SAINT PAUL – Governor Tim Walz has signed an executive order to create a centralized fraud investigations unit within the Bureau of Criminal Apprehension (BCA) and unveiled a legislative package aimed at bolstering fraud prevention and enforcement across Minnesota’s state programs.
The newly formed Fraud and Financial Crimes Unit will consolidate fraud investigations under the BCA, incorporating investigators from the Department of Commerce. The initiative also includes expanding the Attorney General’s Medicaid Fraud unit by nine staff members and granting agencies enhanced authority to halt payments to entities suspected or convicted of fraud.
“As long as there have been programs aimed at helping people, there have been fraudulent actors looking to steal from those who need them most. Our job is to stay one step ahead of them,” said Governor Walz. “Minnesotans rightly have no tolerance for misuse of taxpayer dollars.”
The Governor’s plan leverages technology, including artificial intelligence (AI), to enhance fraud detection. Minnesota IT Services (MNIT) will collaborate with industry experts to pilot AI systems capable of identifying payment anomalies in Medicaid programs. Other measures include introducing a provisional licensing system for developmental and behavioral intervention providers and increasing oversight of charter school management organizations.
“AI has the potential to revolutionize the fight against fraud by detecting patterns, predicting risks, and protecting resources with unparalleled speed and accuracy,” said MNIT Commissioner Tarek Tomes.
The legislative proposals also aim to increase penalties for fraud, introducing a new “Theft of Public Funds” statute with tougher sentences and criminalizing kickbacks as a state offense.
“Fraud and other financial crimes harm every Minnesotan,” said BCA Superintendent Drew Evans. “By combining state law enforcement resources, we will improve our ability to root out and prosecute these crimes with consistency, transparency, and efficiency.”
The comprehensive plan is projected to cost $39 million in the FY 2026-27 budget cycle and $15 million in FY 2028-29.