In Minnesota, home to the largest population of Somali immigrants in the U.S. and the site of numerous fraud investigations, fraudsters received $12.5 million in student loan and education grant money, according to a letter Education Secretary Linda McMahon sent to Minnesota Gov. Tim Walz.
The letter calls on Walz to resign, and states that a new fraud prevention system at the department has found over $1 billion in “attempted financial aid theft,” including by international fraud rings and artificial intelligence (AI) bots.
“[Y]our careless lack of oversight and abuse of the welfare system has attracted fraudsters from around the world, especially from Somalia, to establish a beachhead of criminality in our country,” McMahon wrote. “As President Trump put it, you have turned Minnesota into a ‘fraudulent hub of money laundering activity.’”
“At the beginning of this year, the U.S. Department of Education became aware that fraudulent college applicants, especially concentrated in Minnesota, were gaming the federal postsecondary education system to collect money that was intended for young Americans to help them afford college,” she said.
McMahon referred to the fraudsters as “‘ghost students’ because they were not ID-verified and often did not live in the United States, or they simply did not exist,” and noted that, “[i]n Minnesota, 1,834 ghost students were found to have received 12.5 million in taxpayer-funded grants and loans.”
They “collected checks from the federal government, shared a small portion of the money with the college, and pocketed the rest–without attending the college at all,” according to the letter.
The letter comes after Somalis in Minnesota, in particular, have been exposed as having massively defrauded American taxpayers. They have even reportedly funded terrorists back in their country.
The news surrounding Somali fraud includes allegations of multiple scams, including claims that an autism “provider” enrolled Somali children who did not have an autism diagnosis in a welfare fraud scheme.
The outrage, among many other cultural problems with Somalis, has resulted in President Donald Trump intending to cancel some Somalis’ temporary protected status.
Trump recently pointed out that Somalis “contribute nothing” to American society. “I don’t want them in our country. I’ll be honest with you,” he said, noting Somalia is “barely a country” where “they just run around killing each other.”
While it should be utterly shocking to every American that government systems apparently don’t have basic safeguards to make sure that fraud like this is impossible, it is unsurprising that a culture defined by scam artists is finding every way to cash out. Just look at Rep. Ilhan Omar, D-Minn., who allegedly married her brother (which would likely constitute marriage, immigration, and tax fraud) in order to enter the United States.
“Scammers have gotten rich off federal housing, education, food stamp, and small business programs–even defrauding assistance for elder care and autistic children,” McMahon said in Tuesday’s letter. “Joining these criminals in their schemes have been Minnesota politicians who benefit–both in votes and donations–from fraudsters’ support. Like the radical Islamic terror groups overseas who receive Minnesota money to kill American servicemembers, Minnesota’s political elite has turned a blind eye and even helped facilitate the laundering of money that was meant to help America’s least fortunate.”
In June, the Department of Education announced a “nationwide effort to eliminate identity theft and fraud in the federal student aid programs for the fall 2025 semester,” and a requirement for institutions of higher education to verify “certain first-time applicants who are enrolled in the summer term,” as an immediate effort to combat fraud.
“Federal Student Aid (FSA) data indicates that the rate of fraud through stolen identities, particularly involving technologically advanced fraud rings, has reached a level that imperils the federal student assistance programs,” the department stated at the time.
Another obvious safeguard, also announced by the Education Department in June, required first-time student aid applicants to “present, either in person or on a live video conference, an unexpired, valid, government-issued photo identification to an institutionally authorized individual and the institution must preserve a copy of this documentation.”
As the department has noted, the Biden administration removed verification capabilities for student loans and “diverted resources from fraud prevention toward its illegal loan forgiveness efforts,” opening the door for massive fraud.
Breccan F. Thies is the White House correspondent for The Federalist. He previously covered education and culture issues for the Washington Examiner and Breitbart News. He holds a degree from the University of Virginia and is a 2022 Claremont Institute Publius Fellow. You can follow him on X: @BreccanFThies.
