EXCLUSIVE: Senate bill targets Minnesota-style ‘runaway fraud’ to force scammers to repay taxpayers
EXCLUSIVE: Iowa Republican Sen. Joni Ernst is introducing legislation Thursday targeting fraud in federal programs — a proposal that would set early-warning tripwires to flag suspected scams and push agencies to claw back taxpayer dollars, Fox News Digital has learned.
"It’s absolutely unacceptable that the fraud running rampant in Minnesota could end up costing taxpayers more than $9 billion," Ernst told Fox News Digital. "My Putting an N to Learing about Fraud Act will ensure this never happens again by putting more safeguards in place to detect scams early and require the recovery of any money ripped off from taxpayers."
Ernst’s office said the bill is designed to hit fraud on two fronts: tightening rules around child care payments and creating new spike alerts in health care programs to flag suspicious surges early, while also pushing the federal government to recover improper payments.
If passed, the bill would force state plans tied to federal child care dollars to pay providers based on documented attendance — not just enrollment — to prevent taxpayer money from going out for care that never happened.
It also underlines that states can reimburse providers after services are delivered rather than paying upfront. Providers taking federal funds would have to track attendance and keep those records for seven years, making them available for audits by the Department of Health and Human Services, the attorney general and the comptroller general.
On the healthcare front, the legislation would create new notification requirements tied to abrupt jumps in health billings and costs. States would be required to notify Health and Human Services when the amount being paid for a service increases by more than 100% in a year, or if the number of providers seeking payment increases by 100% in a year.
GOP SENATORS LAUNCH TASK FORCE TO CRACK DOWN ON FRAUD TIED TO MINNESOTA SCANDAL
Beyond early detection, the bill aims to force agencies to claw back funds either swindled from taxpayers or received in error.
It would direct the Office of Management and Budget to issue guidance to federal agencies to ensure improper payments are recovered and require inspectors general to report annually the amount of improper payments recovered by each agency.
MINNESOTA FRAUD WHISTLEBLOWER SAYS 'LACK OF GUARDRAILS WAS PRETTY SHOCKING'
The legislation follows the sweeping fraud scandal that continues to plague Minnesota. Dozens of arrests have been made, most of whom are from the state's large Somali population, as investigators uncover hundreds of millions of dollars in alleged fraud swindled from taxpayers through welfare and social services programs.
Federal prosecutors have said the fraud could total $9 billion.
"The swindlers in Minnesota and everywhere else soon are going to ‘lear’ the hard way that in the era of DOGE, crime no longer pays," Ernst added in a comment to Fox News Digital, referring to the viral "Quality Learing Center."
The misspelled Quality "Learing" Center daycare sign became a focal point of the fraud scandal after YouTube journalist Nick Shirley dug into alleged fraud in Minnesota.
Fox News Digital learned that Ernst will also name Minnesota Gov. Tim Walz as the January recipient of her office's "Squeal Award" for "failing to stop the runaway fraud in his own backyard." Ernst awards various lawmakers and government fraud scandals themselves the Squeal Award each month to spotlight "out of control waste."
The governor dropped out of his re-election effort earlier in January amid the fallout of the fraud scandal. Walz, who has served as governor since 2019, took ownership of the fraud as it occurred under his watch, but argued multibillion-dollar figures were "sensationalized" by Republicans.
"Whoever is in charge. Unlike the president, I’m governor now (and) whether these programs happen before we got here or afterwards, it doesn’t matter. We’re here now. We’re the ones fixing it. You have my guarantee on this, that I certainly will have this thing fixed," Walz said earlier in January.
Fox News Digital reached out to his office on Thursday morning for additional comment.
Ernst has long positioned herself as a leading Senate watchdog on waste and fraud, working with both Congress and the Trump administration to flag questionable spending.
She launched and leads the Senate Department of Government Efficiency caucus as President Donald Trump readied to reclaim the Oval Office, which works to snuff out government spending, reduce bureaucracy and enforce transparency, producing more than $15.1 billion in real savings.