Walz Unveils Legislative Package to Strengthen Fraud Prevention and Penalties in Minnesota

SAINT PAUL, MN — Governor Tim Walz on Thursday announced a legislative package designed to strengthen fraud prevention, detection and enforcement across Minnesota state programs.

Walz introduced the proposal in St. Paul alongside Department of Human Services Commissioner Shireen Gandhi, DHS Inspector General James Clark and Minnesota Bureau of Criminal Apprehension Superintendent Drew Evans.

The proposal builds on previous actions taken by the administration, including the creation of the BCA’s Financial Crimes and Fraud Section, the appointment of a statewide Director of Program Integrity and executive orders directing agencies to address fraud. The plan also incorporates recommendations from independent experts and a program integrity roadmap developed for the state.

The package focuses on three main areas: oversight and detection, investigative authority, and criminal penalties.

Under the proposal, the state would expand audit and internal control capacity, strengthen oversight of Managed Care Organizations and use predictive analytics and machine learning to identify suspicious billing patterns. It would also prohibit legislatively named grants, requiring competitive grant processes.

The plan calls for establishing a centralized Office of Inspector General to oversee statewide fraud prevention efforts and refer cases for civil or criminal action. It would expand the BCA’s Financial Crimes and Fraud Unit and its subpoena authority, enhance on-site investigative authority within Minnesota Health Care Programs and add fraud prevention capacity at the Department of Revenue and the Attorney General’s Medicaid Fraud Unit. Individuals convicted of fraud would face permanent bans from state contracts and grants, including through new businesses or subcontractors.

The proposal also would create a new Theft of Public Funds statute, increasing penalties by 20 percent, and extend the statute of limitations to seven years for certain fraud-related crimes.

The package will be considered by the Minnesota Legislature during the current session.