KEY ALLEGATION: The Minnesota Department of Human Services (DHS) has a disturbing pattern of shielding internal fraud and systemic abuse—promoting officials implicated in mismanagement while customers are defrauded and programs collapse. Despite repeated failures, no meaningful accountability has occurred.
Massive Fraud Uncovered—But Who Pays the Price?
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Acting U.S. Attorney Joe Thompson has revealed that the total fraud in state programs may exceed $1 billion, including in Medicaid and the Housing Stabilization Services program in 2025. About $500 million has already been prosecuted.
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As a result, the DHS has terminated the Housing Stabilization program and frozen payments to dozens of providers.
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Despite FBI investigations and legislative demands for federal audits, DHS remains its own judge, jury, and operations team.
Related: Minnesota Tackles Medicaid Fraud Amidst Federal Funding Cuts and Calls for Reform
Promotions, Not Prosecution — A Culture of No Consequences
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Shireen Gandhi, who oversaw compliance as Deputy Commissioner for Agency Effectiveness, is now serving as Temporary Commissioner and leading efforts to shut down the very fraud-ridden program she once oversaw.
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Previous commissioners—Jodi Harpstead and Emily Piper Johnson—were appointed during Democratic administrations and later promoted elsewhere amid massive financial mismanagement.
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Under Johnson in 2015, over $1 billion in fraud was reported; the agency allegedly concealed abuse using an “800 MAARC” hotline rerouting calls back within DHS rather than to independent investigators.
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Under Harpstead, misconduct surged—but the agency chose to “break up the agency” instead of holding anyone responsible.
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Lucinda Jesson, previously appointed just after the Jensen v. Minnesota DHS case for abuse and exploitation in state facilities, was later promoted to a judgeship—without public accountability for the 2015 Class Action which was then filed against Emily Piper Johnson whilst Shireen Gandhi was Deputy commissioner for fraud (and abuse of vulnerable adults, which just as today, is never being brought into focus) for actions that stretched back 15 years to 2000. That case completed in 2023, without any justice or future resolution for black victims of the crime, just in time for Shireen Gandhi to be promoted to the position of Commissioner to reside over the the 2025 fraud cases which she was tasked with overseeing as deputy commissioner since 2022. Now after this farce of responsibility plastered all over the media since fall 2025, the U.S. Attorney has abandoned investigation and referred to the Minnesota Department of Human Services own Office of Inspector General.
The Fraud Committee’s response is to consider terminating program eligibility for vulnerable Minnesotans—individuals who have never received the care they need, whose complaints and injuries have been ignored, and whose damages remain unaddressed—while also limiting future funding to them.
What more evidence is needed to recognize this as a “money funneling operation”—a systematic racketeering scheme operating within the Minnesota Department of Human Services—at the devastating cost of generational loss of health, freedom, and lives of Minnesota’s most vulnerable citizens, who have done no wrong and still wait for access to medical treatment amid deliberately engineered "gaps" created by government fraud?
- How do seventy-seven fake Housing Stabilization Programs get past a deputy commissioner and commissioner if their not pay-offs?
- And why are those same individuals employed while the programs are charged with returning money if this is not government racketeering?
- Why doesn't the general public know the name Shireen Gandhi as they now know the term Family Stabilization Program while she collected a salary to prevent such things from happening?
- Why is there not a transparent list beginning with her, and moving down with every DHS employee's name on those approved applications and payment disbursements released to the tax-payers along with their termination?
If this were any other business, that’s exactly what would happen—wrongdoers held accountable and fraud addressed. But not when that business is the Minnesota Department of Human Services. It’s a complete farce to claim that fraud has been tackled when none of the individuals responsible have faced consequences, and we’ve only heard from two victims. Obviously, criminals will continue exploiting a system that imposes no accountability on its own workforce. There will be more fraud—there has to be—as long as DHS employees remain immune from accountability.
Systemic Self-Regulation and Collusion
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DHS leadership has upheld 100% internal control, blocking external access to misconduct reporting, denying victims and media oversight, and eliminating transparency. No individual has been held accountable despite catastrophic financial and human costs.
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This system has rewarded, not penalized, those whose mismanagement enabled fraud and abuse. Victims are left voiceless. Only those with money and privilege can seek justice.
The Urgency of Real Oversight
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House Republicans, including Rep. Kristin Robbins, have formally demanded a federal audit to uncover DHS's corruption.
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Lawmakers and investigators agree: external oversight is urgently needed to halt the endless cycle of fraud, self-regulation, and promotion-over-prosecution.
A Call for Justice, Not Cover-Up
Minnesota DHS’s leadership structure desperately needs reform. Time and again, programs collapse, fraud becomes public, and those responsible are quietly promoted to protect the system—not dismantle it. This must end. We demand:
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Transparent public investigations
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Real accountability, not reward
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Meaningful external oversight
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Real justice—not just financial clawbacks.
The fraud is real, the victims are real, and covering it up is no longer acceptable.
Axios. (2025, July 24). Top federal prosecutor says Minnesota’s fraud total could surpass $1 billion. Axios. https://www.axios.com/local/twin-cities/2025/07/24/medicaid-housing-fraud-minnesotaAssociated Press. (2025, March 19). Minnesota jury convicts alleged ringleader of massive pandemic food fraud scheme on all counts. AP News. https://apnews.com/article/847f42be252ecd373c60125fd4fae6e9
Minnesota Department of Human Services. (n.d.). Shireen Gandhi – Deputy Commissioner for Agency Effectiveness. Minnesota.gov. https://mn.gov/dhs/media/executive-staff-bios/media-bio-gandhi.jsp
Minnesota House of Representatives. (2025, February 24). House oversight panel targets child care fraud after reports of misuse. Session Daily. https://www.house.mn.gov/SessionDaily/Story/18508
KSTP-TV. (2025, July 18). DHS deputy commissioner to temporarily lead the agency until a permanent commissioner is appointed. KSTP.com. https://kstp.com/kstp-news/local-news/dhs-deputy-commissioner-to-temporarily-lead-the-agency-until-a-permanent-commissioner-is-appointed
Star Tribune. (2021, March 29). Legislative Auditor finds shoddy oversight of grants at Minnesota Department of Human Services. Star Tribune. https://www.startribune.com/legislative-auditor-finds-shoddy-oversight-of-grants-at-minnesota-department-of-human-services/600039865
KSTP-TV. (2024, October 11). Hundreds of autism centers popped up to meet demand in Minnesota. Now 85 are under investigation. KSTP.com. https://kstp.com/5-investigates/hundreds-of-autism-centers-popped-up-to-meet-demand-in-minnesota-now-85-are-under-investigation
Valley News Live. (2025, August 1). Walz freezes payments to providers as U.S. Attorney investigates Medicaid fraud. Valley News Live. https://www.valleynewslive.com/2025/08/01/walz-freezes-payments-providers-us-attorney-investigates-medicaid-fraud
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