Trump Administration Freezes Food Stamps To MN Amid Fraud Investigation

The Trump administration announced on Friday that it will suspend funding for food stamps and other hunger relief programs in Minnesota, as officials investigate what they described as "widespread and systemic" fraud associated with federal benefits programs in the state.

In a letter addressed to Gov. Tim Walz and Minneapolis Mayor Jacob Frey, Agriculture Secretary Brooke Rollins said the administration would freeze just over $129 million in annual funding from the U.S. Department of Agriculture to Minnesota and the city of Minneapolis.

Rollins said the state’s inability to stop fraud schemes led to the decision. Seventy-eight people have been charged since 2022 — 57 have been convicted — after federal prosecutors said the Minnesota nonprofit group Feeding Our Future stole $250 million from a program meant to feed children in need during the COVID-19 pandemic.

"While the full extent of fraud in Minnesota is not yet known, it is clear that, under your leadership — or lack thereof — fraudsters can take advantage of federal funds and the American taxpayer with impunity," Rollins said. "This necessitates federal action to protect taxpayer dollars until adequate safeguards can be established."

In the letter, Rollins accused the state of not providing federal officials with Supplemental Nutrition Assistance Program, or SNAP, rolls needed to recertify who receives the benefits. She also claimed the Minnesota Department of Human Services "repeatedly" reported incorrect information about SNAP to the federal government.

To restore food stamp payments, Rollins said the state would need to provide “payment justifications" for all federal expenditures in the next 30 days.

As of Saturday, Walz's office had not commented on the directive. The state’s attorney general, Keith Ellison, told The Associated Press he’d fight the new freeze of funds in court.

The move is the latest attempt by the administration to cut off funding for state programs amid allegations of fraud.

Last month, the U.S. Department of Health and Human Services froze all federal child care payments to the state of Minnesota, citing what officials described as widespread fraud concerns within the state’s child care system.

The decision followed the posting of a widely circulated video by conservative social media figure Nick Shirley, who alleged widespread fraud at Minnesota day care centers operated by people of Somali origin.

"We have frozen all child care payments to the state of Minnesota," Deputy Health and Human Services Secretary Jim O’Neill said. "We are finding the fraud."

However, a federal judge ruled Friday that the Trump administration cannot block federal money for child care subsidies and other programs in Minnesota and four other Democratic-led states for now.

Minnesota, along with California, Colorado, Illinois and New York, argued that the policy to freeze billions of dollars in funds for three grant programs was having an immediate impact and creating “operational chaos.” In court filings and a hearing earlier Friday, the states contended that the government did not have a legal reason for withholding the money from them.

U.S. District Judge Arun Subramanian, who was nominated to the bench by President Joe Biden, did not rule on the legality of the funding freeze but said the five states met a legal threshold “to protect the status quo” for at least 14 days while arguments are made in court.

Last month, the U.S. Small Business Administration also suspended thousands of Minnesota borrowers from its loan programs after identifying what it described as widespread suspected fraud tied to pandemic-era relief funding.

In a statement, SBA Administrator Kelly Loeffler said the agency reviewed thousands of COVID-era Paycheck Protection Program and Economic Injury Disaster Loan approvals connected to Minnesota borrowers.

According to the SBA, the agency has suspended 6,900 Minnesota borrowers linked to roughly 7,900 PPP and EIDL loans totaling approximately $400 million.

“These individuals will be banned from all SBA loan programs, including disaster loans, going forward,” Loeffler said, adding that cases would be referred to federal law enforcement where appropriate for prosecution and repayment.

The Associated Press contributed reporting.