Echoes of Pandemic Fraud: Minnesota's Somali-Linked Scandals vs. California's EDD Billions in Losses

December 28, 2025 MINNEAPOLIS/ST. PAUL - As federal investigators continue to unravel what U.S. Attorney Joseph Thompson has dubbed "industrial-scale fraud" in Minnesota, the state's burgeoning scandals - largely tied to the Somali American community - invite stark comparisons to California's massive unemployment fraud during the COVID-19 pandemic. Both cases highlight vulnerabilities in hastily expanded government aid programs, but they differ in scale, methods, and geopolitical ripples, with Minnesota's schemes potentially topping $9 billion in fraudulent Medicaid spending alone, while California's Employment Development Department (EDD) debacle saw over $32 billion siphoned off through identity theft and international crime rings.

The Minnesota saga began with the Feeding Our Future nonprofit, founded in 2016 by Aimee Bock, which prosecutors allege orchestrated the nation's largest single COVID-era fraud scheme by claiming to distribute 91 million meals to children - most of which were never provided. From 2020 to 2022, the group and its affiliates defrauded federal child nutrition programs of at least $250 million, using the funds for luxury cars, international travel to destinations like Dubai and Sydney, cryptocurrency investments, and overseas real estate in Kenya.

More than 75 people have been charged, with at least 56 pleading guilty and seven convicted, including Bock herself. Federal authorities are now seeking $5.2 million in restitution from her.

But the fraud extends far beyond meals. In 2025, investigations expanded to reveal systemic abuse in Minnesota's Medicaid programs, including autism therapy for children, emergency housing, home health assistance, and child care subsidies. Thompson announced on December 18 that over half of the $18 billion spent on these high-risk programs since 2018 could be fraudulent - a staggering potential loss exceeding $9 billion.

This includes schemes where providers billed for nonexistent services, paid kickbacks to parents in the Somali community, and even created "fake" day care centers that received millions despite lacking children or proper facilities. One such center, highlighted in viral videos, allegedly pocketed $4 million in state funds under Governor Tim Walz's administration. Thompson has described Minnesota as a "magnet for fraud," attracting "fraud tourism" from out-of-state exploiters, with new $50 million schemes uncovered daily.

In contrast, California's EDD fraud centered on unemployment benefits, where lax verification during the pandemic allowed scammers to file bogus claims using stolen identities. Out of roughly $177 billion in total benefits paid, estimates peg fraudulent losses at $32 billion or more, with much of the money flowing overseas to organized crime groups in Russia, China, Nigeria, and even North Korea. thejefferymead.substack.com +1

Domestic gangs and prison inmates also participated, using dark web data and money mules to collect debit cards. A recent state audit blasted EDD for ignoring early warnings, leading to a system that denied legitimate workers while enriching fraudsters. As of 2025, California has recovered only $5.9 billion and still owes the federal government $20 billion in loans for the program, with interest accruing amid ongoing fiscal woes, including 173,000 private-sector job losses since 2023.

Similarities in the Shadows of COVID ReliefBoth scandals exploited relaxed federal rules designed to speed aid during the pandemic. In Minnesota, waivers allowed Feeding Our Future to bypass oversight from the Minnesota Department of Education (MDE), which state auditors later criticized for relying on untrained staff to probe fraud allegations.

Similarly, California's EDD suspended identity verification to handle a surge in claims, creating a "symptom" of deeper bureaucratic disease, as one analyst put it. Prosecutors in both states have pursued aggressive charges: Minnesota's cases often involve community networks and kickbacks, while California's feature transnational elements, with 70% of funds leaving the U.S.

The human cost is comparable too. In Minnesota, fraudulent billing meant vulnerable children and adults missed real services, like autism therapy or meals.

In California, the fraud delayed payments to genuine unemployed workers, exacerbating economic hardship. Nationally, these are part of a broader wave of pandemic scams, with Minnesota's Feeding Our Future topping a list of multimillion-dollar schemes that also includes PPP loan rings in Texas and fabricated companies in California.

Divergences in Scope and ScrutinyScale sets them apart: California's $32 billion dwarfs Feeding Our Future's $250 million, though Minnesota's expanding probes could close the gap if the $9 billion Medicaid estimate holds. Minnesota's fraud is more localized, often within the Somali diaspora - drawing political fire from figures like President Trump and drawing scrutiny from federal agencies like Homeland Security over immigration ties.

California's, meanwhile, is a global affair, funding hacking and extortion abroad, with less ethnic specificity but more emphasis on systemic IT failures.

Recovery efforts lag in both. Minnesota has shuttered programs like Housing Support Services and seized assets, but restitution remains piecemeal. California's $5.9 billion clawed back is a fraction of losses, and the unpaid federal loan burdens taxpayers.

Experts warn these cases underscore the need for robust oversight in welfare programs, with Minnesota's Republican lawmakers like Rep. Kristin Robbins highlighting community whistleblowers, while California's audits call for IT reforms.

As Thompson noted, "When fraudulent providers bill for services they never deliver, vulnerable people miss care they desperately need."

With investigations ongoing, both states serve as cautionary tales for future aid distributions, reminding policymakers that speed in crises must not sacrifice scrutiny.