from Alabama. Your son is very impressive.
What is his name?
Ms. LARSON. His name is Caden.
Mr. KNOTT. Caden, thank you for being here today. You look
sharp. You are doing great. Let me just talk to you about these
various audits that you were subjected to. How rigorous were they?
Ms. LARSON. Very. They would be there for hours. They would
come in and say I want to see these files for these kids on this date
at this time.
Mr. KNOTT. Was there anyway that you could have tricked them,
concealed it? If you had not had any children there, would it have
been possible?
Ms. LARSON. Absolutely not.
Mr. KNOTT. In regard to the services that you have rendered
first, thank you.
Ms. LARSON. Thank you.
Mr. KNOTT. Then, in terms of the budgets that you require, how
does it make you feel when you hear firsthand accounts that hun-
dreds of millions of dollars had been taken out of the country in
suitcases to hostile nations?
Ms. LARSON. I can’t even respond the way I feel about that. I will
say it is still happening. To the question you—there are only two
autism centers that have actually been shut down of all these that
are going on.
Mr. KNOTT. Yes.
Ms. LARSON. What they are doing is this prepayment review and
putting us through this AI system at Optum to look for suspicious
claims, which is why we are being—our funds are being held. It is
not going to work.
Mr. KNOTT. Yes.
Ms. LARSON. I am going to tell you it is not going to work. They
just need to do what Nick did. Go and see that there are no kids
there. Go and check it out.
51

Mr. KNOTT. What Mr. Dexter did. Data driven review without
any preconceptions, without any prejudices and then holding the
fraudsters to account. When he did that, he was called a racist.
Ms. LARSON. Yes.
Mr. KNOTT. It is astounding. It is astounding. You said that you
helped many patients, diverse patients.
Ms. LARSON. Yes.
Mr. KNOTT. How have those patients been harmed by this ad-
ministration in Minnesota, the Walz Administration?
Ms. LARSON. They are all being harmed if I shut down next
week.
Mr. KNOTT. Is that what you are up against?
Ms. LARSON. Well, I haven’t gotten paid now. The last date of
service was December 5th. I am over $400,000 in debt. My payroll
is $250,000 every two weeks. We get paid every two weeks. On
Sunday night I will know if I get any money. I haven’t been paid
a dime. All my claims had been held.
I am preparing to—apparently, Minnesota, too, I can’t just pause
services. If I pause my services, then DHS can say, I am sorry you
have lost your license to serve the kids through this program. I
don’t know what they think we are supposed to do.
Mr. KNOTT. Unbelievable.
Ms. LARSON. Yes.
Mr. KNOTT. Well, again, thank you for being here. I appreciate
all the testimony. Sorry I didn’t get to everybody else. There are
a lot of questions. Chair, I yield back.
Ms. LARSON. Thank you.
Mr. BIGGS. The gentleman yields. I recognize the gentleman from
California, Mr. Kiley.
Mr. KILEY. Thank you, Mr. Chair. Mr. Shirley, thank you for
your testimony today and the work that you have done.
Americans hear these numbers of the fraud that we have, wheth-
er it is $10,000, $10 million, or $10 billion, sometimes the numbers,
you almost become desensitized to it. The way that your video was
able to show people the fraud in real life actually happening
opened a lot of eyes, and this helped to catalyze a level of scrutiny
that we really should have had before.
You mentioned in your testimony that you think what you dis-
covered in Minnesota that this is not isolated to that State but like-
ly exists in other parts of the country as well, correct?
Mr. SHIRLEY. Correct.
Mr. KILEY. What makes you think that?
Mr. SHIRLEY. Well, now you are seeing, since I posted that video,
lots of other people have started to go to other locations, for in-
stance in Ohio, in Maine, or in California. We are also seeing simi-
lar fraud taking place in other daycares, for instance, in a lot of
other locations.
Mr. KILEY. I have a particular interest in California, being from
that State. We know there has been a lot of fraud. There was $32.6
billion that has been confirmed in unemployment insurance fraud.
There are $1.2 million fraudulent community college applications.
Have you gotten any sense or have you seen any signs there that
is similar to what aroused your suspicions in Minnesota?
52

Mr. SHIRLEY. Yes, the fraud in California might even be worse
than the fraud in Minnesota.
Mr. KILEY. What makes you say that?
Mr. SHIRLEY. Well, $24 billion is missing for homelessness. They
have been trying to build this train for years, yet there is hardly
anything to prove for that, buyers.
Mr. KILEY. Yes, those are good points. You looked at—let’s run
through a couple of those. Because I mentioned the areas where we
have confirmed fraud, but then you also have these areas where
you have so much spending and then we look at the result from
that spending and there is nothing.
The $24 billion in homelessness, and yet the homeless population
went up, and a State audit found that they couldn’t even figure out
where the money went or what the outcomes linked about spending
were. Is that something that is kind of a red flag for you?
Mr. SHIRLEY. Yes, it is a major red flag, and you don’t even have
to be smart to know that it’s a red flag.
Mr. KILEY. Well, unfortunately, our State legislators haven’t
managed to figure that out or at least the Governor hasn’t. What
are you saying about him?
Mr. SHIRLEY. They are not smart. It is so obvious. That is what
we saw in Minnesota is how complicit the government has been in
enabling this fraud to happen.
Quality Learning Center had over 90 violations and yet they con-
tinued to give that daycare $1.9 million.
Mr. KILEY. Yes, that is a great point, that the political account-
ability just hasn’t been there and that is what enables it to con-
tinue.
Then, you mentioned the high-speed rail as well. There has been
about $18 billion spent so far. No track has been laid and not a
single passenger has ridden the train. When you spend $18 billion
on a train and there is no train, does that raise suspicions for you?
Mr. SHIRLEY. Yes.
Mr. KILEY. You think that might be something worth looking at?
Mr. SHIRLEY. For sure.
Mr. KILEY. We also had a $650 million 911 service that they
scrapped after six years so absolutely no value from it. Maybe that
is another example where there might at least be questions.
Mr. SHIRLEY. I think you have got a lot in California.
Mr. KILEY. All right. Well, we will look forward to seeing what
you find. We are certainly trying to use whatever tools we have
here to bring more accountability to California as well.
Mr. Dexter, I wanted to also ask you a couple of questions about
your work. Because you have extensive experience on the law en-
forcement side trying to detect fraud. That is actually how in Cali-
fornia we discovered the EDD fraud and the unemployment fraud,
it wasn’t the State suddenly figuring it out. It was district attor-
neys who came together and investigated and, in fact, pointed to
the fact that the State had let this happen and failed to heed their
warnings and hadn’t taken basic fraud detection steps.
Is this something that you encounter? What kind of internal con-
trols make it so fraud is more difficult and what type of lack of in-
ternal controls makes it so that fraud is easier?
53

Mr. KILEY. I would say the biggest thing was the fact that when
we tried to investigate this, once we started bringing cases forward
and it showed that the number of centers that we investigated
were Somali, the biggest roadblock was the fact that they didn’t
want to follow through on these cases. They shut down investiga-
tions. They made us, in light of the report from this outside man-
agement firm, we spent nearly a year pulled away from our inves-
tigations because one of the things they determined was that when
our unit started, we didn’t have a proper case management system
for recording and keeping track of the tips.
As investigators, we instead had to spend nearly a year entering
past complaints made to DHS into a newly created database. We
couldn’t do our investigations because of that. They kept us from
doing our work basically.
Mr. DEXTER. Yes, the States that make fraud detection a priority
have less fraud than those that actively contravene efforts like
yours.
Thank you, Mr. Chair. I yield back.
Mr. BIGGS. Thank you. The gentleman’s time has expired. I rec-
ognize the Ranking Member Ms. McBath for some UCs.
Ms. MCBATH. Thank you, Mr. Chair. I would like to ask unani-
mous consent to enter into the record an article, ‘‘Republicans
Claims of Fraud Are a Pretext for Unpopular and Drastic Medicaid
Cuts.’’
Mr. BIGGS. Without objection.
Ms. MCBATH. Thank you.
Mr. RASKIN. Mr. Chair. Oh, I am going to have some UC.
Mr. BIGGS. Yup, please go ahead.
Mr. RASKIN. Actually, forgive me. I have a handful of them here,
Mr. Chair.
First, a letter dated October 21, 2025, from Representative
Bennie Thompson to Robert F. Kennedy, Jr., regarding the decision
to rescind the $101 million penalty imposed on Mississippi.
A press release dated September 17, 2025, titled, ‘‘Governor Walz
Issued Executive Order Directing State Agencies to Take Addi-
tional Steps to Combat Fraud.’’
An Executive Order 2501 titled, ‘‘Preventing Fraud and Estab-
lishing the Financial Crimes and Fraud Section of the Department
of Public Safety,’’ signed by Governor Tim Walz on January 3,
2025.
An article dated December 2, 2025, titled, ‘‘Trump Calls Somali
Immigrants Garbage as U.S. Reportedly Targets Minnesota Com-
munity.’’
An article dated January 9, 2026, titled, ‘‘Five States Sue Admin-
istration for Withholding Billions in Social Safety Net Funds.’’
An article dated January 10, 2026, titled, ‘‘Behind the Somali
Daycare Panic is a Mother-and-Son Duo Angling to Become Top
MAGA Influencers.’’
An article dated December 31, 2025, titled, ‘‘Right-Wing
YouTuber behind Viral Minnesota Fraud Video has Long Anti-Im-
migrant History.’’
An article dated January 11, 2026, titled, ‘‘Fact Check, What is
Really Happening with Child Care Fraud in Minnesota.’’
54

Finally, an article dated January 13, 2026, titled, ‘‘The Trump
Administration Says It’s Cracking Down OnFraud. It Gave A Red
State A Pass.’’
Thank you, Mr. Chair.
Mr. BIGGS. Without objection. The Chair recognizes Ms. McBath
again for another UC.
Ms. MCBATH. Thank you, Mr. Chair. I ask unanimous consent to
enter into the record an article titled, ‘‘Trump’s Child Care Fund
Freezing in Five States Could Cost Families $400 million,’’ by Julie
Kashen of The Century Foundation.
Mr. BIGGS. Without objection. I recognize myself for a series of
UCs.
From Fox News, ‘‘Biden Clemency for Convicted Fraudsters Met
with Outrage, Slap in Face.’’
From CNN, ‘‘Victim Shocked After Biden Grants Clemency to
Kids for Cash Judge and $54 Million Embezzler.’’
From Axios, ‘‘Biden Sets Presidential Record on Pardons and
Clemency.’’
Also, ‘‘Minnesota Daycare Expose Journalist Strikes Again and
in Part 2 Names the Hub of the Fraud Wheel.’’
An article, ‘‘Seventy-eighth Defendants Charged in Feeding our
Future Fraud Scheme,’’ from the U.S. Attorney’s Office, District of
Minnesota.
An article, ‘‘Suitcases Filled with Millions in Cash Flew Out of
Minnesota Airport, Ex-TSA Agent Connects Dots Years Later,’’
from MSN.
From U.S. Department of Health and Human Services, ‘‘HHS
Freezes Childcare and Family Assistance Grants in Five States for
Fraud Concerns.’’
From the U.S. Attorney’s Office, District of Minnesota, ‘‘Six Addi-
tional Defendants Charged, One Defendant Pleads Guilty in Ongo-
ing Fraud Schemes.’’
This is from the local Fox News in Minneapolis, ‘‘Through the
Years, a Decade of Investigating Fraud in Minnesota.’’
From the U.S. Department of Homeland Security release, ‘‘ICE
Continues Arresting Worst of the Worst in Sanctuary Minneapolis,
Including Pedophiles, Gang Members and Drug Traffickers.’’
From MSN, ‘‘TSA Flags Suspicious Cash Outflow at Min-
neapolis–St. Paul Airport.’’
From MSN, ‘‘Foreign ATM, Somalia Cash Exodus from Min-
neapolis Exponentially Larger than Other Major U.S. Airports.’’
From Breitbart, ‘‘SBA Cutting Off Grants to Minnesota Over Re-
ports of Somali Fraud.’’
An article, ‘‘Vance praises YouTuber Nick Shirley reporting on
Minnesota fraud.’’
An article, ‘‘Walz and Omar using ICE Operations to Distract
from Fraud Scandal.’’
From Just the News, in ‘‘Somali Fraud Scandal Republicans
Probe Evidence of a Blue State Election Scheme.’’
From the New York Post, ‘‘Ringleader of $250 million Minnesota
Welfare Fraud Scandal Ordered by Judge to Forfeit Porsche and
Luxury Goods.’’
From LifeZette.com, ‘‘TSA Whistleblower, Somalis Regularly Flew
Out with Suitcases Stuffed with Millions in Cash.’’
55

From Fox News, ‘‘Minnesota Welfare Fraud Targets Somali
Hawala Money Transfers.’’
From the Star News Network, ‘‘Feds Probe Hundreds of Millions
in Suspected Somali Cash and Luggage Leaving Minneapolis Air-
port.’’
From USCIS, ‘‘USCIS Announces Results of Operation Twin
Shield, a Large Scale Immigration Fraud Investigation.’’
From PBS, ‘‘Noem Says Homeland Security is Investigating
Fraud in Minneapolis.’’
From Cornell Law, this is the 18 U.S.C. Section 666, ‘‘Theft or
Bribery Concerning Programs Receiving Federal Funds.’’
Also, same source, 18 U.S.C. Section 641, ‘‘Public Money, Prop-
erty or Records.’’
Also from same source, 18 U.S.C. 1001, ‘‘Statements or Entries
Generally.’’
Without objection. I now recognize myself for my five minutes of
questioning.
I have read all your statements. I do thank you, Mr. Hedtler-
Gaudette, for your recommendations. Mr. Dexter also had some
recommendations. I think those are prescient. I think those are im-
portant.
I also have to bring some additional information about this just
because it is in my nature. I got to do it.
Mr. Hedtler-Gaudette, you have been talking about the IGs be-
cause you were asked about the IGs. Do you know how many cases,
for instance, criminal cases, are being investigated, say, by the De-
partment of Homeland Security IG right now?
Mr. HEDTLER-GAUDETTE. I don’t know the number off the top of
my head, no.
Mr. BIGGS. Would it surprise you there were 650 ongoing cases
with 200 of those being COVID related?
Mr. HEDTLER-GAUDETTE. That would not surprise me, no.
Mr. BIGGS. Do you know how many audits they have going right
now?
Mr. HEDTLER-GAUDETTE. No.
Mr. BIGGS. They have 60 audits going on right now with another
20 investigations going.
That sounds to me like the IG there, at least, and DHS is not
being chilled because of the appointment of temporary IGs. Am I
wrong on that or am I misconstruing that?
Mr. HEDTLER-GAUDETTE. One thing about the DHS IG, Mr. Jo-
seph Cuffari, is he was actually appointed under the first Trump
Administration. He has remained ever since. We actually at the
Project on Government Oversight have long recommended that Mr.
Cuffari be fired because he has had a long and demonstrated track
record of slow walking investigations at DHS, particularly when it
comes to abuse of force and other issues with DHS agents.
Mr. BIGGS. The Oversight Committee for the IGs didn’t adhere
to that recommendation. Anyway, I felt that point needed to be
made.
Additionally, Mr. Dexter, you looked at some of the same kind of
physical evidence that Mr. Shirley looked at with regard to phys-
ical presence at the various daycare facilities that you were exam-
ining between 2014–2019, is that true?
56

Mr. DEXTER. Yes.
Mr. BIGGS. You saw basically the same kind of physical evidence
that Mr. Shirley exposed?
Mr. DEXTER. That is correct.
Mr. BIGGS. You also looked at funding data, and you also had
whistleblowers.
Mr. DEXTER. Yes.
Mr. BIGGS. I find it interesting that somehow local news, which
reported the fraud, other local news reporters reported on the
fraud, credibly agree with the findings of Mr. Shirley. Is that what
you have seen as well, Mr. Dexter?
Mr. DEXTER. Yes, Fox 9 News in Minneapolis, they followed a lot
of our cases and did stories on them.
Mr. BIGGS. The very notion of trying to discredit Mr. Shirley be-
cause he had a lot of views or that some CBS reporter disagreed
with and said they couldn’t find the evidence actually in my mind
discredits the CBS reporter. Because I appreciate the Ranking
Member cited the Arizona fraud, which I also constantly cite. It is
a massive fraud in Arizona. Not just the $2.5 billion, but there is
an essential—another additional allegation of about $7 billion per
year fraud in Arizona.
There needs to be a change there. We need to get a handle on
this not just in Minnesota, but nationwide because, as we have
seen in Ms. Larson’s case, those who are conducting themselves ac-
cording to the law, delivering services, are the ones that also get
punished. If you are a fraudster, somehow you are able to keep on
going.
The fraud hasn’t stopped. Mr. Shirley have you seen any evi-
dence—you said twice today that $185 million of recipients, not one
of them has been able to demonstrate that they are a legitimate
business.
Mr. SHIRLEY. No. In fact, they are actually actively suing the
HHS to prevent handing over any information.
Mr. BIGGS. They don’t even want to give the information that
would be required of an audit, that would be required from a sepa-
rate, independent investigation. They want a court to intervene
and enjoin and prevent them from having to respond to this kind
of investigation. Is that correct, Mr. Shirley?
Mr. SHIRLEY. That is correct.
Mr. BIGGS. This is the thing. I listened to the panelists. Every-
body on the panel—I think everybody up here—we all want to stop
the fraud. The bottom line is it is so infused with politicization that
it is preventing us from just sitting down there and saying, OK, we
have got a symptom in Minnesota, and we are going to fix it. The
symptom being exposed is critical because then it actually moti-
vates people to try to get to the root cause.
I am out of time, and we have no other Members here. I just
want to thank each one of you, Mr. Dexter, Mr. Hedtler-Gaudette,
Mr. Shirley, and Ms. Larson for being here and giving us your tes-
timony. I really appreciate it.
I would encourage my colleagues to be better stewards and have
better oversight because otherwise Mr. Shirley’s generation is going
to be paying through the wazoo, which right now means $40 tril-
lion in national debt.
57

Thank you all. I appreciate it. We are adjourned.
[Whereupon, at 11:56 a.m., the Subcommittee was adjourned.]

All materials submitted for the record by Members of the Sub-
committee on Crime and Federal Government Surveillance can
be found at: https://docs.house.gov/Committee/Calendar/ByEvent
.aspx?EventID=118871.

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