▶ 0:21:59Good morning.
▶ 0:28:10submit subcommittee will come to order. Without objection, the chair is authorized to declare recess at any time. We welcome everybody to today's hearing. And I mean everybody who's in here and everybody who will come in here is welcome to come in here and participate and watch and participate But our hearing is on fraud and theft of taxpayer dollars. I now recognize a gentle woman from Florida, Miss Lee, to lead us in the pledge of allegiance.
▶ 0:29:00Thank 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, Minnesota. Minnesota has lost billions of dollars in state administered and fedally funded programs due to organized fraud. Fraud networks operating in Minnesota dating back more than a decade have submitted over $9 billion, that's a billion with B, in false claims.
▶ 0:29:28Some highprofile cases in Minnesota include organizations and programs such as Feeding Our Future, early intensive developmental and behavioral intervention, housing stabilization services, and integrated community supports. Now, we're going to watch a video. about the it's welfare fraud. It's all about the daycare.
▶ 0:29:59They estimate as much as $100 million a year is being stolen by shady daycare center operators.
▶ 0:30:06So how much money are we talking about stolen from the American taxpayer?
▶ 0:30:11Well in excess of a billion dollars. ripping off state-run programs intended to feed low-income kids, house the disabled, and provide services to autistic children.
▶ 0:30:21Where are the Where are the children at? Do you know where the children are at?
▶ 0:30:26Where are the children at in these daycare centers?
▶ 0:30:28I don't think.
▶ 0:30:29Are the children here today?
▶ 0:30:31No children? [music]
▶ 0:30:32So, this is quality learing center. Hello. We'd like to ask where the money's going. Attorney General Keith Ellison was focused on one thing and one thing only [music] and that was keeping these folks in business. When do you think Governor Waltz knew about this fraud?
▶ 0:30:49From the very beginning.
▶ 0:30:50What happened here in Minnesota that allowed this fraud to materialize? The people at the highest levels of responsibility in the government of the state of Minnesota looked the other way. 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.
▶ 0:31:19These 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 medaid recipients. Since 2021, the DOJ has charged 98 defendants in Minnesota based fraud cases, 85 of whom are of Somali descent. Of the 98 defendants, 64 have been convicted.
▶ 0:31:43DOJ has now undertaken extensive investigative action, which includes issuing 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 response to fraud in Minnesota has intensified following a series of high-profile cases involving state administered federally funded programs.
▶ 0:32:07One of the initial instances of high-profile fraud in the state involved the nonprofit feeding our future, which was at the center of a $250 million coid9 related fraud scheme. As part of the scheme, fraudsters exploited Department of Agriculture USDA food programs designed to provide meals for children. Federal prosecutors ultimately convicted 57 defendants and described the scheme as the nation's largest COVID era fraud.
▶ 0:32:34The issue gained rea 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 suspected fraud in Minnesota child care programs. His reporting prompted federal authorities to intensify investigations, expand oversight, and coordinate multi- agency enforcement efforts. A week ago today, Mr.
▶ 0:32:58Shirley released a second video that documented alleged fraud in the transportation industry intended to provide rides for children, the disabled, and the elderly. Mr. surely uncovered companies with questionable addresses and vehicles intended to transport children, the disabled, and the elderly that remained idle for extended periods of time. We look forward to hearing from Mr. Shirley about what he was able to uncover. But how did we get here?
▶ 0:33:23Hopefully, another witness, Scott Dexter, a former fraud investigator for the Minnesota Department of Human Services, can shed some light on that for us. And I'd be remiss if I didn't point out that this massive wave of fraudulent activity didn't just have the consequence of ripping off taxpayers. It has drastically impacted leg 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 organization that serves autistic children.
▶ 0:33:50We'd like to thank 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, disappeared 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. For example, the aforementioned Yasmin Ali.
▶ 0:34:20Her brother, Adaris Abdullle Ali, pleaded guilty in 2009 to lying to federal grand jury about his knowledge of a group of young Somali men in Minneapolis who traveled to Somalia to fight with Al-Shabaab, a foreign terrorist organization against the transitional federal government of Somalia. We can also consider the fact that at least $700 million in US cash transported via passenger luggage through Minneapolis St. Paul International Airport.
▶ 0:34:44The incidents are all currently under federal investigation with the majority carried by couriers traveling to Somalia, other African nations, and the Middle East. While no definitive links to funding terrorism have been established 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 Minneapolis St.
▶ 0:35:10Polar International Airport repeatedly identified and flagged routine encounters with Somali men carrying large suitcases filled with bundled cash often exceeding a million dollars. During an interview, a former TSA agent at MSP from 2016 to 2021, now whistleblower, Liz Jackson, 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 leaders still haven't answered." Close
▶ 0:35:40quote. Jaxa 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 Jaxa, the volume, consistency, and profile of the transactions she witnessed were well beyond ordinary or everyday behavior. Treasury Secretary Scott Bessant has noted that the department is currently investigating where Minnesota's taxpayer dollars are being placed.
▶ 0:36:07Additional reports show that Somali individuals in the United States send roughly $215 million abroad each year. On January 9th, Secretary Besson indicated that the Treasury Department's Financial Crimes Enforcement Network, Fininsson, informed money transfer organizations that they're under investigation for their roles in the fraud scheme involving the theft of funds from social services in Minnesota.
▶ 0:36:30He also indicated that some banks in Minnesota are being investigated by the Internal Revenue Services Civil Enforcement Division for allegations related to money laundering. As you can see, there's much to unpack surrounding these numerous fraud schemes taking place in and around Minneapolis, I would be remiss if I didn't suggest and urge additional investigation throughout this entire country.
▶ 0:36:53I know that in my home state of Arizona, our Democrat attorney general came in uh to office and quickly said that there had been $2.5 million in fraud just in the Medicaid program alone. And in recent studies released over the last year in Arizona, it's been suggested that as much as $7.2 billion in fraud annually take place in Arizona's similar programs.
▶ 0:37:19So, this is not just a Minnesota issue, but it just happens to be at the forefront of why we're here today. I look forward to today's hearing, and I thank the members and witnesses for taking part. Now, yield back and recognize the ranking member, Ms. Mcbath, for her opening statement.
▶ 0:37:35Thank you, Mr. Chair, and thank you um for convening this hearing this morning to talk about the harm that fraud can cause. And thank you for everyone that is here this morning uh to testify. Right. 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.
▶ 0:38:06They harm the organizations that need these programs to operate. And most importantly, they harm the people that the program is designed to help. Whether we're talking about a program that feeds school children, helps seniors find housing, helps people overcome addiction, or provide services to address disabilities, it is critical that the dollars that we invest in these programs actually serve the purposes that we have in mind when we, the lawmakers, created them.
▶ 0:38:36That's why the Department of Justice has always combed fraud, including prosecuting dozens of people for part for perpetrating fraudulent schemes in Minnesota in 2021 and under the Biden administration. But prosecutions are not enough to combat or prevent fraud. So, the Biden administration also established a CO 19 fraud enforcement task force and increased oversight of programs that were being targeted by fraudsters.
▶ 0:39:07Minnesota 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. But, President Trump has taken a very different approach to fraud.
▶ 0:39:23Just last week, Trump added a quite a few fraudsters to his growing list of people that he has pardoned, not because they are deserving a second chance, but because they hired his friends, back channelled a donation, or served his political purposes. He has pardoned many people charged or convicted of fraud and other financial crimes, wiping away more than a billion dollars in money that would otherwise have gone to victims of crime.
▶ 0:39:52President 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.
▶ 0:40:19They do not want you to trust entire communities because if you don't trust them, they're easier to But we cannot let that happen. We will continue to fight for robust and responsible oversight and for the continuation of initiatives that make all of our communities safer, healthier, and more resilient.
▶ 0:40:42Across the country, there are daycarees, schools, hospitals, treatment 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.
▶ 0:41:02If President Trump succeeds in attempt to freeze child care funding across five states, which is tempor temporarily blocked by a court order, the effects would ripple across families and businesses throughout our economy. It would affect more than 500,000 children.
▶ 0:41:23And these are children that are not just within the state of Minnesota, but 500,000 children, their parents, the businesses and organizations where those parents work and the many people who depend on those businesses to fulfill needs in those communities. That's the fallout from just one program addressing one need across only five states.
▶ 0:41:48If 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 health care from 10 million Americans and reducing food assistance to over 40 million Americans, including many, many children.
▶ 0:42:13We 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 daycarees and our schools can keep guiding our children towards a better future. I look forward to hearing more today about how we can achieve this goal.
▶ 0:42:41I thank our witnesses for being here and I yield.
▶ 0:42:44Gentle lady yields back. I now recognize the chairman of the full committee, Mr. Jordan. No, I don't recognize him right now, but I will recognize the ranking member uh of the full committee, Mr. Raskin, for his opening statement.
▶ 0:42:56Thank you kindly, uh, Mr. Chairman, and thank you to all of our witnesses for joining us. In a just world, the judiciary committee today would be investigating why a masked ICE agent shot three times in cold blood and killed an unarmed citizen, a 37year-old mom, Renee Nicole Good. We'd be investigating why Trump's DOJ is harassing and investigating Rene's wife instead of investigating her killer.
▶ 0:43:26We'd be asking why ICE agents are trained in basic CPR, but 911 tapes have shown none of the agents performing CPR on Miss Good. They left her bleeding alone in her car for almost 3 minutes and definitively rejected the help of a man who came forward and identified himself as a doctor.
▶ 0:43:44We'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 2-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. But our colleagues want to talk about fraud in Minnesota.
▶ 0:44:12fraud that was already being investigated and prosecuted under the last administ administration. It is true that social services fraud, serious fraud, occurred in Minnesota. That's why under President Biden, the Department 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.
▶ 0:44:40Indeed, 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 cut off payments or to claw back funds whenever fraud is detected. And that's why Governor Walls appointed the first ever director of program integrity to make sure the state is effectively investigating and preventing fraud and corruption in their programs.
▶ 0:45:09The fraud in Minnesota was discovered not by a right-wing social media influencer who's 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 federal auditors.
▶ 0:45:29It is 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 chairman of this subcommittee as he himself mentioned or the massive COVID 19 unemployment assistance fraud scheme uncovered in chairman Jordan's home state of Ohio. Fraud is endemic in government all over the world.
▶ 0:46:00There are fraudsters attacking our public institutions trying to undermine them and rip them off. Even our president has been convicted of 34 accounts of criminal fraud by a jury of his peers in New York related to the fraudulent payments made to porn star Stormmy Daniels and also civily convicted in New York for different kinds of real estate fraud.
▶ 0:46:27Fraud is not headquartered in one state or one municipality, much less one ethnic, racial, or religious community. But 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 Somali ancestry.
▶ 0:46:57So 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.
▶ 0:47:16This is despite the fact that it is a complete non sequator obviously to send immigration agents to conduct fraud investigations and 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 to doctrines that are emphatically rejected.
▶ 0:47:46ed in Anglo-American juristprudence and by our courts. The community targeted in Min Minneapolis is made up incidentally overwhelmingly of US citizens. 95% of Somali in Minnesota are US citizens, including 58% of whom were born in the United States. Well, what is the Trump administration's actual record on fraud? Well, let's see.
▶ 0:48:10President Trump pardoned the big-time drug dealer and convicted fraudster Juan Orlando Hernandez, the former president of Honduras, sparing him a 45year criminal sentence after he brought in 400 tons of cocaine into our country.
▶ 0:48:28That's 800,000 pounds of cocaine that he said, quote, "We are going to stuff up the nostrils of the gringoes." and Trump pardoned him. And if you're interested in that particular sweetheart deal, that would be a great subject for a hearing. Mr. Chairman, just last week again, the president granted pardons to more convicted fraudsters.
▶ 0:48:52Julio Herrera Velini was scheduled to be sentenced this month for participation in a political corruption and fraud scheme alongside his codefendant, the former governor of Puerto Rico, Wanda Vasquez. In late 2024, Mr. Herrera was facing felony bribery charges in a different case. His daughter donated $2.5 million to the Mega Inc. Super PAC. Then in May 2025, Mr.
▶ 0:49:17Herrera's lawyer, who had served on President Trump's legal team, negotiated a deal allowing him to plead guilty to a trivial misdemeanor offense instead. Several months later, Mr. Herrera's daughter donated another million dollars to MAGA, Inc. And what do you know? President Trump generously granted Mr. Herrera a full and unconditional pardon just last week.
▶ 0:49:40They're making a fraud out of the pardon process in America with pay-to-play rules as they pardon recidivist hardened unrepentant fraudsters. Well, indeed, in total, President Trump has pardoned more than 1,600 people, depriving victims, survivors, and taxpayers of an estimated, check this out, $1.55 billion in restitution and fines owed to us, the American
▶ 0:50:10people, while because other presidents didn't do this, but Trump did, while shockingly allowing corporate fraudsters and tax cheats to keep all of their illgotten gains. This is a massive and unprecedented swindle from workingclass people and crime victims as the administration gives all of these illotten gains right back to the criminal fraudsters who stole the money in the first place.
▶ 0:50:40And finally, Mr. Chairman, President Trump has dismantled the infrastructure 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.
▶ 0:51:00And 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 financial corporations.
▶ 0:51:24The CFPB delivered $2 billion back to more than 200 million Americans who were victims of fraud and other predatory business practices. And the administration has been gutting the CFPB because they are on the side of corporate fraud and white collar crime. That's the truth of what's going on there.
▶ 0:51:46They fired 17 inspectors general, the independent government watchd dogss 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. So, if we're going to have a hearing about fraud in America, Mr. Chairman, let's do it. Let's take in the full scope of what's taking place in our country. I yield back to you. Gentleman yields back.
▶ 0:52:16I now recognize the chairman of the entire committee, Mr.
▶ 0:52:20Uh thank you, Mr. Chairman. I I'll be brief. I want to thank our witnesses for being here. Um estimates are potentially as high as $9 billion. We're we're looking at uh here and um what appears to be a decadel long scam, fraud. I mean, I 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 hardearned tax dollars, taking that money and supposedly providing meals to children.
▶ 0:52:50Problem was there were no meals and no kids. They're just stuffing it in their pockets. So, um I think this is a great hearing to have. We appreciate the witnesses and the work that they've done, Miss Larson and the work she does and actually making a difference doing a legitimate program. Mr. Shirley for uncovering this and Mr. Dexter and others who are here. So, uh, with that, I would yield back and look forward to hearing from our witnesses and the hearing itself.
▶ 0:53:11Thank you, Mr. Chairman. I recognize myself for just some UC's. The first one is President Joe Biden commute sentences for two of Chicago's area Chicago's most notorious fraudsters. North Dakota judge blast Biden for setting fraudsters free. Biden commutes roughly 1500 sentences, pardons 39 in big single day act of including fraudsters.
▶ 0:53:41Illinois lawmakers furious after Biden commute sentences of state fraudsters without objection. And now
▶ 0:53:49Mr. Chairman, could I enter some as
▶ 0:53:51Yeah, please.
▶ 0:53:52Thank you much. Um, this uh UC request is u from ABC News uh January 20, 2026 titled Trump's pardons forgive financial crimes that came with hundreds of millions of dollars in punishment. Um, this one is Arizona has recovered just 5% of taxpayer dollars lost in a $2.5 billion Medicaid fraud scheme. That's ProPublica.
▶ 0:54:17uh Columbus Dispatch, Columbus Mother and Daughter among 15 indicted in pandemic unemployment assistance fraud scheme. Um and finally, uh a Minnesota fraud scheme timeline from NPR News fraud investigation stretched across Walls's tenure. Uh without objection. And now without uh objection, all other opening statements will be included in the record and we will introduce today's witnesses. Mr. Scott Dexter.
▶ 0:54:47Mr. Dexter is a former law enforcement officer having served for 28 years. He also served with the Minnesota Department of Human Services Office of Inspector General where he investigated fraud in the child care assistance program. Thank you, Mr. Dexter, for being here. And um Miss Jennifer Larson. Mrs. Larson is the founder and chief executive officer of the Holland Center for Autism, a clinic that provides services to children and young adults with autism.
▶ 0:55:12She started the Holland Center to serve families like hers that were not receiving adequate services and support elsewhere. Thank you, Miss Larson, for being here today. Mr. Nick Shirley is an independent journalist. His recent investigations 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. And Mr. Dylan Hetler Goddet. Mr. Hetler Gadet is the acting vice president of policy and government affairs at the project on government or oversight.
▶ 0:55:42Pogo is a nonprofit organization that investigates alleged wrongdoing by the governor. Thank you, Mr. Headler Godet 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 testimony you're about to give is true and correct to the best of your knowledge, information, and belief? So help you God. Thank Thank you. You may be seated.
▶ 0:56:12The record will reflected the witnesses have all answered in the affirmative. And um at the instruction of Mr. Headler Godet, I wanted to let all members of the panel know that um when you have question for him, please say his name so he knows that you are addressing him. Please. Um, 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 5 minutes. And we'll begin now with Mr. Dexter.
▶ 0:56:40You are recognized for your five-minute statement. Thank you, chair. Members of the committee, 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 spent conducting criminal and financial fraud investigations with experience in surveillance operations.
▶ 0:57:01In 2013, after retiring from law enforcement, I joined the Minnesota 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. I was one of the original four investigators hired. All of us 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.
▶ 0:57:31They were selected based solely on tips, complaints, and the amount of CCAP funding being paid out. The highest funded centers were reviewed first. And many of those centers were referred to us through the public tip line or by licensing inspectors who observed activity inconsistent with a legitimate daycare operation. What we found was deeply concerning. Many of these centers operated out of commercial spaces with windows totally covered, no visible play areas, and very few children ever present.
▶ 0:58:02Through surveillance, data collection, and review of attendance, and billing records, we repeatedly documented patterns of overbilling, non-existent 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 collected licensing and billing data, installed covert surveillance cameras, reviewed hours of video, identified parents and employees, and calculated estimated overpayments based on actual attendance.
▶ 0:58:32Completed 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 re receiving the highest levels of CCAP funding were owned and operated by smallie 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.
▶ 0:59:02We were labeled as racially biased 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.
▶ 0:59:24Investigators were also pulled from conducting new or current investigations in order 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 effectively. Ultimately, in 2019, I chose to retire because the investigative process had been become so constrained that meaningful work was no longer possible.
▶ 0:59:51Through collaboration with federal agencies, including the IRS Criminal Investigation Division, Homeland Security, and the US Department of Health and Human Services, we learned that millions of dollars in cash from the Somali community was being flown out of the Minneapolis St. Paul airport by Somali couriers. 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 fraudulently, we sus strongly we strongly suspected that it was.
▶ 1:00:20We also encou encountered situations where federal partners were prevented from opening cases due to concerns about polit political sensitivities surrounding the Somali community and the refugee resettlement program. These decisions had real consequences, allowing fraud to continue 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.
▶ 1:00:47Billing records were could be submitted up to 30 days later, creating opportunities for Attendance records were handwritten, unreliable, and often incomplete. And despite our recommendations, no biometric attendance systems, no electronic submission requirements, and no state installed security cameras were ever implemented. Chair and members, the purpose of my testimony is not to cast blame on any community.
▶ 1:01:11It is to highlight systemic weaknesses 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 interference. Thank you for your time and your commitment to ensuring accountability within publicly funded programs. And I am prepared to answer any questions that you may have.
▶ 1:01:32Thank you, Mr. Dexter.
▶ 1:01:35And now uh we're going to recognize Mr. Hetler Godet for your five minutes of uh opening statement.
▶ 1:01:45Chairman Biggs, Ranking Member McBath, and members of the subcommittee. I appreciate the opportunity to testify before you today on the important issues of preventing fraud and protecting taxpayer dollars. My name is Dylan Hetler Goddet and I am the acting vice president of [clears throat] policy and government affairs at the project on government oversight. We are a nonpartisan independent watchdog that promotes a more accountable, transparent, and effective federal government.
▶ 1:02:11We view it as our mission to combat abuse of power and corruption in the federal government, which includes working on rooting out waste, fraud, and The unfortunate truth is that fraud in government programs is a fact of life. Since the United States government has existed, fraud in government has also existed. or much longer than that.
▶ 1:02:36In fact, for as long as human beings have been organizing ourselves into societies and building institutions 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 upon every one of us to do what we can to prevent fraud and to hold perpetrators of fraud accountable.
▶ 1:03:03This is especially true when the fraud implicates hard-earned taxpayer dollars and critical public programs and This is true whether we're talking about fraud in the context of the Feeding Our Future program or any other program in Minnesota, whether we're talking about welfare fraud in Mississippi, which involved the participation of a world famous Hall of Fame NFL quarterback.
▶ 1:03:25This is true whether we're talking about fraud in the context of it being perpetrated by large multinational defense companies in the context of multi-billion dollar contract they have with the defense department. The point here is is that fraud and the abuse of taxpayer dollars is not related to any particular geographic demographic or other boundary or characteristic. But why do these things happen so much?
▶ 1:03:52Mostly 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 To put it shortly, fraud is a systemic problem and it requires systemic So what are these solutions? I'm pleased to share a few of them with you today.
▶ 1:04:18We must first look at watchd dogs, 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, undermining, and intimidating these indivi individuals and entities as this administration and its allies have done, we must strengthen, preserve, and protect them.
▶ 1:04:46We must enact reforms to make sure that IG's and GAO can perform 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.
▶ 1:05:13Key resources like uspending.gov of are in desperate need of overhaul and We need to enhance and improve the quantity, quality, timeliness, and integrity of the data and information we we collect on federal funding. We need to promote more accountability, transparency, and compliance mechanisms within the chain of spending for federal funding. 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.
▶ 1:05:45Lastly, we must enact robust reforms and vigorous enforcement to crack down on corruption, cronyism, and conflicts of interest, which turbocharge 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 inappropriately to pardon convicted protesters.
▶ 1:06:06We must also promote reforms to crack down on the revolving door between agencies and industries and to head off pay-to-play politics, all of which distort and corrupt decisions like the award of federal contracts. [snorts] The takeaway here is simple.
▶ 1:06:22Focusing on individuals, scandalous examples of fraud is akin to looking at the symptoms and not looking at the disease or the root causes of the 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 government. Thank you for having me here today and I look forward to answering your
▶ 1:06:49Uh, thank you, Mr. Hedler. And I just I I forgot to mention when you get about 10 seconds left, I'll just tip that so you will so everybody will know that as well. So, Mr. Surely, you're recognized for your opening statement.
▶ 1:07:04Awesome. I'm here today to speak on behalf of all hardworking, law-abiding, taxpaying citizens here inside of the United States. I've helped bring to light widespread fraud that's happening inside our nation. And we, the people have had enough of our hard-earned money going towards fraudsters as if it's no big 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 nation.
▶ 1:07:34People erupted during the Boston Tea Party over just a few percentages as they believe they were being taxed without representation. Nowadays, we have the representation, but do we trust our representatives? My name is Nick Shirley and I made a 41minute video that I posted on platforms like X and YouTube.
▶ 1:07:52My video received over 100 million views and it created instant change within our government as the federal government launched investigations and departments 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 Minnesota in June of 2025 as I was there for a separate video in Minnesota and started reaching out to me asking me if I was making a video on the fraud.
▶ 1:08:21I said, 'Well, what what fraud? And this lady, she was a real estate agent. And she says, 'Well, I'm having a hard time selling my properties because people are curious about these assisted livingings that are popping up next door to some of the houses that we're buying or the home healthcare clinics that are popping up and we don't know who's next to these houses that we're trying to sell. And I said, "Well, I'm not going to come and make a video if I don't have any proof." So therefore, I left Minnesota. And I continued to look for fraud as in the best way I could.
▶ 1:08:51And 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've 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.
▶ 1:09:20We arrived and it was an industrialized building and there was two daycarees registered at that daycare at that building. And the first thing I noticed is all the windows are blacked out and there's no footprints in the snow of any children. There's no playgrounds or anything that would make it look like it's a child care. But above me, a sign read, "Open 7:00 a.m. to 1000 p.m." But there was nobody there. The doorbell did not even work.
▶ 1:09:48And 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 cannot even spell learing right on their sign. Governor Waltz has said he's been fighting fraud in Minnesota since 2019 and said the buck stops with him.
▶ 1:10:18However, how long would it take for you to notice a million dollars 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.
▶ 1:10:35And meanwhile, while people like Governor Tim Waltz call people like me a white supremist, delusional conspiracy theorist, he actually decided to drop out of re-election because, I believe, of how deep and extensive this fraud is. Thank you very much. Uh, 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.
▶ 1:11:04How fast would you be proving that you are a legitimate business if you have children to actually feed and to take care of? You'd be sending in 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. And people like me, my generation, we're sick of seeing tax dollars go towards fraud. We just want to have the same opportunities that our fathers and our grandparents had.
▶ 1:11:34And when you see people making millions of dollars by committing fraud, it upsets everybody from all age demographics. And so I hope today we can have a good conversation. And I think we can all agree that fraud is bad and that fraud is fraud. And I wish the best for our country. And I think that's what needs to be happening is to crack down on all forms of fraud. So thank you for having me and God bless the USA. Thank you, Mr. Chirley. And now I recognize Miss Larson for your five minute opening statement.
▶ 1:12:07Chairman, ranking member, and members of the committee. Thank you for allowing me to speak today on this issue. My name is Jennifer Larson. I'm the founder and CEO of Holland Center in Minnesota. I've 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, desperate for somewhere they could trust their child would be supported and helped. Not sent home on a bad day, not babysat in a classroom and forgotten.
▶ 1:12:36We 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 providers all over the state laboring with love to help these children. And this week, Holland and other programs all over Minnesota are collapsing.
▶ 1:13:01Not 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 backs stop. Their children often receive 30 or more hours of therapy a week. These are not an extravagance. These are medically necessary.
▶ 1:13:25These children learn to communicate, regulate their emotions, reduce dangerous behaviors, and function in daily life. For many parents, therapy determines if they can work. Consistent staff and therapy prevents 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.
▶ 1:13:48For more than two decades, Holland has served hundreds of children year after year, employed hundreds of clinicians and staff, operated under yearly on-site audits, inspections, and documentation oversight, delivered real services to real ch 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.
▶ 1:14:15I had to infuse my personal funds to survive these weeks, but 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 ethical long-standing autism providers.
▶ 1:14:37What did happen was organized criminal networks that exploited autism services by opening fake centers, billing for children that did not exist, billing for services never delivered, and stealing millions of taxpayer dollars in the process. These are not minor compliance issues. They are criminal enterprises. Families trusted that the government was protecting the integrity of the system. It failed.
▶ 1:15:02Now, 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. Children are regressing. Parents are leaving jobs to care for their disabled children.
▶ 1:15:32Autism therapy cannot be paused without consequences. Loss of services can erase years of progress in weeks and abrupt disruption of services can cause lifelong consequences in these children. This is not abstract harm. It is daily trauma for families already carrying an extraordinary burden.
▶ 1:15:50The simple solution to the problem, send the criminals to jail and allow trusted providers with decades of clean audits, verified ownership structures to continue providing prescribed ethical therapy and go back to paying them what we've earned and resume paying them on I built Holland for 20 years. Families built their lives around Okay, sorry. around the care that we provide. All of that is risk of destruction today.
▶ 1:16:20Not by fraud, but by clumsy government response that failed to distinguish between criminals and caregivers. It treats children with
▶ 1:16:27The gentle lady will suspend. We've got a photographer there. We allow photographers in here, but not between the panel of the witnesses and the members. You will please move.
▶ 1:16:40Photographer, please move.
▶ 1:16:41Thank you.
▶ 1:16:42Like right now? Okay. Not we sorry. Well,
▶ 1:16:49all of that is at the risk of destruction. Sorry. Can I continue?
▶ 1:16:52Yeah, please continue.
▶ 1:16:53Not by fraud, but the clumsy government response 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. I live in Minnesota. This is disgusting. But families and children should never pay the price for government failure. Thank you. We will now proceed under the five-minute rule with questions.
▶ 1:17:22J recognizes the uh gentleman from Wisconsin, Mr. Tiffany for 5 minutes.
▶ 1:17:26Thank you, Mr. Chairman. Uh besides the work Mr. Shirley has done, I want to recognize Powerline who has done uh Yman's work exposing this over the last decade what has happened. And I just want to say uh Miss Larson, I live in northern Wisconsin. And there's 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.
▶ 1:17:52And 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
▶ 1:18:07I can't imagine. It's so it's it's 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 non-speaker. And now children like my son aren't going to hip service because they stole money from the government and faked these things. And it's just dis it's it is like I said disgusting
▶ 1:18:30with what's going on right now. What are the families that you're serving? What are they saying?
▶ 1:18:35They're scared.
▶ 1:18:36What are they doing? Everybody's scared. There are centers that are programs that have already shut down. Staff are leaving. I this week asked my staff who will take unpaid leave because we can't keep going like this. I I'm 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 receivable. If it's prepayment review, you may not get it.
▶ 1:19:02And Miss Larson, none of this would have happened if the fraud did not occur. Is that accurate?
▶ 1:19:10Mr. Dexter, could have something been done about this earlier?
▶ 1:19:14Yes. As I stated in my test opening testimony, um, in the years that I worked there, we identified how fraud was occurring, the [clears throat] loopholes that existed, and we
▶ 1:19:27What were some of the What were some of the warning signs, Mr. Dexter? Well, the fact that part of our job was to go and collect attendance records. Um, we would find attendance records that were either incomplete, um, non-existent, um, obviously there were times we found them to be fabricated because they were given to us way later. And, um, and the same with billing records.
▶ 1:19:53They were allowed 30 days after the end of the billing period to submit billing records. So they were not immediately available to us and um it kind of allowed overpayments or double payments to be overlooked. So um we had the attendance record issue. We had um the fact that there was no way to verify who was signing the children in and out.
▶ 1:20:20Um no way to verify what times those children were signed in and out. Could could I do a followup here? In Wisconsin, we learned um this month that Ibrahimia Dop, a Minneapolis school finance 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 uh deputy superintendent as salary of $240,000
▶ 1:20:51a year. Do you think it wise? Might that be a warning sign that this person was involved, may have been involved with fraud in Minneapolis? Um, shouldn't they be concerned in Wisconsin that this is going that they're hiring someone like
▶ 1:21:05Well, if somebody that they hire has a past history and practice of doing that type of stuff, I would be very lerary of it occurring again or that being the basis that they're hired. So, Governor Ivers uh refused to open the books and is blocking federal audits of our food stamp and Medicaid programs. Um, and he also vetoed four auditor positions in a recent budget.
▶ 1:21:35Um, do you think that is also a warning sign?
▶ 1:21:40Yes. If it's preventing or or ill- advised, would that be a better way to pose the question?
▶ 1:21:46Yeah. If it prevents the oversight and the ability to audit and look at the records to make sure can have a check check and balance system, I think that'd be very unwise because again that allows fraud to occur because um Mr. Shirley, what is happening in Minnesota, it could be happening throughout the United States. Isn't that correct?
▶ 1:22:12If there's one thing we've learned or leared as they say in Minneapolis, um isn't it possible that this is happening everywhere?
▶ 1:22:21Yes, and I believe it is.
▶ 1:22:24Mr. Chairman, I yield back.
▶ 1:22:26Gentleman yields. I now recognize the ranking member of the whole committee, Mr. Raskin, for his five minutes of
▶ 1:22:30Thank you very much, Mr. Chairman. Uh thank all the witnesses for your excellent testimony. Mr. Headed Godette. Um, the administration has 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 Council of the Inspectors General on integrity and efficiency.
▶ 1:23:01He's removed independent leadership at the Office of Special Counsel and Office of Government Ethics, blockading whistleblowers and numerous What is your assessment, Mr. Hetler Goddet, of the Trump administration's apparent systematic opposition to internal oversight mechanisms in the federal government?
▶ 1:23:22Uh, thank you, Ranking Member Raskin. Uh my assessment is that the last year or so has been one of the most anti-oversight, anti-accountability periods that I've witnessed in our federal government. And I think the things you laid out as well as others are the sort of proof in the pudding there.
▶ 1:23:40And I think 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, accountability, fraud, uh how seriously do they actually take it. There's been [clears throat] a lot of attention given to uh Donald Trump's extraordinary use of the pardon power, as in the pardon of uh violent insurrectionists and copers.
▶ 1:24:07But there's also been a forgiveness of a billion a half dollars in [clears throat] restitutionary fines um that various people had to pay and a lot of them are fraudsters. Uh the DOJ in Trump's first term brought bank fraud and tax evasion charges against reality TV stars Todd and Julie Chrysley. They were convicted in 2022.
▶ 1:24:33They owed more than $22 million in restitution to taxpayers and to their victims. But then Trump suddenly inexplicably pardoned them and forgave all of the money that they were supposed to be paying back to their victims. Todd Chris Lee bragged publicly about his get out of jail free card, jubilantly exclaiming the feds got effed. Let me give you one other example.
▶ 1:24:58Um Trump on April 23rd issued a pardon for Paul Walchuk, a former nursing home exec who pleaded guilty to multiple tax crimes. What he was doing was taking millions of dollars from the nurses and orderlys and doctors who worked for him at his facilities. Took more than $10 million that way.
▶ 1:25:17instead of giving it to the IRS um for uh 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 Burgdorf Goodman in Cartier. Well, he was sentenced to 18 months in prison for stealing his tax his employees tax withholdings.
▶ 1:25:40And he was ordered to pay his employees back $4.4 4 million for the money he looted from their accounts. So he was going to have to pay that back. But then he got his mom to go to a glitzy fundraising dinner for Donald Trump at Mara Lago and she paid a million dollars for her ticket. Then right after Trump was inaugurated in his second term, Walchuk petitioned for a presidential pardon arguing that he was the victim of political retaliation because they were Trump supporters.
▶ 1:26:11And what do you know? President Trump issued a complete pardon with forgiveness of all of the financial fines and restitution that Mr. Walchuk was going to have to pay back to his workers, the nurses and doctors in orderly. So that was forgiven. That was $4 million taken away from the victims of a fraud and given back to the perpetrator of the fraud. Okay.
▶ 1:26:35Now, if we had all day, we could go on all day with this because that's how their pay-to-play pardon system works. What does this do to our efforts to root out fraud and corruption systematically in the government and in crimes in different industries? I think it provides a perverse incentive structure.
▶ 1:26:59Uh I open my statement by saying that we all have a we all have an obligation and a responsibility to do what we can to prevent fraud and to hold perpetrators of fraud accountable. But that last bit holding a perpetrator of fraud accountable perhaps via conviction doesn't mean much if all one needs to do is uh contribute to the right pack or attend the right fundraiser and suddenly that accountability and that conviction is wiped away including the financial restitution you mentioned.
▶ 1:27:24So those kinds of actions are at direct cross purposes with any effort to promote a broader more systemic approach to rooting out waste fraud and abuse.
▶ 1:27:32Gentleman's time is expired.
▶ 1:27:33Thank you very much. And I yield back. Chair recognizes the chairman of the full committee, Mr. Jordan.
▶ 1:27:37Uh thank you, Mr. Chairman. Mr. Dexter, let me uh let me make sure we got this we got this right. Um, you get tips and complaints. Whistleblowers or others come to you and tell you something's not right at these child care centers in your state that are getting all kinds of taxpayer money. Is that right? That's how it started.
▶ 1:27:56That's correct. Okay. And then you go and do your work and you got 28 years experience investigating things and specifically in the crime and financial fraud area. Is that right?
▶ 1:28:07That's correct.
▶ 1:28:07And you go out and find out these childcare centers, there aren't any kids. No kids are there. I mean, there's some, but there's like you don't see the playgrounds. You don't see you don't see any any kids at a place where they're supposed to be helping children. And then you also find out most of them are run by Somali individuals. Is that
▶ 1:28:26That is correct.
▶ 1:28:26And then you make some recommendations. You said, "Here's what we should do." I think you put this on page two of your testimony. You said there's some basic things you should do. No, you said there would they didn't have biometric attendance system. They should do that. They should have electronic submission requirements. They need security cameras. You made some recommendations.
▶ 1:28:46And then what happened?
▶ 1:28:49They ignored your recommendations. But it didn't stop there, did it? They ignored your recommendations. They called you a racist. Right.
▶ 1:28:58Typical left. I always say the left will the left will tell a lie. Big media will report it. You tell the truth, they call you racist. Exactly what happened here. So they ignore your recommendations. They call you racist, but it even got worse than that if you can imagine. They started investigating you. Is that
▶ 1:29:18Yes. We were uh interviewed by a outside firm um for a report given to the office of legislative auditor. And
▶ 1:29:26what did that what did that what did that uh what did that report look like? What they say? They call you a race? What what the report say?
▶ 1:29:34The report basically um questioned our investigative tactics. um looked at how our how how our unit was managed
▶ 1:29:45even though you had 28 years experience in this particular area. Tips and whistleblowers came to you even though that was the whole catalyst for for doing this.
▶ 1:29:53Yeah. Okay. And the end result is what? The end result is Miss Larson who's actually helping people.
▶ 1:30:01She suffers and the people she helps suffers. That right, Miss Larson.
▶ 1:30:05Not to mention not to mention the the the fact that taxpayers are getting ripped off,
▶ 1:30:09but the people who do good work, who actually help people, you suffer
▶ 1:30:13the the disabled are paying for the money stolen.
▶ 1:30:17Yeah. And why do you think all this is the case? So, I mean, all this brings me to the this is seems to be a typical pattern, but in the end, you got to ask why. Why was when you point out what's going on, you have good people doing good work who suffer, the taxpayers are getting ripped off. Someone's got to ask, well, why did they take the not follow your recommendations, call you a racist, investigate you instead of just fixing the problem? Why' they do that? What could be the answer? Anyone want to hazard a Mr. Shirley, you want to hazard a guess why that's the case?
▶ 1:30:49Well, they simply use that as a deflection technique to make you not want to speak out against the fraud.
▶ 1:30:54Yeah. Seems to me it's politics though. You think it's politics, Mr. Dexter?
▶ 1:30:58Yes, I do.
▶ 1:30:58Yeah. The people at the top like, "Well, we 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 uh 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's not right here." They found the same kind of things you found, Mr. Dexter. And they said, "We're going to stop payment." And then it restarted. And the reason it restarted is because they threatened a racial discrimination lawsuit against the authorities there in Minnesota.
▶ 1:31:24So, okay, forget about the fact that when we do this, we restart the money, we're going to hurt good people like Miss Larson and the people she helps and rip off the taxpayers. We're going to do it all for politics. And we also found, interestingly enough, the attorney general in Minnesota was had a meeting with the key folks in this particular program and then they find out a couple weeks later they start sending campaign contributions. I think it's politics. I think it's politics driving it all.
▶ 1:31:51And that's why it's appropriate we're investigating here at the congressional level. That's why it's appropriate the Department of Justice has put in place a specific individual to focus on this, not only in Minnesota, but around the I talked too much. Anyone else want to throw I I'll give you Mr. Shirley, Miss Larson, a chance to say anything if you want. If not, I I'll yield 28 seconds to my to our chairman. I yield 28 20 seconds remaining my time to the
▶ 1:32:16Thank you. Thank you. So, Mr. Mr. Heather Godette, would it surprise you that Joe Biden issued uh pardons to someone named Crundell who had the largest municipal fraud in the country's history and had a restitution amount of $53.7 million that was never paid following the commutation. Would that surprise you, sir?
▶ 1:32:38Uh, that would not surprise me. And actually in my written statement, I outline how some pardons under the last administration, the Biden administration, they also fall into the same pattern of uh pardoning convicted fraudsters. So I'm in agreement with you
▶ 1:32:50Yeah. Thank you. And um without objection, my that that time is expired. So um without objection, Mr. Klein will be permitted to participate today's hearing for the purpose of questioning the witness if a member yields him time for that purpose. And now we're going to go to um Mr. Moore from Alabama.
▶ 1:33:11Thank you, Mr. Chairman. All this talk about pardons and uh the ultimate shy one of them was Hunter Biden. He got pardoned after Joe promised he wasn't going to do that on the way out. So anyway, that that's another pardon for another day. Um Miss Larson, I uh I'm impressed with your son. and I honestly thought he was your attorney when when you guys were sitting there. But uh were there early warning signs if acted on that could have prevented the fraud schemes from growing to the scale that we see now?
▶ 1:33:38I'd say yes. Um looking back, this smallie community in Minnesota has a high prevalence of autism and I know that because I serve a lot of minorities in my centers. Um so when these centers started popping up, I thought good for them, you know, like I I took care of my son. we have had a waiting list for five years. So I thought it was a positive.
▶ 1:33:59Uh and then it just started to go and go where now it's you know 400 plus of these and it started to I and I'm not I didn't nick Shirley it that's a verb now you know and go out and like go see because obviously I'm busy and that's not what I have time for but you know I think there were a lot of early warning signs. I think if anybody was actually paying attention
▶ 1:34:19they would have caught it.
▶ 1:34:20Oh 100%.
▶ 1:34:21Cuz you How long have you been in business? 20 years. over 20 years
▶ 1:34:24and you went through number of audits I think every year, right?
▶ 1:34:28Every year.
▶ 1:34:29So, how is it that these groups are getting away with it and you're under the thumb of the government auditing you every year? What why do you think that
▶ 1:34:36I either there's a double standard and they don't for whatever reason have the same expectations that we do. Um or they're just looking
▶ 1:34:46maybe chairman Jordan was on to something. Maybe it's politics.
▶ 1:34:50Um Mr. Shirley. Um, now I guess investigative journalists are known as right-wing social media influencers. So, um, can you confirm how many daycare centers you personally visited in Minnesota during your investigation
▶ 1:35:03during that first video we went to around seven.
▶ 1:35:07How did you select those facilities? I know you said earlier footprints in the snow, but how was it that you identified those facilities to go to initially? So the man David in the video, he had the daycarees with the CCAP funding and we just simply drove around Minnesota and around Minneapolis area.
▶ 1:35:22Took a lot of courage to do that, I would imagine. Probably more so now than than what it was when you initially did it. You 100 million views, you said?
▶ 1:35:29Yes. Over 140 million views on XO.
▶ 1:35:31So what was Mr. David's background? How did you connect with him? And and how did did he call you or did you reach out? He simply is just a man in Minnesota who has a passion for his city and he's been seeing fraud taking place for years and out of all the thousands of messages I get on Instagram and other platforms I just happened to read his and he provided me the information so I gave him a phone call
▶ 1:35:53and then from there just went to those different facilities. What was probably the most interesting thing as you were doing this? I I think I saw the video of we watched it and it looked like it was a number of facilities like in the same
▶ 1:36:07Yes. So in one building there was I believe three daycarees and there was no children and they were all receiving CCAP funding for separate daycarees. There was one day care we went to that one day it was closed by the government and then that same day it was reopened underneath another name and they both received CCAP funding.
▶ 1:36:28I bet Miss Larson they probably weren't getting audited nearly like you were.
▶ 1:36:32I would guess not.
▶ 1:36:33So how many daycarees are there in Minneapolis do we think are fraudulent right now? Mr. Shirley, any idea or the amount of money total? You got any idea on that? Well, they've frozen over $185 million and not a single business has been able to prove that they're a legitimate business yet.
▶ 1:36:47So, 185 million for sure that we know. Mr. Dexter, I got a question for you. What common patterns or warning signs usually indicate that the provider or the program may be committing for audits? You were doing your investigations and 28 years of experience. What are some of the indicators that you see that maybe that that should be a telltale sign or a red flag that there's fraud there? Well, one of the immediate signs that we saw when we would go out to first look at the location is where that was located.
▶ 1:37:17A lot of times they were located in uh commercial areas. And I'm not talking like strip malls or anything like that. I'm talking about like industrial uh areas where you wouldn't typically find a child care center. um we would notice that there was no play area um and if there was any play equipment it was bare minimum.
▶ 1:37:42Now there was an exception that if there was a playground area within a very short walking distance that would count but a lot of times we didn't see that. But the most glaring thing was that when we watched the centers, you know, we would do we would sit and watch it for a couple of days before we even put up surveillance cameras. We would watch and we would see little to no children present. Uh if anything, there would be a few kids.
▶ 1:38:10As you begin to blow the whistle, the the the investigator became
▶ 1:38:14gentleman's time is expired.
▶ 1:38:15I'll yield back, Mr. Chairman.
▶ 1:38:16Thank you. Chair recognizes the ranking member, Miss McBTH.
▶ 1:38:20Thank you, Mr. Chairman. When he began his second term, President Trump broke from historic norms and fired 17 inspectors general. People who serve as critical watchd dogss and prevent waste, fraud, and abuse. A federal judge held that these firings were illegal, but also held that she could not reinstate these people due to their important roles.
▶ 1:38:40As a result, the president has been able to appoint acting inspectors general who have themselves been removed after informing Congress that Trump officials are not cooperating with Mr. Hetler Gadet, how do these frequent firings affect the ability of the inspector general offices to prevent and investigate fraud?
▶ 1:39:02I think they fundamentally undermine it. Um, and they also create a real chilling effect for the inspector general who are left. um the incentive to do something that could upset the powers that be suddenly becomes a bit of a risky proposition. And so between the completely undermining them and the chilling effect, you are really dampening and damaging uh the ability to do real oversight.
▶ 1:39:24Thank you. And how does the politicization of inspector general appointments affect the morale and effectiveness of career investigative staff there within these offices? Um, it also has a severely negative effect on on morale and efficacy within the offices.
▶ 1:39:42You say I believe we can and should do more to prevent fraud and improve oversight so that all of our government efforts are doing the most that they can to help the American people. When the Judiciary Committee marked up the Republicans partisan big ugly spending bill, I offered an amendment that would dedicate half of 1% of funding to be used for oversight and fraud improvement and prevention. My Republican colleagues, they oppose the amendment. Mr.
▶ 1:40:10Hetler, uh, Godette, in your opening statement, you spoke on steps that Congress could take to ensure robust nonpartisan oversight. The Project on Government Oversight recently published an article, seven ways Congress should sharpen its oversight in 2026. asking this
▶ 1:40:33without objection.
▶ 1:40:34Thank you. Thank you. Is there anything else that you want to highlight from those recommendations?
▶ 1:40:40Sure. Yeah, I just want to uh pause to note that Congress really is the indispensable actor when it comes to doing oversight. Um there's supposed to be a somewhat adversarial relationship between the branches and Congress is supposed to be the primary adversary when it comes to the other two branches and conducting oversight, but that is predicated on Congress taking that oversight duty seriously irrespective of who is in charge of the other two branches. And so I think there's a political will uh issue there with oversight, but also there are some mechanical issues.
▶ 1:41:09So, Congress could do a better job of holding uh hearings that are a bit more bipartisan, a bit more focused on the facts as opposed to the uh the sizzle of a given uh anecdote or uh scandal. I mean, 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's not as sexy.
▶ 1:41:30It's not going to get you as many uh views on social media, but it's going to actually ideally lead to long-term sustainable, durable reforms that can really crack down on the problem.
▶ 1:41:40Thank you. And so the shortlived Doge office was supposed to cut fraud. Mr. Hetler Goddet, what did it actually do and how did its actions actually affect everyday Americans?
▶ 1:41:53Doze was a complete failure even on its own terms. uh the primary progenitor of Doge claimed that he was going to find $2 trillion. Then he moved that down to $1 trillion in waste fraud and abuse cut spending. But in 2025, we actually spent more money than we spent in 2024. Um at the opening of this fiscal year in October, we ran the largest opening month budget deficit ever run before at $285 billion. Uh we have hollowed out the key functions of a bunch of agencies.
▶ 1:42:24Um any claims that doze was effective either on cutting spending or promoting effectiveness or efficiency or just flat out undermine and undercut by the facts.
▶ 1:42:35And Mr. Hetler Goddet um because you have done investigations yourself, did you do any followup on Mr. Shirley's
▶ 1:42:44Uh so personally I I took a look at some of what had been done to try and backs stop what Mr. Shirley uh indicated in his video by professional journalists at CBS and by uh professional oversight practitioners like the inspector general in Minnesota. And as it turns out, they had a difficult time uh substantiating what Mr. Shirley was uh claiming to be true in his video. And in fact, they found counterveailing evidence, including having been provided security footage by one of those daycarees of Shirin being dropped off the very day that Mr.
▶ 1:43:13Shirley was supposedly there. So I think in my view I would have to uh I think I'd heir on the side of believing the professional journalist at CBS and the professional oversight practitioners at the inspector general
▶ 1:43:26Thank you. I'm out of time. I yield.
▶ 1:43:28Chair recognizes the gentle lady from Florida, Miss Lee.
▶ 1:43:30Thank you, Mr. Chairman. And so on that note, I think it's important that we return to a discussion of how these investigations were 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.
▶ 1:43:50This is a warning sign for every state that it is administering large-scale programs using taxpayer dollars and we need to get to the bottom of how to identify this type of fraud and prevent it from continuing to occur. So, Mr. Dr.
▶ 1:44:07Dexter, I'd like to go back to your testimony uh both what you have shared with us already about your extensive background investigating and analyzing program fraud and the methods 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 uh begun in part by looking at funding data.
▶ 1:44:36And I am interested in how your office would use things like funding data, use statistics, and other information and evidence to begin to develop these cases.
▶ 1:44:48Well, it wasn't hard to find uh the funding amounts. Uh we looked at the centers that received CCAP funds and then we just we listed them out. We had what was originally referred to as the top 100 list and it was based off of centers receiving the most CCAP funding and that was generated through um the billing process and you know the the people that administer the funds.
▶ 1:45:16And when you looked at that list, did it turn out that there were certain facilities that were outliers in some way, either because they were receiving a larger amount of funding uh based on student population that appeared typical or because of where they were located. Tell us how you identified which facilities warranted further review.
▶ 1:45:38Well, when we started looking at the uh centers that were receiving the most funds, the investigators were each assigned cases were assigned centers and we first started looking into what the billing pattern was or what the billing amount was.
▶ 1:45:54how many children were being build at these centers and we would have centers that were billing for 120 plus children and um looking at the different days and times kind of establishing a pattern that just was outside the realm of a uh typical daycare center.
▶ 1:46:13So [clears throat] in other words, you used objective data and evidence as the foundation to proceed further with your
▶ 1:46:23Yes. in order to o to start the investigation. That's what we would begin with.
▶ 1:46:27And in your experience, wouldn't you also say that that is the typical method or atypical method for beginning and analyzing a potential fraud case of any nature in any community.
▶ 1:46:41Yes. Because in order to do the investigation, you first have to find out if it warrants an investigation and to what extent that investigation would would be. And now, isn't it also correct, you mentioned in your testimony systemic weaknesses that allowed the large-scale fraud even after you had developed substantial evidence that there was in fact fraud occurring, that there were institutional and systemic barriers that prevented you from successfully moving
▶ 1:47:11these cases through prosecution. And indeed, in your testimony, you note that in 2019, you chose to retire because the process had become so constrained that meaningful work was no longer possible. Tell us about the barriers and ultimately that profound frustration that led you to retire.
▶ 1:47:32Well, when we were originally hired, when this unit was originally created and we were hired, we were hired with the understanding that our job was going to be to investigate fraud and stop it. And as we proceeded through with that, um it wasn't by our doing that it turned out that the centers we investigated were predom predominantly Somali.
▶ 1:47:53But once that was kind of brought out to light, the roadblocks that were put in front of us being called racist, being called um before these boards to be investigated um and basically it wound up turning us into auditors. Um we wound up just simply reviewing uh 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
▶ 1:48:22which in the end allowed this pattern of conduct to continue to occur. Did it
▶ 1:48:27Thank you, Mr. Chairman. I yield back.
▶ 1:48:28Gentle lady yields. Chair recognizes now the gentleman from North Carolina, Mr.
▶ 1:48:32Thank you, Mr. Chairman. Uh to my colleague from Florida, thank you for that line of question. I'm going to pick up where she left off in regards to the testimony that we've 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 that it is under control. Is that your interpretation of where we are, Mr. Dexter? I believe the fraud is still going on. I don't think anything has changed from what I've seen with Mr. Shirley's videos.
▶ 1:49:01Um, I'm seeing in his videos the exact same things that we were seeing back from 2014 to 2019 when I worked there.
▶ 1:49:10And it's astounding to me when I was looking at some of the the uh the footage, the the evidence, there was almost a sense of we are owed this money that we're stealing. How dare you investigate us? Did you ever en encounter that type of attitude when you were performing these investigations?
▶ 1:49:25There was an underlying attitude like that. um that we were taking away their money and that it wasn't fair to them.
▶ 1:49:34In your investigation, sir, were they as was the fraud as obvious as it seems to me that it it uh appeared in the videos and the other evidence that I've
▶ 1:49:43Yes. As a matter of fact, when we would go out to do our investigations, one of the things that um we would have to do or I would have to do is we would scout out a location for our surveillance cameras that allowed us uh direct line of sight to the centers, all their accesses. A lot of that because of the location where we were in these industrial commercial areas meant we had to go to businesses and ask them permission.
▶ 1:50:08And the number one comment they made was, "Oh, you mean that daycare center over there where there's no children?" So, everyone else around it saw it.
▶ 1:50:16In regards to your investigation, sir, I'm assuming that you did not just investigate daycare fraud. What other types of fraud did you investigate?
▶ 1:50:23Um, no. Our our function was strictly childcare fraud, but some of that over overlapped into um even though we didn't investigate it, a lot of it was also tied into the medical transportation and Did you ever investigate single entities that that were appearing as though they were committing fraud in multiple diff or multiple avenues?
▶ 1:50:46I'm sorry. Can you
▶ 1:50:47So it's like was there one facility that was a daycare? It was also associated with a medical transport. Were there people who were double dipping in the fraud in your investigations?
▶ 1:50:56Not that we saw as far as mult uh different organizations, but there were where one daycare center owner owned multiple daycare centers. So what we saw was more within the daycare center.
▶ 1:51:11Miss Larson, thank you for being here. I echo my colleague sentiment from Alabama. Your son is very impressive. What's his name?
▶ 1:51:18His name is Kaden.
▶ 1:51:19Kaden, thank you for being here today. You look sharp. You're doing great. Uh let me just talk to you about uh these various audits that you were subjected to. How rigorous were they?
▶ 1:51:29Very. They'd be there for hours come in and say, you know, I want to see these files for these kids at this date and this time. Was there any way that you could have uh tricked them, concealed it? If you had not had any children there, would it would it have been
▶ 1:51:43Absolutely not.
▶ 1:51:44In regards to the services that you've rendered first, thank you.
▶ 1:51:47Thank you.
▶ 1:51:47And then in terms of the budgets that you require, how does it make you feel when you hear uh firsthand accounts that hundreds of millions of dollars have been taken out of the country in suitcases to hostile nations? I can't even respond the way I feel about that. But I I will say it's still happening to the questioning you I mean there's only two autism centers that have actually been shut down.
▶ 1:52:12Of all of these that are going on. So what they're doing is this prepayment review and putting us through this AI system at Optum to look for suspicious claims which is why we're being our funds are being held. And it's not going to work.
▶ 1:52:25I'm going to tell you it's not going to work. I mean they just need to do what Nick did. go and see that there's no kids there. Go and check it out.
▶ 1:52:32And what Mr. Dexter did, data driven
▶ 1:52:36Without any preconceptions, without any prejudices, and then holding the fraudsters to account. And when he did that, he was called a racist.
▶ 1:52:42It's astounding. It is astounding. And you said that you helped many uh many patients, diverse patients. How have those patients uh been harmed by this administration in Minnesota, the Walls
▶ 1:52:55They are all being harmed if I shut down next week. Is that what you're up
▶ 1:53:00Well, if I haven't gotten paid now, the last date of service was December 5th. I'm over $400,000 in debt. My payroll is $250,000 every two weeks, and we get paid every two weeks. So, on Sunday night, I'll know if I get any money. I haven't been paid a dime. All my claims have been held. So, I'm I'm, you know, preparing to apparently in Minnesota, too, I can't just pause services. is if I pause my services, then the DHS can say, "I'm sorry you've lost your license to serve the kids through this program."
▶ 1:53:29So, I don't know what they think we're supposed to do.
▶ 1:53:32Well, again, thank you for being here. Uh I appreciate all the testimony. Sorry I didn't get to everybody else. There's a lot of questions. Mr. Chairman, I yield back.
▶ 1:53:39Gentleman yields. I recognize the gentleman from California, Mr. Kylie.
▶ 1:53:43Uh thank you, Mr. Chair. Uh Mr. Shirley, thank you for your testimony today and uh and the and the work that you've done. uh you know Americans uh hear these numbers of the fraud that we have and you know whether it's 10,000 or 10 million or 10 billion uh sometimes the numbers you almost become desensitized to it and so the way that your uh video was able to show people uh the fraud sort of in real life actually happening I think opened a lot of eyes and has helped to catalyze um a level of scrutiny uh that
▶ 1:54:13we really should have had uh before. So you you mentioned in your testimony that you think that what you discovered in Minnesota uh that uh this is not uh isolated to that state but likely exists in other parts of the country as well. Correct.
▶ 1:54:28What makes you think that?
▶ 1:54:29Well, now you're seeing since I've posted that video, lots of other people have started to go to other locations. For instance, in Ohio or in Maine or in California, they're also seeing the similar fraud take place in other daycarees, for instance, in a lot of other locations. Yeah, I have a particular interest in California, uh, being from that state and, uh, I, uh, we know that there's been a lot of fraud. There was $ 32.6 billion that's been confirmed in unemployment insurance fraud. Uh, there's 1.2 million fraudulent community college applications.
▶ 1:54:59Have you gotten any sense or have you seen any signs there that sort of are similar to what aroused your suspicions in Minnesota?
▶ 1:55:06Yeah, and fraud in California might be worse than the fraud in Minnesota.
▶ 1:55:09What makes you say that? Well, $24 billion went missing for homelessness. They've been trying to build this train for years, yet there's hardly anything to prove for that. Fires.
▶ 1:55:21Yeah, those are good points. So, uh, you look at you let's let's run through a couple of those. Uh, 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 what results from that spending and there's nothing. So, $24 billion in homelessness and yet the homeless population went up and a state audit found that they couldn't even uh figure out where the money went or what the outcomes linked to that spending were. Is that something that is kind of a red flag for you?
▶ 1:55:48Yeah, it's a major red flag and you don't even have to be smart to be able to know that. [laughter] That's a red
▶ 1:55:53Well, unfortunately, our state legislators haven't managed to figure that out or at least the governor hasn't. So, what are you saying about
▶ 1:55:59They're not smart. No, but uh yeah, I mean it's so obvious and that's what we saw in Minnesota is how complicit the government has been in enabling this fraud to happen. Quality Laring Center had over 90 violations yet they continue to give that daycare $1.9 million.
▶ 1:56:12Yeah, that's a great point that there's uh the political accountability just hasn't been there and that's what enables it to uh to to continue. Uh so then you mentioned the home the highspeed rail as well. Uh so there has been about $18 billion spent so far. No track has been laid and not a single passenger has has ridden the train. Uh so when you spend $18 billion on a train and there's no train, does that raise suspicions for you?
▶ 1:56:35So you think that's something might be someone worth looking at?
▶ 1:56:37For sure.
▶ 1:56:38We also had a $650 million 911 service that they scrapped after six years. So absolutely no value from it. Maybe that's another example where there might at least be questions.
▶ 1:56:47I think you got a lot in California.
▶ 1:56:50All right. Well, we look forward to seeing what you find. We're certainly trying to use whatever tools we have here to bring more accountability uh in California as well. Mr. Dexter, I wanted to also ask you a couple questions about uh your work because um you have extensive experience on the law enforcement side trying to detect fraud. That's actually how in California we discovered the EDDD fraud, the the unemployment uh fraud uh is it wasn't uh the state suddenly uh figuring it out.
▶ 1:57:15it was uh district attorneys 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. So um is uh is this something that you encounter like what kind of internal controls uh make it so fraud is more difficult and what type of you know lack of internal controls make it so fraud is easier?
▶ 1:57:38Well, I would say the the biggest thing was the fact that when we tried to investigate this um 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 um shut down investigations.
▶ 1:58:02They made us uh you know in light of the report from this outside management firm, we spent nearly a year pulled away from our [clears throat] investigations because one of the things they determined was that when our unit started, we didn't have a proper case management system for uh recording and keeping track of the tips.
▶ 1:58:25So, as investigators, we instead had to spend nearly a year entering past complaints made to DHS into a newly created database. We couldn't we couldn't do our investigations because of that. So they they kept us from doing our work
▶ 1:58:45Yeah. Uh so the states that make fraud detection a priority have less fraud than those that that actively uh contravene efforts like yours. Thank you, Mr. Chair. I yield back.
▶ 1:58:53Thank you. Gentleman's time is expired. Recognize the uh ranking member, Mrs. McBth, for some uses.
▶ 1:59:00Thank you, Mr. Chair. I'd like to uh ask unanimous consent to enter into the record an article Republicans claims of fraud are pretext for unpopular and d and drastic med medicaid cuts
▶ 1:59:10without objection.
▶ 1:59:11Thank you.
▶ 1:59:13And so I have
▶ 1:59:14Oh, I have something you see. Yeah, please go ahead.
▶ 1:59:16Actually, forgive me. I have a handful of them here, Mr. German. Um the one is a letter dated October 21, 2025 from Representative Benny Thompson to Robert F. Kenny Jr. regarding the decision to resin the $ 101 million penalty imposed on Mississippi. Uh press release dated September 17, 2025 titled Governor Walls issues executive order directing state agencies to take additional steps to combat fraud.
▶ 1:59:42Executive order 251 uh titled preventing fraud and establishing the financial crimes and fraud section of the Department of Public Safety signed by Governor Tim Walls January 3rd, 2025. Um, [clears throat] article dated December 2nd, 2025, titled, "Trump calls Somali immigrants garbage as US reportedly targets Minnesota community." Article dated January 9, 2026, titled, "Five states sue administration for withholding billions in social safety uh, net
▶ 2:00:12funds." Article dated January 10, 2026, titled, "Behind the Somali daycare panic is a mother and son duo angling to become top mega influencers." Article dated December 31, 2025, titled, "Right-wing YouTuber behind viral Minnesota fraud video has long anti-immigrant history." Article dated January 11th, 2026, titled, "Fact check: What's Really Happening with Childcare Fraud in Minnesota?" And finally, article dated January 13, 2026 titled, "The Trump administration says
▶ 2:00:42it's cracking down on fraud, but it gave a red state a pass."
▶ 2:00:46Thank you, Mr. Chairman.
▶ 2:00:47Without objection, chair recognizes Miss McBth again for the UC.
▶ 2:00:51Thank 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 millions 400 could cost families 400 million by Julia of the Century Foundation. Without objection, I recognize myself for a series of UC's. From Fox News, Biden clemency for convicted fraudsters met with outrage, slap in face.
▶ 2:01:15From CNN, victims shocked after Biden grants clemency to kids for cash judge and $54 million in Beasler. And from Axios, Biden sets presidential record on pardons and clemency. Also, uh, Minnesota daycare expose journalist strikes again in part two names the hub of the fraud wheel. 70 78th defendant charged in feeding our future fraud scheme from US attorney's office district of Minnesota.
▶ 2:01:45Suitcases filled with millions in cash flew out of MSP airport. XTSA agent connects dots years later from survival world from the US Department of Health and Human Services. HHS freezes childcare and family assistance grants in five states for fraud concerns. From the US Attorney's Office, District of Minnesota. Six additional defendants charged. One defendant pleads guilty in ongoing fraud schemes. This is from the local uh Fox News in Minneapolis.
▶ 2:02:15Through the years a decade of investigating fraud, US Department of Homeland Security release you. 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 Minneapolis St. Paul Airport. From MSN, foreign ATM, Somali cash exodus from Minneapolis exponentially larger than other major US airports.
▶ 2:02:45From Breitbart, SBA cutting off grants to Minnesota over reports of Somali fraud. Vance praises YouTuber Nick Shirley reporting on Minnesota fraud. Waltz and Omar using ICE operations to distract from fraud scandal. And from just the news in Somali fraud scandal, Republicans probe evidence of a blue state election scheme from the New York Post.
▶ 2:03:08Ring leader of $250 million Minnesota welfare fraud scandal ordered by judge to forfeit Porsche and luxury From lifez.com, TSA whistleblower. Somali regularly flew out with suitcases stuffed with millions in cash. From Fox News, Minnesota welfare fraud probe targets Somali hala money transfers from the Star News Network. Feds probe hundreds of millions in suspected Somali cash and luggage leaving Minneapolis airport.
▶ 2:03:39From USCIS, USCIS announces results of Operation Twin Shield, a large-scale immigration fraud from PBS. Gnome says Homeland Security is investigating fraud in Minneapolis. From Cornell Law, this is the 18 USC section 666, theft or bribery concerning programs receiving federal funds. Also same source, 18 USC section 641, public money, property, or records.
▶ 2:04:07Also from the same source, 18 US code 10001 statements or entries generally. And without objection, I now recognize myself for my five minutes of So, um, I have read all of your statements and I do thank you, Mr. Headler Gadet, for your recommendations. Mr. Dexter also had some recommendations. Uh, I think those are precient. I think those are important.
▶ 2:04:36Um, but I I also have to bring some additional information out just because it's in my nature. I got I got to do it. So, Mr. Hetler Godet, you've been talking about the IG's because you were asked about the IG's. Do you know how many cases, for instance, uh criminal cases are being investigated, say, by the Department of Homeland Security IG right now?
▶ 2:04:58I don't know the uh number off the top of my head. No.
▶ 2:05:01Would it would it surprise you if you there were 650 ongoing cases with 200 of those being COVID related?
▶ 2:05:07That would not surprise me. Nope.
▶ 2:05:08And do you know how many audits they have going right now?
▶ 2:05:11Nope. They have 60 audits going right now with another 20 uh uh investigations going. That sounds to me like the IG there at least in DHS is not being chilled because uh of the appointment of temporary IG's. Am I wrong on that or am I misconstring that
▶ 2:05:29one thing about the DHSG Mr. Joseph Kafari is he was actually appointed under uh the first Trump administration and he has remained ever since. Um, we actually at the project on government oversight have long recommended that Mr. Kafari be fired because he has had a long and demonstrated track record of sloww walking investigations at DHS particularly when it comes to abuse of and other issues with DHS agents
▶ 2:05:52and and yet the oversight committee uh for the IG's didn't uh adhere to that recommendation. So anyway, the point I I felt that point needed to be made. Um, additionally uh Mr. Dexter, uh, you looked at some of the same kind of, uh, EV physical evidence that Mr. Shirley looked at,
▶ 2:06:13um, with regard to physical presence at the various daycare facilities that you were ex examining between 2014 and 2019. Is that true?
▶ 2:06:22And you saw basically the same kind of physical evidence um, that Mr. Shirley uh, exposed.
▶ 2:06:30That's correct. You also looked at funding data and you also had
▶ 2:06:35Yes. And um I I just I find it interesting that um uh local news which reported on the fraud, other local news reporters who uh reported on the fraud um credibly agree with the findings of Mr. Shirley. Is that what you have seen as well, Mr.
▶ 2:06:58Yes. um Fox 9 News in Min in Minneapolis. Um they followed a lot of our our cases and did stories on him. And so so I I I mean the the very notion of trying to discredit Mr. Surely because he got a lot of views or that some CBS reporter disagreed and said they couldn't find the evidence actually in my mind discredits the CBS reporter.
▶ 2:07:29That's because I mean I appreciate the ranking member having cited the Arizona fraud which I also con constantly cite is a massive fraud in Arizona. Not just the 2.5 billion, but there's an essential another additional allegation of about 7 billion dollars per year fraud in Arizona. I think there needs to be a change there.
▶ 2:07:53I think we need to get a handle on this not just in Minnesota but nationwide because what we've seen in Miss Larson's those who are conducting themselves according to the law delivering services are the ones that also get punished but if you're a fraudster somehow you're able to keep on going and the fraud hasn't stopped. Mr. Surely, have you seen any evidence?
▶ 2:08:21You said twice today that $185 million uh of recipients um not one of them have been able to demonstrate that they are a legitimate
▶ 2:08:31No, in fact, they're actually actively suing the HHS to prevent receing over any information.
▶ 2:08:39Right. So, they don't even want to give the information that would be required of an audit that would be required from a separate uh uh independent investigation. They want they want a court to intervene and enjoin uh and prevent them from having to respond to this kind of investigation. Is that correct, Mr. Shirley?
▶ 2:08:57That is correct.
▶ 2:08:58So, I mean this is the thing and I I I think I'm listening to the panelists. I think everybody on the panel I think everybody up here we all want to stop the fraud. But the the bottom line is it's so infused with politicization that it it is preventing us from from just sitting down there and saying, "Okay, we got a symptom in Minnesota and we're going to fix it." I think the symptoms being exposed is critical because then it actually motivates people to
▶ 2:09:28try to get to the the root cause. I'm out of time. Um and we have no other members uh here. So I just want to thank each one of you from Mr. Mr. Dexter, Mr. Heather Goddette, Mr. Shirley and Miss Larson for being here and giving us your testimony. I really really appreciate it and I would encourage my my my colleagues to be better stewards and have better oversight because otherwise Mr.
▶ 2:09:56Shirley's generation is going to be paying through the wazoo, which um right now means 40 trillion dollars in national debt. So, thank you all. Appreciate it. We are adjourned.