“Embedded Threats: Foreign Ownership, Hidden Hardware, and Licensing Failures in America’s Transportation Systems”

1[House Hearing, 119 Congress]2[From the U.S. Government Publishing Office]34                WHEN PUBLIC FUNDS ARE ABUSED: ADDRESSING5                FRAUD AND THE THEFT OF TAXPAYER DOLLARS6=======================================================================78                                HEARING910                               BEFORE THE1112                    SUBCOMMITTEE ON CRIME AND FEDERAL13                         GOVERNMENT SURVEILLANCE1415                                 OF THE1617                       COMMITTEE ON THE JUDICIARY1819                     U.S. HOUSE OF REPRESENTATIVES2021                    ONE HUNDRED NINETEENTH CONGRESS2223                             SECOND SESSION2425                               __________2627                      WEDNESDAY, JANUARY 21, 20262829                               __________3031                           Serial No. 119-513233                               __________3435         Printed for the use of the Committee on the Judiciary3637[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3839               Available via: http://judiciary.house.gov40                                __________4142                   U.S. GOVERNMENT PUBLISHING OFFICE4362-657                  WASHINGTON : 202644-----------------------------------------------------------------------------------4546                       COMMITTEE ON THE JUDICIARY4748                        JIM JORDAN, Ohio, Chair4950DARRELL ISSA, California             JAMIE RASKIN, Maryland, Ranking51ANDY BIGGS, Arizona                      Member52TOM McCLINTOCK, California           JERROLD NADLER, New York53THOMAS P. TIFFANY, Wisconsin         ZOE LOFGREN, California54THOMAS MASSIE, Kentucky              STEVE COHEN, Tennessee55CHIP ROY, Texas                      HENRY C. ``HANK'' JOHNSON, Jr.,56SCOTT FITZGERALD, Wisconsin              Georgia57BEN CLINE, Virginia                  ERIC SWALWELL, California58LANCE GOODEN, Texas                  TED LIEU, California59JEFFERSON VAN DREW, New Jersey       PRAMILA JAYAPAL, Washington60TROY E. NEHLS, Texas                 J. LUIS CORREA, California61BARRY MOORE, Alabama                 MARY GAY SCANLON, Pennsylvania62KEVIN KILEY, California              JOE NEGUSE, Colorado63HARRIET M. HAGEMAN, Wyoming          LUCY McBATH, Georgia64LAUREL M. LEE, Florida               DEBORAH K. ROSS, North Carolina65WESLEY HUNT, Texas                   BECCA BALINT, Vermont66RUSSELL FRY, South Carolina          JESUS G. ``CHUY'' GARCIA, Illinois67GLENN GROTHMAN, Wisconsin            SYDNEY KAMLAGER-DOVE, California68BRAD KNOTT, North Carolina           JARED MOSKOWITZ, Florida69MARK HARRIS, North Carolina          DANIEL S. GOLDMAN, New York70ROBERT F. ONDER, Jr., Missouri       JASMINE CROCKETT, Texas71DEREK SCHMIDT, Kansas72BRANDON GILL, Texas73MICHAEL BAUMGARTNER, Washington7475                                 ------7677                   SUBCOMMITTEE ON CRIME AND FEDERAL78                        GOVERNMENT SURVEILLANCE7980                       ANDY BIGGS, Arizona, Chair8182TOM TIFFANY, Wisconsin               LUCY McBATH, Georgia, Ranking83TROY NEHLS, Texas                        Member84BARRY MOORE, Alabama                 JARED MOSKOWITZ, Florida85KEVIN KILEY, California              DAN GOLDMAN, New York86LAUREL LEE, Florida                  STEVE COHEN, Tennessee87BRAD KNOTT, North Carolina           ERIC SWALWELL, California8889               CHRISTOPHER HIXON, Majority Staff Director90                ARTHUR EWENCZYK, Minority Staff Director9192                           C O N T E N T S9394                              ----------9596                      Wednesday, January 21, 20269798                           OPENING STATEMENTS99100                                                                   Page101The Honorable Andy Biggs, Chair of the Subcommittee on Crime and102  Federal Government Surveillance from the State of Arizona......     1103The Honorable Lucy McBath, Ranking Memer of the Subcommittee on104  Crime and Federal Government Surveillance from the State of105  Georgia........................................................     4106The Honorable Jamie Raskin, Ranking Member of the Committee on107  the Judiciary from the State of Maryland.......................     5108The Honorable Jim Jordan, Chair of the Committee on the Judiciary109  from the State of Ohio.........................................     8110111                               WITNESSES112113Scott F. Dexter, Independent Journalist114  Oral Testimony.................................................     9115  Prepared Testimony.............................................    12116Dylan Hedtler-Gaudette, Acting Vice President, Policy and117  Governemnt Affairs, Project On Government Oversight118  Oral Testimony.................................................    17119  Prepared Testimony.............................................    19120Nick Shirley, Independent Journalist121  Oral Testimony.................................................    29122  Prepared Testimony.............................................    31123Jennifer Larson, Chief Executive Officer and Founder, Holland124  Autism Center and Clinic125  Oral Testimony.................................................    33126  Prepared Testimony.............................................    35127128          LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING129130All materials submitted by the Subcommittee on Crime and Federal131  Government Surveillance, for the record........................    57132133Materials submitted by the Honorable Andy Biggs, Chair of the134  Subcommittee on Crime and Federal Government Surveillance from135  the State of Arizona, for the record136    An article entitled, ``Biden commutes sentences of 2 Illinois137        megafraudsters,'' Dec. 13, 2024, Chicago Sun Times138    An article entitled, ``North Dakota judge blasts Biden for139        setting fraudsters free,'' Dec. 18, 2024, North Dakota140        Monitor141    An article entitled, ``Biden commutes roughly 1,500142        sentences, pardons 39 in biggest single-day act of143        clemency,'' Dec. 12, 2024, Detroit News144    An article entitled, ``The Illinois lawmakers furious after145        Biden commutes sentences of State fraudsters,'' Dec. 13,146        2024, The National News Desk147      Not provide at the time of publication148    An article entitled, ``Biden clemency for convicted149        fraudsters met with outrage: `Slap in the face,' '' Dec.150        17, 2024, Fox News151      Not provide at the time of publication152    An article entitled, ``Victims `shocked' after Biden grants153        clemency to `kids-for-cash' judge and $54 million154        embezzler,'' Dec. 13, 2024, CNN155    An article entitled, ``Biden sets presidential record on156        pardons and clemency,'' Jan 20, 2025, Axios157      Not provide at the time of publication158    An article entitled, ``Minnesota day-care expose journalist159        strikes again--and part 2 names the `hub' of the fraud160        wheel,'' Jan. 21, 2026, The Blaze161    A press release entitled, ``78th Defendant Charged in Feeding162        Our Future Fraud Scheme,'' Nov. 24, 2025, U.S. Dept. of163        Justice164    An article entitled, ``Suitcases filled with millions in cash165        flew out of MSP airport; ex-TSA agent connects dots years166        later,'' Jan. 21, 2026, MSN167    A press released entitled, ``HHS Freezes Child Care and168        Family Assistance Grants in Five States for Fraud169        Concerns,'' Jan. 6, 2026, U.S. Dept. of Health and Human170        Services171    A press release entitled, ``Six Additional Defendants172        Charged, One Defendant Pleads Guilty in Ongoing Fraud173        Schemes,'' Dec. 18, 2025, U.S. Dept. of Justice174    An article entitled, ``Through the years: A decade of175        investigating fraud Minnesota,'' Dec. 29, 2025, Fox 9176    A press release entitled, ``ICE Continues Arresting Worst of177        the Worst in Sanctuary Minneapolis Including Pedophiles,178        Gang Members, and Drug Traffickers,'' Dec. 5, 2025, U.S.179        Department of Homeland Security180      Not provide at the time of publication181    An article entitled, ``TSA flags suspicious cash outflow at182        Minneapolis-St. Paul Airport,'' Jan. 21, 2026, MSN183    An article entitled, ``Foreign ATM? Somali cash exodus from184        Minneapolis exponentially larger than other major US185        airports,'' Jan. 21, 2026, MSN186    A report entitled, ``Report: SBA Cutting Off Grants to187        Minnesota After Nick Shirley's Reporting on Somali188        Fraud,'' Dec. 28 2025, Breitbart189      Not provide at the time of publication190    An article entitled, ``Vance Praises YouTuber Nick Shirley191        Reporting on Minnesota Fraud,'' Jan. 21, 2026, Breitbart192    An article entitled, ``Walz, Omar Using ICE Operations to193        Distract from Fraud Scandal,'' Jan. 20, 2026, Breitbart194    An article entitled, ``In Somali fraud scandal, Republicans195        probe evidence of a blue state election scheme,'' Jan.196        18, 2026, Just the News197    An article entitled, ``Ringleader of $250M Minnesota welfare198        fraud scandal ordered by judge to forfeit Porsche, luxury199        goods,'' Jan. 6, 2026, New York Post200      Not provide at the time of publication201    An article entitled, ``TSA Whistleblower: Somalis Regularly202        Flew Out with Suitcases Stuffed with Millions in Cash,''203        Dec. 11, 2025, LifeZette.com204      Not provide at the time of publication205    An article entitled, ``Minnesota Welfare Fraud Targets Somali206        Hawala Money Transfers,'' Dec. 11, 2025, Fox News207      Not provide at the time of publication208    An article entitled, ``Feds Probe Hundreds of Millions in209        Suspected Somali Cash in Luggage Leaving Minneapolis210        Airport,'' Jan. 7, 2026, Star News Network211      Not provide at the time of publication212    An article entitled, ``USCIS Announces Results of Operation213        Twin Shield, a Large Scale Immigration Fraud214        Investigation,'' Sept. 30, 2025, U.S. Citizenship and215        Immigration Services (USCIS)216      Not provide at the time of publication217    An article entitled, ``Noem Says Homeland Security is218        Investigating Fraud in Minneapolis,'' Dec. 29, 2025, PBS219      Not provide at the time of publication220    The document 18 U.S.C. 666, entitled, ``Theft or Bribery221        Concerning Programs Receiving Federal Funds,'' Cornell222        Law223      Not provide at the time of publication224    The document 18 U.S.C. 641, ``Public Money, Property or225        Records,'' Cornell Law226      Not provide at the time of publication227    The document 18 U.S. Code 1001, Statements or Entries228        Generally,'' Cornell Law229      Not provide at the time of publication230Materials submitted by the Honorable Lucy McBath, Ranking Memer231  of the Subcommittee on Crime and Federal Government232  Surveillance from the State of Georgia, for the record233    An article entitled, ``Republicans' Claims of `Fraud' Are a234        Pretext for Unpopular and Drastic Medicaid Cuts,'' Apr.235        16, 2025, Center on Budget and Policy Priorities236    An article entitled, ``Trump's Child Care Funding Freeze in237        Five States Could Cost Families $400 Million,'' Jan. 8,238        2026, The Century Foundation239    An article entitled, ``7 Ways Congress Should Sharpen Its240        Oversight in 2026,'' Jan. 13, 2026, Project on Government241        Oversight242Materials submitted by the Honorable Jamie Raskin, Ranking Member243  of the Committee on the Judiciary from the State of Maryland,244  for the record245    An article entitled, ``Trump's pardons forgive financial246        crimes that came with hundreds of millions in247        punishments,'' Jan. 20, 2026, NBC News248    An article entitled, ``Arizona Has Recovered Just 5% of249        Taxpayer Dollars Lost in a $2.5 Billion Medicaid Fraud250        Scheme,'' May 6, 2025, ProPublica251    An article entitled, ``Columbus mother and daughter among 15252        indicted in pandemic unemployment assistant scheme,''253        Aug. 22, 2025, The Columbus Dispatch254    A letter to the Honorable Robert F. Kennedy, Jr., Secretary,255        U.S. Department of Health and Human Services, from256        Representative Bennie Thompson, Oct. 21, 2025257    A press release entitled, ``Governor Walz Issues Executive258        Order Directing State Agencies to Take Additional Steps259        to Continue combating Fraud,'' Sept. 17, 2025, Governor260        of Minnesota Office261    An Executive Order 25-01 entitled, ``Preventing Fraud and262        Establishing the Financial Crimes and Fraud Section of263        the Department of Public Safety,'' Jan. 3, 2025, Tim264        Walts, Governer, State of Minnesota265    An article entitled, ``Trump calls Somali immigrants266        `garbage' as US reportedly targets Minnesota community,''267        Dec. 2, 2025, The Guardian268    An article entitled, ``5 states sue Trump administration for269        withholding billions in social safety net funds,'' Jan.270        9, 2026, PBS271    An article entitled, ``Behind the Somali daycare panic is a272        mother-and-son duo angling to be top Maga influencers,''273        Jan. 10, 2026, The Guardian274    An article entitled, ``Right-Wing Youtuber Behind Viral275        Minnesota Fraud Video Has Long Anti-Immigrant History,''276        Dec. 31, 2025, The Intercept277    A fact check article entitled, ``Here's what's happening with278        childcare fraud in Minnesota,'' Jan. 9, 2026, The 19th279        News280    An article enitled, ``The Trump Administration Says It's281        Cracking Down On Fraud. It Gave A Red State A Pass,''282        Jan. 13, 2026, Huffington Post283    An article entitled, ``Timeline: Fraud investigations stretch284        across Walz's tenure,'' Jan. 6, 2026, NPR News285286                                APPENDIX287288Materials submitted by the Honorable Andy Biggs, Chair of the289  Subcommittee on Crime and Federal Government Surveillance from290  the State of Arizona, for the record291    An article entitled, ``Justice Dept. to Interrogate Tim Walz,292        Four Other Top Minnesota Democrats,'' Jan. 21, 2026,293        Breitbart294    An article entitled, ``Biden clemency list includes295        individuals who defrauded taxpayers out of millions,''296        Dec. 17, 2024, Fox News297The Executive Order 25-10 entitled, ``Empowering State Agencies298  to Continue Combatting Fraud,'' Sept. 17, 2025, State of299  Minnesota, submitted by the Honorable Jamie Raskin, Ranking300  Member of the Committee on the Judiciary from the State of301  Maryland, for the record302303                     WHEN PUBLIC FUNDS ARE ABUSED:304           ADDRESSING FRAUD AND THE THEFT OF TAXPAYER DOLLARS305306                              ----------307308                      Wednesday, January 21, 2026309310                        House of Representatives311312       Subcommittee on Crime and Federal Government Surveillance313314                       Committee on the Judiciary315316                             Washington, DC317318    The Subcommittee met, pursuant to notice, at 10 a.m., in319Room 2141, Rayburn House Office Building, the Hon. Andy Biggs320[Chair of the Subcommittee] presiding.321    Members present: Representatives Biggs, Jordan, Tiffany,322Moore, Kiley, Lee, Knott, Cline, McBath, and Raskin.323    Mr. Biggs. Welcome, everybody, to today's hearing, and I324mean everybody who is in here, and everybody who will come in325here, is welcome to come in here and participate, and watch,326and participate orderly.327    Our hearing is on fraud and theft of taxpayer dollars. I328now recognize the gentlewoman from Florida, Ms. Lee, to lead us329in the pledge of allegiance.330    All. I pledge allegiance to the Flag of the United States331of America, and to the Republic for which it stands, one332Nation, under God, indivisible, with liberty and justice for333all.334    Mr. Biggs. Thank you. I now recognize myself for an opening335statement.336    Today's hearing will examine the widespread and outrageous337amount of fraud taking place in and around Minneapolis,338Minnesota.339    Minnesota has lost billions of dollars in State340administered and federally funded programs, due to organized341fraud. Fraud networks operating in Minnesota dating back more342than a decade, have submitted over $9 billion, that's a billion343with a ``B,'' in false claims.344    Some high-profile cases in Minnesota include organizations345and programs such as Feeding our Future, Early Intensive346Developmental and Behavioral Intervention, Housing347Stabilization Services, and Integrated Community Supports. Now,348we're going to watch a video.349    [Video shown.]350    Mr. Biggs. Fraud within these programs have involved false351claims, fictitious providers, and services not rendered,352highlighting the need for stronger verification, monitoring,353and enforcement to protect taxpayer funds.354    These fraudulent actions have robbed taxpayer funds355intended to feed children, support individuals with autism,356provide housing for low-income and disabled Americans, and357deliver healthcare to Medicaid recipients.358    Since 2021, the DOJ has charged 98 defendants in Minnesota-359based fraud cases, 85 of whom are of Somali descent. Of the 98360defendants, 64 have been convicted.361    DOJ has now undertaken extensive investigative action,362which includes over 1,750 subpoenas, executing more than 130363search warrants, and conducting more than 1,000 witness364interviews.365    Since the start of the Trump Administration, the Federal366response to fraud in Minnesota has intensified, following a367series of high-profile cases involving State administered,368federally funded programs.369    One of the initial instances of high-profile fraud in the370State involved the nonprofit Feeding our Future, which was at371the center of a $250 million COVID-19 related fraud scheme. As372part of the scheme, fraudsters exploited Department of373Agriculture USDA food programs designed to provide meals for374children. Federal prosecutors ultimately convicted 57375defendants and described the scheme as the Nation's largest376COVID era fraud.377    The issue gained renewed national attention in late378December 2025, following a widely shared YouTube video posted379by one of our witnesses, Mr. Nick Shirley. Mr. Shirley's work380highlighted suspected fraud in Minnesota childcare programs.381His reporting prompted Federal authorities to intensify382investigations, expand oversight, and coordinate multi-agency383enforcement efforts.384    A week ago today, Mr. Shirley released a second video that385documented alleged fraud in the transportation industry,386intended to provide rides for children, the disabled, and the387elderly. Mr. Shirley uncovered companies with questionable388addresses, and vehicles intended to transport children, the389disabled, and the elderly, that remained idle for extended390periods of time.391    We look forward to hearing from Mr. Shirley about what he392was able to uncover. How did we get here? Hopefully another393witness, Scott Dexter, a former fraud investigator for the394Minnesota Department of Human Services, can shed some light on395that for us.396    I'd be remiss if I didn't point out that this massive wave397of fraudulent activity didn't just have the consequence of398ripping off taxpayer. It has drastically impacted legitimate399organizations that are truly helping their neighbors. Jennifer400Larson is here today to share her story about how this massive401fraud has crippled her organization that serves autistic402children.403    We'd like to think that these fraudsters will one day face404justice, but it appears that is not always the case. For405example, Yasmin Ali, a daycare and home healthcare owner406charged with stealing millions from Minnesota taxpayers, after407being granted bail disappeared before a trial and has not been408located since.409    That was more than a decade ago. The tentacles of this410fraud ring are widespread and include crimes other than fraud.411    For example, the aforementioned Yasmin Ali. Her brother,412Adarus Abdulle Ali, pleaded guilty in 2009 to lying to a413Federal grand jury about his knowledge of a group of young414Somali men in Minnesota, who traveled to Somali to fight with415Al-Shabaab, a foreign terrorist organization against the416transitional Federal Government of Somalia.417    We can also consider the fact that at least $700 million in418U.S. cash transported via passenger luggage through419Minneapolis-St. Paul International Airport. The incidents are420all currently under Federal investigation with the majority421carried by couriers traveling to Somalia, other African422Nations, and the Middle East.423    While no definitive links to funding terrorism have been424established yet, we know that hundreds of millions of dollars425in cash are being transported to areas where foreign terrorist426organizations are active. What could possibly go wrong?427    A whistleblower has alleged that TSA personnel at MSP,428Minneapolis-St. Paul International Airport, repeatedly429identified and flagged routine encounters with Somali men430carrying large suitcases filled with bundled cash, often431exceeding $1 million.432    During an interview a former TSA agent at MSP from 2016-4332021, now a whistleblower, Liz Jacksa noted that she saw,434quote, ``suitcases packed with millions of dollars in cash435moving through MSP again and again, carried by the same type of436couriers, which raised questions that she feels law enforcement437and political leaders still haven't answered.''438    Jacksa further explained her repeated encounters with439Somali men carrying suitcases packed with cash, and in one440case, a bag filled with new passports. According to Jacksa, the441volume, consistency, and profile of the transactions she442witnessed were well beyond ordinary or everyday behavior.443    Treasury Secretary Scott Bessent has noted that the444Department is currently investigating where Minnesota's445taxpayer dollars are being placed.446    Additional reports show what Somali individuals in the447United States send roughly $215 million abroad each year. On448January 9th, Secretary Bessent indicated that the Treasury449Department's Financial Crimes Enforcement Network, FinCEN,450informed four money transfer organizations that they are under451investigation for their roles in the fraud scheme involving the452theft of funds from social services in Minnesota.453    He also indicated that some banks in Minnesota are being454investigated by the Internal Revenue Service's Civil455Enforcement Division for allegations related to money456laundering.457    As you can see, there's much to unpack surrounding these458numerous fraud schemes taking place in and around Minneapolis,459Minnesota.460    I would be remiss if I didn't suggest and urge additional461investigation throughout this entire country. I know that in my462home State of Arizona, our Democrat Attorney General came into463office and quickly said that there had been $2.5 million in464fraud just in the Medicaid program alone.465    In recent studies released over the last year in Arizona,466it has been suggested that as much as $7.2 billion in fraud467annually take place in Arizona's similar programs.468    This is not just a Minnesota issue, but it just happens to469be at the forefront of why we are here today.470    I look forward to today's hearing, and I thank the Members471and witnesses for taking part. I'll yield back and recognize472the Ranking Member, Ms. McBath, for her opening statement.473    Ms. McBath. Thank you, Mr. Chair, and thank you for474convening this hearing this morning to talk about the harm that475fraud can cause.476    Thank you for everyone that is here this morning to477testify. It is so necessary that we continue to investigate and478prosecute all forms of fraud, including government fraud, which479can turn many into victims.480    That is because a person committing fraud against a481government program, steals from all of us as taxpayers and482abuses the purpose, the initial purpose, of these programs.483    They harm the organizations that need these programs to484operate and most importantly, they harm the people that the485program is designed to help.486    Whether we're talking about a program that feeds school487children, helps seniors find housing, helps people overcome488addiction, or provides services to address disabilities, it is489critical that the dollars that we invest in these programs490actually serve the purposes that we have in mind when we, the491lawmakers, created them.492    That's why the Department of Justice has always combated493fraud, including prosecuting dozens of people for perpetrating494fraudulent schemes in Minnesota in 2021, and under the Biden495Administration.496    Prosecutions are not enough to combat or prevent fraud. The497Biden Administration also established a COVID-19 fraud498enforcement task force and increased oversight of programs that499were being targeted by fraudsters.500    The Minnesota lawmakers have also taken steps to reduce501fraud in their State, strengthening the State's ability to stop502potential fraud sooner and improving investigations to hold503those scammers accountable.504    Where President Trump has taken a very different approach505to fraud, just last week, Trump added quite a few fraudsters to506his growing list of people that he has pardoned. Not because507they are deserving of a second chance, but because they hired508his friends, back channeled a donation, or serve his political509purposes.510    He has pardoned many people charged or convicted of fraud511and other financial crimes, wiping away more than $1 billion in512money that would otherwise have gone to victims of crime.513    President Trump has also fired inspectors general,514instructed his DOJ to stop enforcing bribery statutes, and515gutted the offices that investigate white collar crime.516    That is how we know this hearing is not really about fraud.517It is about trust. The Trump Administration does not want you518to trust these programs because if you don't trust them,519they're easier to destroy them.520    They do not want you to trust entire communities because if521you don't trust them, they're easier to intimidate. We cannot522let that happen.523    We will continue to fight for robust and responsible524oversight, and for the continuation of initiatives that make525all our communities safer, healthier, and more resilient.526    Across the country, there are daycares, schools, hospitals,527treatment centers, research facilities, nursing homes, fire528departments, police departments, airports, and more, that all529depend on State or Federal funding, not just to help those in530need, but to serve every single one of us.531    If President Trump succeeds an attempt to freeze childcare532funding across five states, which is temporarily blocked by a533court order, the effects would ripple across families and534businesses throughout our economy. It would affect more than535500,000 children, and these are children that are not just536within the State of Minnesota. The 500,000 children, their537parents, the businesses, and organizations where those parents538work, and the many people who depend on those businesses to539fulfil needs in those communities.540    That's the fallout from just one program, addressing one541need across only five States. If President Trump continues this542assault on critical programs, the harms could be far greater.543    These latest attacks come on top of the cuts that President544Trump and Congressional Republicans already forced through,545which are taking healthcare from 10 million Americans and546reducing food assistance to over 40 million Americans,547including many, many children.548    We don't have to choose between programs that are549susceptible to fraud and nothing at all. With proper oversight,550we can make sure that every American is fed, that everyone can551access housing and medical treatment, and that our daycares and552our schools can keep guiding our children toward a better553future.554    I look forward to hearing more today about how we can555achieve this goal. I thank our witnesses for being here, and I556yield.557    Mr. Biggs. The gentlelady yields back, and I'll recognize558the Chair of Full Committee, Mr. Jordan. No, I don't recognize559him right now, but I will recognize the Ranking Member of the560Full Committee, Mr. Raskin, for his opening statement.561    Mr. Raskin. Thank you kindly, Mr. Chair, and thank you to562all of our witnesses for joining us.563    In a just world, the Judiciary Committee today would be564investigating why a masked ICE agent shot three times in cold565blood and killed an unarmed citizen, a 37-year-old mom, Renee566Nicole Good. We'd be investigating why Trump's DOJ is harassing567and investigating Renee's wife, instead of investigating her568killer.569    We'd be asking why ICE agents are trained in basic CPR, but570911 tapes have shown none of the agents performing CPR on Ms.571Good. They left her bleeding alone in her car for almost three572minutes, and definitively rejected the help of a man who came573forward and identified himself as a doctor.574    We'd be investigating why in another Minnesota case, ICE575agents deployed tear gas under the car of a family of eight576people, including a six-month-old, a two-year-old, and two kids577with severe asthma, who were just trying to get home from a578basketball game. The baby stopped breathing and his mom had to579administer CPR as they desperately waited for medical help to580arrive.581    Our colleagues want to talk about fraud in Minnesota. Fraud582that was already being investigated and prosecuted under the583last administration. It is true that social services fraud,584serious fraud, occurred in Minnesota. That's why, under585President Biden, the Department of Justice opened multiple586criminal investigations that, to date, have already resulted in587more than 90 people being charged and 64 people being convicted588of Federal criminal offenses.589    Indeed, Minnesota lawmakers acted to root out and prevent590fraud going forward in the public benefits program. That's why591last year, the Minnesota legislature passed legislation to592empower the Governor to cutoff payments or to claw back funds593whenever fraud is detected.594    That's why Governor Walz appointed the first ever Director595of Program Integrity, to make sure the State is effectively596investigating and preventing fraud and corruption in their597programs.598    The fraud in Minnesota was discovered not by a right-wing599social media influencer who has been harassing people in600communities all over Minnesota in recent weeks, but by the hard601work of real local-investigative journalists, brave602whistleblowers, and State and Federal auditors.603    This fraud, which we must take seriously, is not unlike the604$2.5 billion breathtaking Medicare fraud scheme uncovered last605year in the home State of the Chair of this Subcommittee, as he606himself mentioned or the massive COVID-19 unemployment607assistance fraud scheme uncovered in Chair Jordan's home State608of Ohio.609    Fraud is endemic in government all over the world. There610are fraudsters attacking our public institutions trying to611undermine them and rip them off. Even our President has been612convicted of 34 counts of criminal fraud by a jury of his peers613in New York, related to the fraudulent payments made to porn614star, Stormy Daniels, and also civilly convicted in New York615for different kinds of real estate fraud.616    Fraud is not headquartered in one State, or one617municipality, much less one ethnic, racial, or religious618community. President Trump couldn't resist the temptation to619use fraud in Minnesota as an occasion to mobilize the power of620the Federal Government to bully and intimidate first- and621second-generation Somali Americans who live in that State.622    Many of the people convicted in the fraud schemes were of623Somali ancestry. Under the pretext of cracking down on a fraud624that had already been discovered, investigated, and prosecuted,625Trump surged Federal immigration officers to Minnesota and626aimed them at the Somali-American communities, calling the627people who live there, repeatedly, garbage.628    This is despite the fact that it is a complete nonsequitur,629obviously, to send immigration agents to conduct fraud630investigations.631    The deployment of law enforcement resources against an632entire ethnic community after the criminal prosecution of a633small group of its members is to promote the sinister ideas of634collective guilt and guilt by association, two doctrines that635are emphatically rejected in Anglo-American jurisprudence and636by our courts.637    The community targeted in Minneapolis is made up,638incidentally, overwhelmingly of U.S. citizens. Ninety-five639percent of Somalis in Minnesota are U.S. citizens, including 58640percent of whom were born in the United States.641    Well, what is the Trump Administration's actual record on642fraud? Well let's see, President Trump pardoned the big-time643drug dealer and convicted fraudster, Juan Orlando Hernandez,644the former President of Honduras, sparing him a 45-year645criminal sentence after he brought in 400 tons of cocaine into646our country.647    That's 800,000 pounds of cocaine that he said, quote, ``we648are going to stuff up the nostrils of the gringos.'' Trump649pardoned him.650    If you're interested in that particular sweetheart deal,651that would be a great subject for a hearing, Mr. Chair.652    Just last week again, the President granted pardons to more653convicted fraudsters. Julio Herrera Velutini was scheduled to654be sentenced this month for participation in a political655corruption and fraud scheme alongside his codefendant, the656former Governor of Puerto Rico, Wanda Vazquez.657    In late 2024, Mr. Herrera was facing felony bribery charges658in a different case. His daughter donated $2.5 million to the659MAGA Inc., super PAC. Then, in May 2025, Mr. Herrera's lawyer,660who had served on President Trump's legal team, negotiated a661deal allowing him to plead guilty to a trivial misdemeanor662offense instead.663    Several months later, Mr. Herrera's daughter donated664another $1 million to MAGA Inc. What do you know? President665Trump generously granted Mr. Herrera a full and unconditional666pardon just last week.667    They're making fraud out of the pardon process in America668with pay-to-play rules as they pardon recidivist, hardened, and669unrepentant fraudsters.670    Well, indeed in total, President Trump has pardoned more671than 1,600 people, depriving victims, survivors, and taxpayers672of an estimated, check this out, $1.55 billion in restitution673and fines owed to us, the American people, while shockingly,674because other Presidents didn't do this but Trump did, while675shockingly allowing corporate fraudsters and tax cheats to keep676all their ill-gotten gains.677    This is a massive and unprecedented swindle from working-678class people and crime victims, as the administration gives all679these ill-gotten gains right back to the criminal fraudsters680who stole the money in the first place.681    Finally, Mr. Chair, President Trump has dismantled the682infrastructure that actually prosecutes white-collar crime and683fraud in America, actually roots out waste, fraud, and abuse.684The Trump DOJ gutted the Public Integrity Section at DOJ that685prosecutes government officials who break the law, and nearly a686year ago, his DOJ suspended enforcement of the Foreign Corrupt687Practices Act, which prohibits foreign bribery, saying all bets688are off.689    He's gutted the Consumer Financial Protection Bureau, which690is the first and the only agency devoted solely, at the Federal691level, to protect American consumers against being cheated by692big financial corporations. The CFPB delivered $21 billion back693to more than 200 million Americans, who were victims of fraud694and other predatory business practices, and the administration695has then gutted the CFPB, because they are on the side of696corporate fraud and white-collar crime.697    That's the truth of what's going on there. They fired 17698inspectors general, the independent government watchdogs whose699job it is actually to root out waste, fraud, abuse, and700corruption, and left 28 IG offices without Senate-confirmed701leadership at all, allowing the corruption and the fraud to run702rampant.703    If we're going to have a hearing about fraud in America,704Mr. Chair, let's do it. Let's take in the full scope of what's705taking place in our country.706    I yield back to you.707    Mr. Biggs. The gentleman yields back, and I recognize the708Chair of the entire Committee, Mr. Jordan.709    Chair Jordan. Thank you, Mr. Chair. I'll be brief. I want710to thank our witnesses for being here. Estimates are711potentially as high as $9 billion; we're looking here at what712appears to be a decade long scam and fraud.713    You can always look at one program I talked about a couple714weeks ago in an oversight hearing, was this Feeding Our Future715program, where taking Federal, Americans' hard earned tax716dollars, taking that money and supposedly providing meals to717children.718    The problem was, there were no meals and no kids. They were719just stuffing it in their pockets. This is a great hearing to720have. We appreciate the witnesses and the work that they have721done.722    Ms. Larson and the work she does, and actually making a723difference, doing a legitimate program. Mr. Shirley for724uncovering this, and Mr. Dexter and others who are here.725    With that, I would yield back. I look forward to hearing726from our witnesses and the hearing itself.727    Mr. Biggs. Thank you, Mr. Chair. I would recognize myself728just for UCs. The first one is ``President Joe Biden commutes729sentences for two of Chicago area's most notorious730fraudsters.''731    Second, ``North Dakota judge blasts Biden for setting732fraudsters free.''733    Third, ``Biden commutes roughly 1,500 sentences; pardons 39734in biggest single day act of clemency,'' including fraudsters.735    Fourth, ``Illinois lawmakers furious after Biden commutes736sentences of State fraudsters.''737    Without objection.738    Mr. Raskin. Mr. Chair, could I enter some, as well?739    Mr. Biggs. Yes, please.740    Mr. Raskin. Thank you much. This UC request is from ABC741News, January 20, 2026, titled, ``Trump's pardons forgive742financial crimes that came with hundreds of millions of dollars743in punishment.''744    This one is, ``Arizona has recovered just 5 percent of745taxpayer dollars lost in a $2.5 billion Medicaid fraud746scheme,'' that's from ProPublica.747    From the Columbus Dispatch. ``Columbus mother and daughter748among 15 indicted in pandemic unemployment assistance fraud749scheme.''750    Finally, a Minnesota fraud scheme timeline from NPR News,751``Fraud investigations stretched across Walz's tenure.''752    Mr. Biggs. Without objection. Now, without objection, all753the opening statements will be included in the record, and we754will introduce today's witnesses.755    Mr. Scott Dexter. Mr. Dexter is a former law enforcement756officer having served for 28 years. He also served with the757Minnesota Department of Human Services, Office of Inspector758General, where he investigated fraud in the childcare759assistance program. Thank you Mr. Dexter, for being here.760    Ms. Jennifer Larson. Ms. Larson is the Founder and Chief761Executive Officer of the Holland Center for Autism, a clinic762that provides services to children and young adults with763autism.764    She started the Holland Center to serve families like hers765that were not receiving adequate services and support766elsewhere. Thank you, Ms. Larson, for being here today.767    Mr. Nick Shirley is an independent journalist. His recent768investigations and videos have shed light on the scale of fraud769in public benefit programs in Minnesota that are currently770ongoing, and thank you Mr. Shirley, for being here.771    Mr. Dylan Hedtler-Gaudette. Mr. Hedtler-Gaudette is the772acting Vice President of Policy and Government Affairs at the773Project on Government Oversight (POGO).774    POGO is a nonprofit organization that investigates alleged775wrongdoing by the Governor. Thank you, Mr. Hedtler-Gaudette,776for being here with us today.777    We welcome all our witnesses and thank them for appearing778today. We will begin by swearing you in. Would you please rise779and raise your right hand?780    Do you swear or affirm under penalty of perjury that the781testimony you are about to give is true and correct to the best782of your knowledge, information and belief, so help you God?783    Thank you. Thank you, you may be seated.784    The record will reflect that the witnesses have all785answered in the affirmative, and with the instruction of Mr.786Hedtler-Gaudette, I wanted to let all Members of the panel know787that when you have a question for him, please say his name so788he knows that you are addressing him, please.789    I want the witnesses to know that your written testimony790will be entered into the record in its entirety. Accordingly,791we ask that you summarize your testimony in five minutes.792    We'll begin now with Mr. Dexter. You are recognized for793your five-minute statement.794795                  STATEMENT OF SCOTT F. DEXTER796797    Mr. Dexter. Thank you. Chair and the Members of the798Committee, thank you for the opportunity to speak with you799today. My name is Scott Dexter, I'm a retired law enforcement800investigator with 28 years of experience.801    Most of it was spent conducting criminal and financial802fraud investigations, with experience in surveillance in803operations.804    In 2013, after retiring from law enforcement, I joined the805Minnesota Department of Human Services as part of a newly806created investigative unit within the office of Inspector807General.808    Our mission was straightforward, identify and investigate809fraud within the childcare assistance program known as CCAP.810    I was one of the original four investigators hired, all of811us were former law enforcement professionals with backgrounds812in criminal investigations.813    Our cases were not selected based on the name of the814center, the owner, or the community it served. They were815selected based solely on tips, complaints, and the amount of816CCAP funding being paid out.817    The highest funded centers were reviewed first. Many of818those centers were referred to us through the public tip line,819or by licensing inspectors who observed activity inconsistent820with a legitimate daycare operation.821    What we found was deeply concerning. Many of these centers822operated out of commercial spaces with windows totally covered,823no visible play areas, and very few children ever present.824    Through surveillance, data collection, and review of825attendance and billing records, we repeatedly documented826patterns of over billing, nonexistent attendance, and in some827cases, children being signed in for hours they were never828actually at the center.829    Our investigative process was thorough and methodical. We830collected licensing and billing data, installed covert831surveillance cameras, reviewed hours of video, identified832parents and employees, and calculated estimated overpayments833based on actual attendance.834    Completed cases were then turned over to the Minnesota835Bureau of Criminal Apprehension for search warrants,836interviews, arrests, and potential prosecution.837    As our investigations progressed, we noticed a trend. Many838of the centers receiving the highest levels of CCAP funding839were owned and operated by Somali individuals, and the families840served were predominantly Somali.841    This was not the basis for selecting cases, but it did842become the basis for accusations against us. We were labeled as843racially biased, despite the fact that our case selection was844driven entirely by funding data.845    An outside review was launched into our investigative846practices. We were questioned about how we selected centers,847and how we conducted surveillance.848    Following that review, new restrictions were placed on our849work, including mandatory panel reviews before we could move850forward with investigations.851    Investigators were also pulled from conducting new or852current investigations to enter data from all previous853complaints received by DHS, into a newly created database, a854process that took nearly a year to complete.855    These changes significantly hindered our ability to do our856jobs effectively. Ultimately, in 2019, I chose to retire857because the investigative process had become so constrained858that meaningful work was no longer possible.859    Through collaboration with Federal agencies including the860IRS Criminal Investigation Division, Homeland Security, and the861U.S. Department of Health and Human Services, we learned that862millions of dollars in cash from the Somali community was being863flown out of the Minneapolis-St. Paul airport by Somali864couriers.865    At one point, nearly $70 million had been documented866leaving the country halfway through a single year.867    Although we could not prove that the cash was obtained868fraudulently, we strongly suspected that it was.869    We also encountered situations where Federal partners were870prevented from opening cases due to concerns about political871sensitivities surrounding the Somali community, and the refugee872resettlement program.873    These decisions had real consequences, allowing fraud to874continue unchecked.875    Throughout our work, we identified several loopholes that876made CCAP highly vulnerable to fraud. Centers were allowed to877bill for the full authorized hours, even when children were878present for only minutes.879    Billing records could be submitted up to 30 days later,880creating opportunities for manipulation. Attendance records881were handwritten, unreliable, and often incomplete.882    Despite our recommendations, no biometric attendance883systems, no electronic submission requirements, and no State884installed security cameras, were ever implemented.885    Chair and the Members, the purpose of my testimony is not886to cast blame on any community. It is to highlight systemic887weaknesses that allowed large-scale fraud to occur, and to888emphasize the need for stronger safeguards, better oversight889and investigative processes that are allowed to function890without political interference.891    Thank you for your time and your commitment to ensuring892accountability within publicly funded programs, and I am893prepared to answer any questions that you may have.894    [The prepared statement of Mr. Dexter follows:]895    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]896897    Mr. Biggs. Thank you, Mr. Dexter. Now, we're going to898recognize Mr. Hedtler-Gaudette, for your five minutes of899opening statement.900901              STATEMENT OF DYLAN HEDTLER-GAUDETTE902903    Mr. Hedtler-Gaudette. Chair Biggs, Ranking Member McBath,904and the Members of the Subcommittee, I appreciate the905opportunity to testify before you today on the important issues906of preventing fraud, and protecting taxpayer dollars.907    My name is Dylan Hedtler-Gaudette, and I am the Acting Vice908President of Policy and Government Affairs at the Project on909Government Oversight.910    We are a nonpartisan independent watchdog that promotes a911more accountable, transparent, and effective Federal912Government.913    We view it as our mission to combat abuse of power and914corruption in the Federal Government, which includes working on915rooting out waste, fraud, and abuse.916    The unfortunate truth is that fraud in government programs917is a fact of life. Since the U.S. Government has existed, fraud918in government has also existed.919    For much longer than that, in fact. For as long as human920beings have been organizing ourselves into societies and921building institutions to govern those societies, there have922always been those who will seek to take advantage.923    This is a harsh, but real truth related to the human924condition, related to our fundamentally fallen and flawed925natures.926    That said, it is still incumbent on every one of us to do927what we can to prevent fraud, and to hold perpetrators of fraud928accountable.929    This is especially true when fraud implicates hard earned930taxpayer dollars, and critical public programs and services.931This is true whether we're talking about fraud in the context932of the Feeding Our Future program, or any other program in933Minnesota. Whether we're talking about welfare fraud in934Mississippi, which involved the participation of a world-famous935Hall of Fame NFL quarterback.936    This is true whether we're talking about fraud in the937context of it being perpetrated by large multinational defense938companies in the context of multibillion dollar contract they939have with the Defense Department.940    The point here is that fraud and the abuse of taxpayer941dollars are not related to any particular geographic,942demographic, or other boundary or characteristic.943    Why do these things happen so much? Mostly, they are caused944by deep structural flaws, gaps, and weaknesses in our system of945government.946    They're also driven by recalcitrance and resistance to947change on the part of Federal agencies.948    To put it shortly, fraud is a systemic problem, and it949requires systemic solutions. What are these solutions? I'm950pleased to share a few of them with you today.951    We must first look at watchdogs, critical sources of952information, and practitioners of oversight from within the953Federal Government itself.954    I'm specifically talking about inspectors general, the955Government Accountability Office, and whistleblowers. Rather956than attacking, firing, undermining and intimidating these957individuals and entities as this administration and its allies958have done, we must strengthen, preserve, and protect them.959    We must enact reforms to make sure that IGs and GAO can960perform their duties effectively and independently, and we must961add additional safeguards to make sure that whistleblowers can962blow the whistle without fear of reprisal, or retaliation.963    We must also take a long, hard look at the architecture964currently in place for how we track, monitor, analyze, and965assess Federal funding.966    To put it bluntly, that architecture is broken. Key967resources like USAspending.gov are in desperate need of968overhaul and modernization.969    We need to enhance and improve the quantity, quality,970timeliness, and integrity of the data and information we971collect on Federal funding.972    We need to promote more accountability, transparency, and973compliance mechanism within the chain of spending for Federal974funding.975    If we don't do this, we will never have a good grasp on976where funding is going, where it's ending up, who is being977helped by it, who is being missed by it, and what the ultimate978impact is.979    Last, we must enact robust reforms and vigorous enforcement980to crack down on corruption, cronyism, and conflicts of981interest, which turbo charge waste, fraud, and abuse in the982Federal Government.983    The Presidential Pardon is an acute example of this, with984each of the last two administrations using the pardon power985inappropriately to pardon convicted fraudsters.986    We must also promote reforms to crack down on the revolving987door between agencies and industries, and to head off pay-to-988play politics, all which distort and corrupt decisions like the989award of Federal contracts.990    The takeaway here is simple. Focusing on individual991salacious, scandalous examples of fraud is akin to looking at992the symptoms and not looking at the disease or the root causes993of the disease.994    The Project on Government Oversight stands ready, willing995and able to work with anyone here who wants to work on root996causes and systemic solutions, so that we can actually get our997hands around waste, fraud, abuse, and corruption in the Federal998Government.999    Thank you for having me here today, and I look forward to1000answering your questions.1001    [The prepared statement of Mr. Hedtler-Gaudette follows:]1002    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]10031004    Mr. Biggs. Thank you, Mr. Hedtler-Gaudette, and I forgot to1005mention. When you have about 10 seconds left, I will just tip1006that so you will, so everybody will know that as well.1007    Mr. Shirley, you're recognized for your opening statement.10081009                   STATEMENT OF NICK SHIRLEY10101011    Mr. Shirley. Awesome. I'm here today to speak on behalf of1012all hard-working, law-abiding taxpaying citizens here inside of1013the United States.1014    I've helped bring to light widespread fraud that's1015happening inside our Nation, and we the people, have had enough1016of our hard-earned money going toward fraudsters as if it's no1017big deal.1018    As I speak here, I want to ask everyone a question. How1019much do we trust when we pay our taxes, it's going to benefit1020our Nation?1021    People erupted during the Boston Tea Party over just a few1022percentages as they believed they were being taxed without1023representation. Nowadays, we have the representation, but do we1024trust our representatives?1025    My name is Nick Shirley, and I made a 41-minute video that1026I posted on platforms like X and YouTube. My video received1027over 100 million views, and it created instance change within1028our government.1029    As the Federal Government launched investigations in1030departments such as Health and Human Services, froze over $1851031million in childcare funding, until businesses can prove they1032are legitimate businesses.1033    I actually became aware of the fraud that was happening in1034Minnesota in June 2025, as I was there for a separate video and1035Minnesotans started reaching to me asking if I was making a1036video on the fraud.1037    I said well, what fraud? This lady, she was a real estate1038agent and she says well, I'm having a hard time selling my1039properties because people are curious about these assisted1040livings that are popping up next door to some of the houses1041that we're buying, or the home healthcare clinics that are1042popping up. We don't know who is next to these houses that1043we're trying to sell.1044    I said well, I'm not going to come and make a video if I1045don't have any proof. Therefore, I left Minnesota, and I1046continued to look for fraud in the best way I could.1047    As I was getting my own information, a man by the name of1048David reached out to me and he said hey, I have been1049investigating this fraud for years now.1050    I have been driving by these childcare centers. I have1051never seen a single child, and I have received information from1052the State of Minnesota as to how much money these places are1053receiving.1054    I said great, let me come to Minnesota and we'll make this1055video about potential fraud that was taking place inside of1056Minnesota.1057    We go to a daycare and I'm instantly surprised by what we1058see. We arrived, and it was an industrialized building, and1059there was two daycares registered at that daycare--at that1060building.1061    The first thing I noticed is all the windows are blacked1062out, and there's no footprints in the snow of any children.1063There are no playgrounds, or anything that would make it look1064like it was a childcare.1065    Above me a sign read, open 7 a.m. to 10 p.m., but there is1066nobody there. The doorbell did not even work.1067    Then, we continued to go to other daycares and we noticed1068the same pattern. No children, blacked out windows, and one1069daycare, a learning center, spelled ``Quality Learing Center,''1070instead of ``Quality Learning Center.''1071    They had received $1.9 million, yet with that $1.9 million,1072they could not even spell learning right on their sign.1073    Government Walz has said he's been fighting fraud in1074Minnesota since 2019, and said the buck stops with him.1075However, how long would it take for you to notice $1 million1076being--leaving your bank account and not knowing where it's1077going? That's essentially what had been happening in Minnesota1078for years as billions of dollars have been misplaced.1079    Meanwhile, while people like Governor Tim Walz call people1080like me a White supremacist delusional conspiracy theorist, he1081actually decided to drop out of reelection because I believe,1082of how deep and extensive this fraud is.1083    Thank you very much. Since my reporting, the HHS department1084froze over $185 million and to this day, not a single business1085has been able to prove proof of legitimacy.1086    How fast would you be proving that you are a legitimate1087business if you have children to actually feed and to take care1088of? You'd be sending that paperwork instantly.1089    I made this video to document the widespread fraud that has1090been taking place as I truly believe all fraud is bad. People1091like me, my generation, we're sick of seeing tax dollars go1092toward fraud.1093    We just want to have the same opportunities that our1094fathers and our grandparents had, and when you see people1095making millions of dollars by committing fraud, it upsets1096everybody from all age demographics.1097    I hope today we can have a good conversation, and we can1098all agree that fraud is bad, and that fraud is fraud, and I1099wish the best for our country, and that's what needs to be1100happening is to crack down on all forms of fraud.1101    Thank you for having me and God bless the USA.1102    [The prepared statement of Mr. Shirley follows:]1103   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]11041105    Mr. Biggs. Thank you, Mr. Shirley. Now, I recognize Ms.1106Larson for your five minute opening statement.11071108                  STATEMENT OF JENNIFER LARSON11091110    Ms. Larson. Chair, Ranking Member, and the Members of the1111Committee, thank you for allowing me to speak today on this1112issue.1113    My name is Jennifer Larson, I am the Founder and CEO of1114Holland Center in Minnesota. I have been an autism provider for1115over 20 years and started the organization for my son.1116    I built Holland Center because families with children like1117mine, were desperate for help. Desperate for services and1118stability; desperate for somewhere they could trust their child1119would be supported and helped.1120    Not sent home on a bad day; not babysat in a classroom and1121forgotten. We serve the children that don't succeed in public1122school settings.1123    What started as a small program grew over two decades into1124four locations that families rely on not just for therapy, but1125for hope, routine, and survival.1126    This work is a labor of love for me. Just like me, there1127are providers all over the State laboring with love to help1128these children.1129    In this week, Holland and other programs all over Minnesota1130are collapsing. Not because we committed fraud, but because a1131crime ring was allowed to operate inside Minnesota's service1132system, and the government's clumsy response is now destroying1133legitimate long-standing providers, and devastating families1134that we serve.1135    Families come to Holland; they do not have a backstop.1136Their children often receive 30 or more hours of therapy a1137week. These are not an extravagance; these are medically1138necessary.1139    These children learn to communicate, regulate their1140emotions, reduce dangerous behaviors, and function in daily1141life.1142    For many parents, therapy determines if they can work.1143Consistent staff and therapy prevent severe behaviors and1144regression. Structured care keeps children and their siblings1145safe.1146    When services disappear, families do not just simply1147adjust. They face a crisis. For more than two decades, Holland1148has served hundreds of children year after year, employed1149hundreds of clinicians and staff.1150    Operated under yearly on sight audits, inspections, and1151documentation oversight. Delivered real services to real1152children every day.1153    We have always complied with everything the system1154required.1155    Yet, within the last month, the State has withheld over1156$400,000 in Medicaid funds for my own program, and that number1157grows every single day.1158    I had to infuse my personal funds to survive these weeks,1159but I can't do that any longer without payment.1160    Let me be clear. We are a fee-for-service industry. When we1161can't pay our staff, we lose our staff and children lose care.1162    Families do not lose appointments; they lose the people1163they trust. What happened in Minnesota had nothing to do with1164the ethnical, longstanding autism providers.1165    What happened was organized criminal networks that1166exploited autism services by opening fake centers, billing for1167children that did not exist, billing for services never1168delivered, and stealing millions of taxpayer dollars in the1169process.1170    These are not minor compliance issues. They are criminal1171enterprises. Families trusted that the government was1172protecting the integrity of the system. It failed.1173    Now, instead of doing the obvious thing and targeting1174criminal actors, the response has been to freeze everyone's1175payments.1176    That decision does not punish the criminals; it punishes1177innocent children and families.1178    As Medicaid payments are delayed due to prepayment review1179by an insurance company that is in the business of denying1180claims, providers are reducing hours, cutting staff, and1181starting to close.1182    Families are scrambling for alternatives that don't exist.1183Children are regressing; parents are leaving jobs to care for1184their disabled children.1185    Autism therapy cannot be paused without consequences. Loss1186of services can erase years of progress in weeks, and abrupt1187disruption of services can cause life-long consequences in1188these children.1189    This is not abstract harm. It is daily trauma for families1190already carrying an extraordinary burden.1191    The simple solution to the problem is to send the criminals1192to jail and allow trusted providers with decades of clean1193audits and verified ownership structures to continue providing1194prescribed, ethical therapy, and go back to paying them what1195we've earned, and resume paying them on time.1196    I built Holland for 20 years. Families built their lives1197around the care that we provide. All of that is risk of1198destruction today.1199    Not by fraud, but by clumsy government response that failed1200to distinguish between criminals and caregivers. It treats1201children with disabilities--1202    Mr. Biggs. The gentlelady will suspend. We've got a1203photographer there. We allow photographers in here, but not1204between the panel--the witnesses and the Members. You will1205please move. Photographer, please move.1206    Ms. Larson. OK, thank you.1207    Mr. Biggs. Like, right now.1208    Ms. Larson. OK, we are sorry.1209    Mr. Biggs. We will--1210    Ms. Larson. All of that is at the risk of destruction--1211sorry, can I continue?1212    Mr. Biggs. Yes, please continue.1213    Ms. Larson. Not by fraud, but by the clumsy government1214response that fails to distinguish between criminals and1215caregivers. It treats children with disabilities as acceptable1216collateral damage. Fraud must be stopped and criminals1217prosecuted.1218    I'm a taxpayer, and I live in Minnesota. This is1219disgusting. Families and children should never pay the price1220for government failure. Thank you.1221    [The prepared statement of Ms. Larson follows:]1222    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]12231224    Mr. Biggs. We will now proceed under the five-minute rule1225with questions. The Chair recognizes the gentleman from1226Wisconsin, Mr. Tiffany, for five minutes.1227    Mr. Tiffany. Thank you, Mr. Chair. Besides the work Mr.1228Shirley has done, I want to recognize Power Line, who has done1229yeoman's work, exposing this over the last decade as to what1230has happened.1231    I just want to say, Ms. Larson, I live in Northern1232Wisconsin. There is an autism school that was started in my1233community.1234    Where did we visit when we wanted to start that a decade1235ago? We came to Minnesota where you have been leaders in having1236good autism programs.1237    I think about the tremendous fraud that has gone on in1238nutrition programs, housing programs, but is there anything1239more heinous than abusing an autism program?1240    Ms. Larson. I can't imagine. It's so hard to believe that1241people are faking that children have autism and stealing money1242from the government.1243    When I'm sitting here with my 25-year-old nonspeaker, and1244now children like my son aren't going to have services because1245they stole money from the government and faked these things.1246    It's just, it is like I said, ``disgusting.''1247    Mr. Tiffany. With what's going on right now, what are the1248families that you're serving, what are they saying?1249    Ms. Larson. They're scared.1250    Mr. Tiffany. What are they doing?1251    Ms. Larson. Everybody's scared. There are centers or1252programs that have already shutdown. Staff are leaving. This1253week, I asked my staff who will take unpaid leave because we1254can't keep going like this.1255    Like I said, I'm $400,000 plus in debt now, and I'm not1256assured these are going to get paid back. I went to a bank, and1257they wouldn't back the receivable because they said that's not1258a receivable. If it's prepayment review, you may not get it.1259    Mr. Tiffany. Ms. Larson, none of this would have happened1260if fraud has not occurred, is that accurate?1261    Ms. Larson. Yes.1262    Mr. Tiffany. Mr. Dexter, could something been done about1263this earlier?1264    Mr. Dexter. Yes. As I stated in my opening testimony, in1265the years that I worked there, we identified how fraud was1266occurring, the loopholes that existed. We brought--1267    Mr. Tiffany. What were some of the warning signs, Mr.1268Dexter?1269    Mr. Dexter. Well, the fact that part of our job was to go1270and collect attendance records. We would find attendance1271records that were either incomplete or nonexistent.1272    Obviously, there were times we found them to be fabricated1273because they were given to us way later. The same with billing1274records.1275    They were allowed 30 days after the end of the billing1276period to submit billing records. They were not immediately1277available to us. It kind of allowed overpayments or double1278payments to be overlooked.1279    We had the attendance record issue. We had the fact that1280there was no way to verify who was signing the children in and1281out. No way to verify what times those children were signed in1282and out.1283    Mr. Tiffany. Could I do a followup here? In Wisconsin, we1284learned this month that Ibrahima Diop, a Minneapolis school1285finance boss, placed on leave for failing to submit required1286financial paperwork with the Minneapolis School District and1287for signing questionable contracts linked to the Somali fraud1288scandal, was hired by the Milwaukee Public School System as a1289deputy superintendent at a salary of $240,000 a year.1290    Do you think it wise, might that be a warning sign that1291this person was involved, may have been involved with fraud in1292Minneapolis? Shouldn't they be concerned in Wisconsin that this1293is going--that they're hiring someone like that?1294    Mr. Dexter. Well, if somebody that they hired has a past1295history and practice of doing that type of stuff, I would be1296very leery of it occurring again, or that being the basis that1297they're hired.1298    Mr. Tiffany. Governor Evers refused to open the books and1299is blocking Federal audits of our food stamp and Medicaid1300programs, and he also vetoed four auditor positions in a recent1301budget. Do you think that is also a warning sign?1302    Mr. Dexter. Yes, if it's preventing--1303    Mr. Tiffany. Or ill advised? Would that be a better way to1304pose the question?1305    Mr. Dexter. Yes, if it prevents the oversight and the1306ability to audit and look at the records to make sure it can1307have a check-and-balance system, that would be very unwise1308because again, that allows fraud to occur.1309    Mr. Tiffany. Because Mr. Shirley, what is happening in1310Minnesota, it could be happening throughout the United States,1311isn't that correct?1312    Mr. Shirley. Correct.1313    Mr. Tiffany. If there's one thing we've learned or1314``leared'' as said in Minneapolis, isn't it possible that this1315is happening everywhere?1316    Mr. Shirley. Yes, I believe it is.1317    Mr. Tiffany. Mr. Chair, I yield back.1318    Mr. Biggs. The gentleman yields. I now recognize the1319Ranking Member of the whole Committee, Mr. Raskin, for his five1320minutes of question.1321    Mr. Raskin. Thank you very much, Mr. Chair. I thank all the1322witnesses for your excellent testimony. Mr. Hedtler-Gaudette,1323administration is systematically undermined government1324oversight.1325    The President has fired more than a dozen inspectors1326general, not for any cause but seemingly just in retaliation1327for doing their jobs and to block unwanted investigations.1328    President Trump has defunded the Counsel of Inspectors1329General on Integrity and Efficiency. He's removed independent1330leadership at the Office of Special Council and the Office of1331Government Ethics. Blockading whistleblowers and numerous1332investigations.1333    What is your assessment, Mr. Hedtler-Gaudette, of the Trump1334Administration's apparent systematic opposition to internal1335oversight mechanisms in the Federal Government?1336    Mr. Hedtler-Gaudette. Thank you, Ranking Member Raskin. My1337assessment is that the last year or so has been one of the most1338antioversight and antiaccountability periods that I have1339witnessed in our Federal Government.1340    The things you laid out as well as others, are the sort of1341proof in the pudding there. Speaking of things that should be1342giving us pause and raising red flags, that should all be1343giving us serious pause and raising serious red flags about how1344seriously people who claim to take oversight and accountability1345fraud, how seriously do they actually take it?1346    Mr. Raskin. There's been a lot of attention given to Donald1347Trump's extraordinary use of pardon power, as in the pardon of1348violent insurrectionists and cop beaters.1349    There's also been a forgiveness of a billion and a half1350dollars in restitutionary fines that various people had to pay.1351    A lot of them are fraudsters. The DOJ in Trump's first1352term, brought bank fraud and tax evasion charges against1353reality TV stars Todd and Julie Chrisley.1354    They were convicted in 2022. They owed more than $221355million in restitution to taxpayers and to their victims. Then,1356Trump suddenly, inexplicably pardoned them and forgave all the1357money that they were supposed to be paying back to their1358victims.1359    Todd Chrisley bragged publicly about his get out of jail1360free card, jubilantly exclaiming the Feds got F'd.1361    Let me give you one other example. Trump on April 23rd,1362issued a pardon for Paul Walczak, a former nursing home1363executive who pleaded guilty to multiple tax crimes.1364    What he was doing was taking millions of dollars from the1365nurses, orderlies, and doctors who worked for him at his1366facilities, took more than $10 million that way.1367    Instead of giving it to the IRS for their taxes, he used1368the money to buy a $2 million yacht, and to pay for high-end1369jet travel, and to go shopping at Bergdorf-Goodman and Cartier.1370    Well, he was sentenced to 18 months in prison for stealing1371his tax, his employees' tax withholdings, and he was ordered to1372pay his employees back $4.4 million for the money he looted1373from their accounts.1374    He was going to have to pay that back, but then he got his1375mom to go do a glitzy fund-raising dinner for Donald Trump at1376Mar-a-Lago.1377    She paid $1 million for her ticket. Then, right after Trump1378was inaugurated in his second term, Walczak petitioned for a1379Presidential Pardon arguing that he was the victim of political1380retaliation because they were Trump supporters.1381    What do you know, President Trump issued a complete pardon1382with forgiveness of all the financial fines and restitution,1383that Mr. Walczak was going to have to pay back to his workers,1384the nurses, doctors, and orderlies.1385    That was forgiven. That was $4 million taken away from the1386victims of a fraud and given back to the perpetrator of the1387fraud.1388    OK, now if we had all day, we could go on all day with this1389because that's how their pay-to-play pardon system works.1390    What does this do to our efforts to root out fraud and1391corruption systematically in the government, in crimes, and in1392different industries?1393    Mr. Hedtler-Gaudette. I think it provides a perverse1394incentive structure. I opened my statement by saying that we1395all have an obligation and a responsibility to do what we can1396to prevent fraud and to hold perpetrators of fraud accountable.1397    That last bit, holding a perpetrator of fraud accountable1398perhaps via conviction, doesn't mean much if all one needs to1399do is contribute to the right super PAC, or attend the right1400fund raiser and suddenly that accountability and that1401conviction is wiped away, including the financial restitution1402you mentioned.1403    Those kinds of actions are at direct cross purposes with1404any effort to promote a broader, more systemic approach to1405rooting out waste, fraud, and abuse.1406    Mr. Biggs. The gentleman's time is expired.1407    Mr. Raskin. Thank you very much, and I yield back.1408    Mr. Biggs. The Chair recognizes the Chair of the Full1409Committee, Mr. Jordan.1410    Chair Jordan. Thank you, Mr. Chair. Mr. Dexter, let me make1411sure we get this right. You get tips and complaints.1412Whistleblowers or others come to you and tell you something is1413not right at these childcare centers in your State that are1414getting all kinds of taxpayer money. Is that right? That's how1415it started?1416    Mr. Dexter. That is correct.1417    Chair Jordan. Then, you go and do your work? You have got141828 years' experience investigating things and specifically in1419the crime and financial fraud area, is that right?1420    Mr. Dexter. That is correct.1421    Chair Jordan. You go out and find these childcare centers,1422there aren't any kids. No kids are there. There are some, but1423it is like you don't see the playground. You don't see any kids1424at a place where they are supposed to be helping children.1425Then, you also find out most of them are run by Somali1426individuals. Is that accurate?1427    Mr. Dexter. That is correct.1428    Chair Jordan. Then you make some recommendations. You said1429here is what we should do. I think you put this on page 2 of1430your testimony. You said there are some basic things you should1431do. You said they didn't have a biometric attendance system.1432They should do that. They should have electronic submission1433requirements. They need security cameras. You made some1434recommendations.1435    Mr. Dexter. Yes.1436    Chair Jordan. Then what happened?1437    Mr. Dexter. Nothing.1438    Chair Jordan. They ignored your recommendations. It didn't1439stop there, did it? They ignored your recommendations. They1440called you a racist, right?1441    Mr. Dexter. Correct.1442    Chair Jordan. Typical Left. I always say the Left. Well,1443the Left will tell a lie. Big media will report it. You tell1444the truth. They call you a racist. Exactly what happened here.1445    They ignore your recommendations. They call you a racist,1446but it even got worse than that if you can imagine. They1447started investigating you, is that right?1448    Mr. Dexter. Yes, we were interviewed by an outside firm for1449a report given to the Office of Legislative Auditor.1450    Chair Jordan. What did that report look like? What did they1451say? Did they call you a--what did the report say?1452    Mr. Dexter. The report basically questioned our1453investigative tactics, looked at how our unit was managed.1454    Chair Jordan. Even though you had 28 years' experience in1455this particular area, tips and whistleblowers came to you, even1456though that was a whole catalyst for doing it?1457    Mr. Dexter. Correct.1458    Chair Jordan. Yes. OK. The end result is what? The end1459result is Ms. Larson, who is actually helping people, she1460suffers and the people she helps suffer. Isn't that right, Ms.1461Larson? Not to mention the fact that taxpayers are getting1462ripped off, but the people who do good work, who actually help1463people, you suffer.1464    Ms. Larson. The disabled are paying for the money stolen.1465    Chair Jordan. Yes. Why do you think all this is the case?1466All of this brings to me that this seems to be a typical1467pattern.1468    In the end, you have got to ask why. When you point out1469what is going on, you have good people doing good work who1470suffer. The taxpayers are getting ripped off. Someone has got1471to ask, well, why did they take the--not follow your1472recommendations, call you a racist? Investigate you instead of1473just fixing the problem. Why did they do that? What could be1474the answer? Does anyone want to hazard a--Mr. Shirley, do you1475want to hazard a guess why that is the case?1476    Mr. Shirley. Well, they simply use that as a deflection1477technique to make you not want to speak out against the fraud.1478    Chair Jordan. Yes, it seems to me it is politics. Do you1479think it is politics, Mr. Dexter?1480    Mr. Dexter. Yes, I do.1481    Chair Jordan. Yes, the people at the top, well, don't want1482to do this. We don't want to be called racist. In fact, we1483found that out a week ago in a hearing where we were looking at1484this Feeding Our Future Program.1485    We found out they actually shut that program off for a1486while. They said time out. Something is not right here. They1487found the same kind of things you found, Mr. Dexter. They said1488we are going to stop payment and then it was restarted. The1489reason it restarted is because they threatened a racial1490discrimination lawsuit against the authorities there in1491Minnesota.1492    OK. Forget about the fact that if we do this, we restart1493the money, we are going to hurt good people like Ms. Larson and1494the people she helps and rip off the taxpayers. We are going to1495do it all for politics.1496    We also found, interestingly enough, the Attorney General1497of Minnesota was at a meeting with the key folks in this1498particular program and then they found out a couple weeks later1499they start sending him campaign contributions. It is politics.1500It is politics driving it all.1501    That is why it is appropriate we are investigating here at1502the Congressional level. That is why it is appropriate that the1503Department of Justice has put in place a specific individual to1504focus on this not only in Minnesota but around the country.1505    I talk too much. Anyone else wants to--I will give Mr.1506Shirley and Ms. Larson a chance to say anything you want. If1507not, I will yield 28 seconds to our Chair. I will 20 seconds,1508the remaining of my time to the Chair.1509    Mr. Biggs. Mr. Hedtler-Gaudette, would it surprise you that1510Joe Biden issued pardons to someone named Crundwell, who had1511the largest municipal fraud in the country's history and had a1512restitution amount of $53.7 million that was never paid on the1513commutation. Would that surprise you, sir?1514    Mr. Hedtler-Gaudette. That would not surprise me. Actually,1515in my written statement, I outlined how pardons under the last1516administration, the Biden Administration, they also fall under1517the same pattern of pardoning convicted fraudsters. I am in1518agreement with you there.1519    Mr. Biggs. Thank you. Without objection--that time has1520expired. Without objection, Mr. Cline will be permitted to1521participate in today's hearing for the purpose of questioning1522the witness if a Member yields in time for that purpose.1523    Now, we are going to go to Mr. Moore from Alabama.1524    Mr. Moore. Thank you, Mr. Chair. All this talk about1525pardons and the ultimate shyster, one of them was Hunter Biden.1526He got pardoned after Joe promised he wasn't going to do that1527on the way out. Anyway, that is another pardon for another day.1528    Ms. Larson, I am impressed with your son. I honestly1529thought he was your attorney when you guys were sitting there.1530Were there early warning signs that could have been acted on1531that could have prevented the fraud schemes from growing to the1532scale that we see now?1533    Ms. Larson. I would say yes. Looking back, the Somali1534community in Minnesota has a high prevalence of autism. I know1535that because I serve a lot of minorities in my centers. When1536these centers started popping up, I thought good for them. I1537took care of my son. We have had a waiting list for five years.1538I thought it was a positive.1539    Then, it just started to go and go to where now it is 4001540plus of these. I had started--and I didn't Nick Shirley it--1541that is a verb now, and go out and see because obviously, I am1542busy and that is not what I have time for.1543    There were a lot of early warning signs. If anyone was1544actually paying attention--1545    Mr. Moore. They would have caught it.1546    Ms. Larson. Oh, 100 percent.1547    Mr. Moore. How long have you been in business, 20 years, is1548that--1549    Ms. Larson. Over 20 years.1550    Mr. Moore. You went through a number of audits every year,1551right?1552    Ms. Larson. Every year, onsite.1553    Mr. Moore. How is it that these groups are getting away1554with it and you are under the thumb of the government auditing1555you every year. Why do you think that is?1556    Ms. Larson. Either there is a double standard, and they1557don't, for whatever reason, have the same expectations that we1558do or they are just--1559    Mr. Moore. Chair was on to something, maybe it is politics.1560    Ms. Larson. Yes.1561    Mr. Moore. Mr. Shirley, now I guess investigative1562journalist now known as Right-wing social media influencer, so1563can you confirm how many daycare centers you personally visited1564in Minnesota during your investigation?1565    Mr. Shirley. During that first video, we went to around1566seven.1567    Mr. Moore. How did you select those facilities? I know you1568said earlier, ``footprints in the snow.'' How is it that you1569identified those facilities to go to initially?1570    Mr. Shirley. The man, David, in the video, he had the1571daycares with the CCAP funding. We just simply drove around1572Minnesota and around the Minneapolis area.1573    Mr. Moore. It took a lot of courage to do that I would1574imagine, probably more so now than what it was when you1575initially did it. A hundred million views you said?1576    Mr. Shirley. Yes, over 140 million views on that.1577    Mr. Moore. What was Mr. David's background? How did you1578contact him? How did he call you or did you reach out?1579    Mr. Shirley. He is simply--he is just a man in Minnesota1580who has a passion for his city. He had been seeing fraud taking1581place for years. Out of the all the thousands of messages I get1582on Instagram and other platforms, I just happened to read his.1583He provided me the information. I gave him a phone call.1584    Mr. Moore. Then from there, just went to those different1585facilities. What was probably the most interesting thing as you1586were doing this. I saw the video. We watched it. I believe1587there were a number of facilities like in the same building.1588    Mr. Shirley. Yes. In one building there was, I believe,1589three daycares, and there were no children. They were all1590receiving CCAP funding for separate daycares.1591    There was one daycare we went to that one day it was closed1592by the government, and then that same day it was reopened1593underneath another name. They both received CCAP funding.1594    Mr. Moore. I bet, Ms. Larson, they weren't getting audited1595yearly like you were.1596    Ms. Larson. I would guess not.1597    Mr. Moore. How many daycares are there in Minneapolis that1598we think are fraudulent right now, Mr. Shirley? Any idea? Are1599there an amount of money, total? Do you got any idea on that?1600    Mr. Shirley. Well, they froze over $185 million and not a1601single business has been able to prove that they are a1602legitimate business yet.1603    Mr. Moore. The $185 million for sure that we know.1604    Mr. Dexter, I have got a question for you. What common1605patterns or warning signs usually indicate that the provider of1606the program may be committing fraud?1607    As you were doing your investigations in 28 years of1608experience, what are some of the indicators that you see that1609should be a telltale sign or a red flag that there is fraud1610there?1611    Mr. Dexter. Well, one of the immediate signs that we saw1612that when we went out to look first at the location where that1613was located. A lot of times they were located in commercial1614areas. I am not talking like strip malls or anything like that.1615I am talking about industrial areas where you wouldn't1616typically find a childcare center.1617    We would notice that there was no play area. If there was1618any play equipment, it was bare minimum. Now, there was an1619exception that if there was a playground area within a very1620short walking distance, that would count. A lot of times we1621didn't see that.1622    The most glaring thing was that when we watched the1623centers, we would sit and watch it for a couple of days before1624we even put up surveillance cameras, we would watch. We would1625see little to no children present. If anything, there would be1626a few kids.1627    Mr. Moore. As you began to blow the whistle, the1628investigator became--1629    Mr. Biggs. The gentleman's time has expired.1630    Mr. Moore. I yield back, Mr. Chair.1631    Mr. Biggs. Thank you. The Chair recognizes the Ranking1632Member, Ms. McBath.1633    Ms. McBath. Thank you, Mr. Chair. When he began his second1634term, President Trump broke from historic norms and fired 171635inspectors general, people who serve as critical watch dogs and1636prevent waste, fraud, and abuse.1637    A Federal judge held that these firing were illegal, but1638also held that she could not reinstate these people due to1639their important roles. As a result, the President has been able1640to appoint acting inspectors general who have themselves been1641removed after information to Congress that Trump officials are1642not cooperating with investigations.1643    Mr. Hedtler-Gaudette, how do these frequent firings affect1644the ability of the inspector general offices to prevent and1645investigate fraud?1646    Mr. Hedtler-Gaudette. They fundamentally undermine it, and1647they also create a real chilling effect for the inspector1648generals who are left. The incentive to do something that could1649upset the powers that be, suddenly becomes a bit of a risky1650proposition. Between completely undermining them and the1651chilling effect, you are really dampening and damaging the1652ability to do real oversight.1653    Ms. McBath. Thank you. How does the politicization of1654inspector general appointments affect the morale and1655effectiveness of career investigative staff that are within1656these offices?1657    Mr. Hedtler-Gaudette. It also has a severely negative1658effect on morale and efficacy within the offices.1659    Ms. McBath. I believe we can and should do more to prevent1660fraud and improve oversight so that all our government efforts1661are doing the most that they can to help the American people.1662    When the Judiciary Committee marked up the Republican's1663partisan big ugly spending bill, I offered an amendment that1664would dedicate half of one percent of funding to be used for1665oversight, fraud improvement, and prevention. My Republican1666colleagues, they opposed the amendment.1667    Mr. Hedtler-Gaudette, in your opening statement, you spoke1668on steps that Congress could take to ensure robust, nonpartisan1669oversight. The Project on Government Oversight recently1670published an article, ``7 Ways Congress Should Sharpen Its1671Oversight in 2026.'' Can you pass him this?1672    Mr. Biggs. Without objection.1673    Ms. McBath. Thank you. Thank you. Is there anything else1674that you want to highlight from those recommendations?1675    Mr. Hedtler-Gaudette. Sure, yes. I just want to pause to1676note that Congress really is the indispensable actor when it1677comes to doing oversight. They are supposed to be a somewhat1678adversarial relationship between the branches, and Congress is1679supposed to be the primary adversary when it comes to--there1680are two branches in conducting oversight. That is predicated at1681Congress taking that oversight duty seriously irrespective of1682who is in charge of the other two branches.1683    There is a political will issue there with oversight but1684also there are some mechanical issues. Congress could do a1685better job of holding hearings that are a bit more bipartisan,1686a bit more focused on the facts as opposed to the sizzle of a1687given anecdote or scandal. Really trying to get at root causes1688and really trying to take hard, deep looks at the underlying1689structural reasons why things like fraud happen.1690    It is not as sexy. It is not going to get you as many views1691on social media. It is going to actually ideally lead to long-1692term, sustainable, durable reforms that can really crack down1693on the problem.1694    Ms. McBath. Thank you. The short-lived DOGE office was1695supposed to cut fraud. Mr. Hedtler-Gaudette, what did it1696actually do, and how did its actions actually affect everyday1697Americans?1698    Mr. Hedtler-Gaudette. DOGE was a complete failure. Even on1699its own terms, the primary progenitor of DOGE claimed that he1700was going to find $2 trillion. Then, he moved that down to $11701trillion in waste, fraud, and abuse cutting spending. In 2025,1702we actually spent more money than we spent in 2024.1703    At the opening of this Fiscal Year in October, we ran the1704largest opening month budget deficit ever run before at $2851705billion. We have hollowed out the key functions of a bunch of1706agencies. Any claim that DOGE was effective either on cutting1707spending, promoting effectiveness, or efficiency are just flat1708out undermined and undercut by the facts.1709    Ms. McBath. Mr. Hedtler-Gaudette, because you have done1710investigations yourself, did you do any followup on Mr.1711Shirley's video?1712    Mr. Hedtler-Gaudette. Personally, I took a look at what had1713been done to try and backstop what Mr. Shirley indicated in his1714video by a professional journalist at CBS and by professional1715oversight practitioners like the inspector general in1716Minnesota. As it turns out, they had a difficult time1717substantiating what Mr. Shirley was claiming to be true in his1718video. In fact, they found countervailing evidence, including1719having been provided security footage by one of those daycares1720of children being dropped off the very day that Mr. Shirley was1721supposedly there.1722    In my view, I would have to err on side of believing the1723professional journalist at CBS and the professional oversight1724practitioners at the inspector general's office.1725    Ms. McBath. Thank you. I am out of time. I yield.1726    Mr. Biggs. The Chair recognizes the gentlelady from1727Florida, Ms. Lee.1728    Ms. Lee. Thank you, Mr. Chair. On that note, it is1729important that we return to a discussion of how these1730investigations were conducted and the type of evidence that led1731to the discovery of this massive fraud.1732    One thing that is clear based on the testimony today is1733that this is not just a Minnesota problem. This is a warning1734sign for every State that is administering large scale programs1735using taxpayer dollars. We need to get to the bottom of how to1736identify this type of fraud and prevent it from continuing to1737occur.1738    Mr. Dexter, I would like to go back to your testimony, both1739of which you have shared with us already about your extensive1740background investigating and analyzing program fraud, and the1741methods that you used to identify the theft of taxpayer dollars1742in this particular type of case.1743    In your written testimony, you mentioned that case1744selection and investigations were begun in part by looking at1745funding data. I am interested in how your office would use1746things like funding data, use statistics, and other information1747and evidence to begin to develop these cases.1748    Mr. Dexter. Well, it wasn't hard to find the funding1749amounts. We looked at the centers that received CCAP funds and1750then we listed them out. We had what was originally referred to1751as the top 100 list. It was based off of the centers receiving1752the most CCAP funding. That was generated through the billing1753process and the people that administer the funds.1754    Ms. Lee. When you looked at that list, did it turn out that1755there were certain facilities that were outliers in some way,1756either because they were receiving a larger amounts of funding1757based on student population that appeared typical or because of1758where they were located. Tell us how you identified which1759facilities warranted further review?1760    Mr. Dexter. Well, when we started looking at the centers1761that were receiving the most funds, the investigators were each1762assigned cases, were assigned centers, and when we first1763started looking into what the billing pattern was or what the1764billing amount was, how many children were being billed at1765these centers. We would have centers that were billing for 1201766plus children and looking at the different days and times,1767establishing a pattern that just was outside the realm of a1768typical daycare center.1769    Ms. Lee. In other words, you used objective data and1770evidence as the foundation to proceed further with your1771investigations?1772    Mr. Dexter. Yes, to start the investigation, that's what we1773would begin with.1774    Ms. Lee. In your experience, wouldn't you also say that1775this is the typical method, or a typical method, for beginning1776and analyzing a potential fraud case of any nature in any1777community?1778    Mr. Dexter. Yes, because to do the investigation, you first1779have to find out if it warrants an investigation and to what1780extent that investigation would be.1781    Ms. Lee. Now, isn't it also correct--you mentioned in your1782testimony systemic weaknesses that allowed the large scale1783fraud even after you had developed substantial evidence that1784there was, in fact, fraud occurring. There were institutional1785and systemic barriers that prevented you from successfully1786moving these cases through prosecution and indeed in your1787testimony you note that in 2019, you chose to retire because1788the process had become so constrained that meaningful work was1789no longer possible.1790    Tell us about the barriers and ultimately that profound1791frustration that led you to retire.1792    Mr. Dexter. When we were originally hired--when this unit1793was originally created and we were hired, the understanding was1794that our job was going to be to investigate fraud and stop it.1795As we proceeded through with that, it wasn't by our doing that1796it turned out that the centers we investigated were1797predominantly Somali.1798    Once that was kind of brought out to light, the roadblocks1799that were put in front of us, being called racist, being called1800before these boards to be investigated, and basically it wound1801up turning us into auditors. We wound up just simply reviewing1802attendance records and matching them up with billing. There1803really wasn't a lot of substantial investigation anymore, and1804most of our cases wound up going before administrative hearings1805rather than criminal.1806    Ms. Lee. Which in the end, allowed this pattern of conduct1807to continue to occur, did it not?1808    Mr. Dexter. Yes.1809    Ms. Lee. Thank you, Mr. Chair. I yield back.1810    Mr. Biggs. The gentlelady yields. The Chair recognizes now1811the gentleman from North Carolina, Mr. Knott.1812    Mr. Knott. Thank you, Mr. Chair. To my colleague from1813Florida, thank you for that line of questioning. I am going to1814pick up where she left off.1815    In regard to the testimony that we have heard today, the1816other side of the aisle makes us believe or wants us to believe1817that the fraud has been effectively stopped. That they1818aggressively pursued it, they prosecuted it, and it is under1819control. Is that your interpretation of where we are, Mr.1820Dexter?1821    Mr. Dexter. I believe fraud is still going on. I don't1822think anything has changed from what I have seen with Mr.1823Shirley's videos. I am seeing in his videos the exact same1824things that we were seeing back from 2014-2019 when I worked1825there.1826    Mr. Knott. It is astounding to me when I was looking at1827some of the footage, the evidence, there was almost a sense of1828we are owed this money that we are stealing. How dare you1829investigate us? Did you ever encounter that type of attitude1830when you were performing these investigations?1831    Mr. Dexter. There was an underlying attitude like that,1832that we were taking away their money and that it wasn't fair to1833them.1834    Mr. Knott. Your investigations, sir, was the fraud as1835obvious as it seems to me that it appeared in the videos and1836the other evidence that I reviewed?1837    Mr. Dexter. Yes, as a matter of fact when we would go out1838to do our investigations, one of the things that we would have1839to do, or I would have to do, is we would scout out a location1840for our surveillance cameras that allowed us a direct line of1841sight to the centers, all their accesses.1842    A lot of that, because of the location where we were in1843these industrial commercial areas, it meant we had to go to the1844businesses and ask them permission. The No. 1 comment they1845made, was ``oh, you mean that daycare center over there where1846there are no children?'' Everyone else saw it.1847    Mr. Knott. In regard to your investigation, sir, I am1848assuming that you did not just investigate daycare fraud. What1849other types of fraud did you investigate?1850    Mr. Dexter. No, our function was strictly childcare fraud.1851    Mr. Knott. OK.1852    Mr. Dexter. Some of that overlapped into--even though we1853didn't investigate it, a lot of it was also tied into the1854medical transportation.1855    Mr. Knott. Did you ever investigate single entities that1856were appearing as though they were committing fraud in multiple1857avenues?1858    Mr. Dexter. I'm sorry. Can you say that--1859    Mr. Knott. Was there one facility that was a daycare. It1860was also associated with medical transport. Were there people1861who were double-dipping in the fraud in your investigations?1862    Mr. Dexter. Not that we saw as far as different1863organizations, but there was where one daycare center owner1864owned multiple daycare centers. What we saw was more within the1865daycare center.1866    Mr. Knott. Yes. Ms. Larson, thank you for being here. I1867echo my colleague's sentiment from Alabama. Your son is very1868impressive. What is his name?1869    Ms. Larson. His name is Caden.1870    Mr. Knott. Caden, thank you for being here today. You look1871sharp. You are doing great. Let me just talk to you about these1872various audits that you were subjected to. How rigorous were1873they?1874    Ms. Larson. Very. They would be there for hours. They would1875come in and say I want to see these files for these kids on1876this date at this time.1877    Mr. Knott. Was there anyway that you could have tricked1878them, concealed it? If you had not had any children there,1879would it have been possible?1880    Ms. Larson. Absolutely not.1881    Mr. Knott. In regard to the services that you have rendered1882first, thank you.1883    Ms. Larson. Thank you.1884    Mr. Knott. Then, in terms of the budgets that you require,1885how does it make you feel when you hear firsthand accounts that1886hundreds of millions of dollars had been taken out of the1887country in suitcases to hostile nations?1888    Ms. Larson. I can't even respond the way I feel about that.1889I will say it is still happening. To the question you--there1890are only two autism centers that have actually been shut down1891of all these that are going on.1892    Mr. Knott. Yes.1893    Ms. Larson. What they are doing is this prepayment review1894and putting us through this AI system at Optum to look for1895suspicious claims, which is why we are being--our funds are1896being held. It is not going to work.1897    Mr. Knott. Yes.1898    Ms. Larson. I am going to tell you it is not going to work.1899They just need to do what Nick did. Go and see that there are1900no kids there. Go and check it out.1901    Mr. Knott. What Mr. Dexter did. Data driven review without1902any preconceptions, without any prejudices and then holding the1903fraudsters to account. When he did that, he was called a1904racist.1905    Ms. Larson. Yes.1906    Mr. Knott. It is astounding. It is astounding. You said1907that you helped many patients, diverse patients.1908    Ms. Larson. Yes.1909    Mr. Knott. How have those patients been harmed by this1910administration in Minnesota, the Walz Administration?1911    Ms. Larson. They are all being harmed if I shut down next1912week.1913    Mr. Knott. Is that what you are up against?1914    Ms. Larson. Well, I haven't gotten paid now. The last date1915of service was December 5th. I am over $400,000 in debt. My1916payroll is $250,000 every two weeks. We get paid every two1917weeks. On Sunday night I will know if I get any money. I1918haven't been paid a dime. All my claims had been held.1919    I am preparing to--apparently, Minnesota, too, I can't just1920pause services. If I pause my services, then DHS can say, I am1921sorry you have lost your license to serve the kids through this1922program. I don't know what they think we are supposed to do.1923    Mr. Knott. Unbelievable.1924    Ms. Larson. Yes.1925    Mr. Knott. Well, again, thank you for being here. I1926appreciate all the testimony. Sorry I didn't get to everybody1927else. There are a lot of questions. Chair, I yield back.1928    Ms. Larson. Thank you.1929    Mr. Biggs. The gentleman yields. I recognize the gentleman1930from California, Mr. Kiley.1931    Mr. Kiley. Thank you, Mr. Chair. Mr. Shirley, thank you for1932your testimony today and the work that you have done.1933    Americans hear these numbers of the fraud that we have,1934whether it is $10,000, $10 million, or $10 billion, sometimes1935the numbers, you almost become desensitized to it. The way that1936your video was able to show people the fraud in real life1937actually happening opened a lot of eyes, and this helped to1938catalyze a level of scrutiny that we really should have had1939before.1940    You mentioned in your testimony that you think what you1941discovered in Minnesota that this is not isolated to that State1942but likely exists in other parts of the country as well,1943correct?1944    Mr. Shirley. Correct.1945    Mr. Kiley. What makes you think that?1946    Mr. Shirley. Well, now you are seeing, since I posted that1947video, lots of other people have started to go to other1948locations, for instance in Ohio, in Maine, or in California. We1949are also seeing similar fraud taking place in other daycares,1950for instance, in a lot of other locations.1951    Mr. Kiley. I have a particular interest in California,1952being from that State. We know there has been a lot of fraud.1953There was $32.6 billion that has been confirmed in unemployment1954insurance fraud. There are $1.2 million fraudulent community1955college applications.1956    Have you gotten any sense or have you seen any signs there1957that is similar to what aroused your suspicions in Minnesota?1958    Mr. Shirley. Yes, the fraud in California might even be1959worse than the fraud in Minnesota.1960    Mr. Kiley. What makes you say that?1961    Mr. Shirley. Well, $24 billion is missing for homelessness.1962They have been trying to build this train for years, yet there1963is hardly anything to prove for that, buyers.1964    Mr. Kiley. Yes, those are good points. You looked at--let's1965run through a couple of those. Because I mentioned the areas1966where we have confirmed fraud, but then you also have these1967areas where you have so much spending and then we look at the1968result from that spending and there is nothing.1969    The $24 billion in homelessness, and yet the homeless1970population went up, and a State audit found that they couldn't1971even figure out where the money went or what the outcomes1972linked about spending were. Is that something that is kind of a1973red flag for you?1974    Mr. Shirley. Yes, it is a major red flag, and you don't1975even have to be smart to know that it's a red flag.1976    Mr. Kiley. Well, unfortunately, our State legislators1977haven't managed to figure that out or at least the Governor1978hasn't. What are you saying about him?1979    Mr. Shirley. They are not smart. It is so obvious. That is1980what we saw in Minnesota is how complicit the government has1981been in enabling this fraud to happen.1982    Quality Learning Center had over 90 violations and yet they1983continued to give that daycare $1.9 million.1984    Mr. Kiley. Yes, that is a great point, that the political1985accountability just hasn't been there and that is what enables1986it to continue.1987    Then, you mentioned the high-speed rail as well. There has1988been about $18 billion spent so far. No track has been laid and1989not a single passenger has ridden the train. When you spend $181990billion on a train and there is no train, does that raise1991suspicions for you?1992    Mr. Shirley. Yes.1993    Mr. Kiley. You think that might be something worth looking1994at?1995    Mr. Shirley. For sure.1996    Mr. Kiley. We also had a $650 million 911 service that they1997scrapped after six years so absolutely no value from it. Maybe1998that is another example where there might at least be1999questions.2000    Mr. Shirley. I think you have got a lot in California.2001    Mr. Kiley. All right. Well, we will look forward to seeing2002what you find. We are certainly trying to use whatever tools we2003have here to bring more accountability to California as well.2004    Mr. Dexter, I wanted to also ask you a couple of questions2005about your work. Because you have extensive experience on the2006law enforcement side trying to detect fraud. That is actually2007how in California we discovered the EDD fraud and the2008unemployment fraud, it wasn't the State suddenly figuring it2009out. It was district attorneys who came together and2010investigated and, in fact, pointed to the fact that the State2011had let this happen and failed to heed their warnings and2012hadn't taken basic fraud detection steps.2013    Is this something that you encounter? What kind of internal2014controls make it so fraud is more difficult and what type of2015lack of internal controls makes it so that fraud is easier?2016    Mr. Kiley. I would say the biggest thing was the fact that2017when we tried to investigate this, once we started bringing2018cases forward and it showed that the number of centers that we2019investigated were Somali, the biggest roadblock was the fact2020that they didn't want to follow through on these cases. They2021shut down investigations. They made us, in light of the report2022from this outside management firm, we spent nearly a year2023pulled away from our investigations because one of the things2024they determined was that when our unit started, we didn't have2025a proper case management system for recording and keeping track2026of the tips.2027    As investigators, we instead had to spend nearly a year2028entering past complaints made to DHS into a newly created2029database. We couldn't do our investigations because of that.2030They kept us from doing our work basically.2031    Mr. Dexter. Yes, the States that make fraud detection a2032priority have less fraud than those that actively contravene2033efforts like yours.2034    Thank you, Mr. Chair. I yield back.2035    Mr. Biggs. Thank you. The gentleman's time has expired. I2036recognize the Ranking Member Ms. McBath for some UCs.2037    Ms. McBath. Thank you, Mr. Chair. I would like to ask2038unanimous consent to enter into the record an article,2039``Republicans Claims of Fraud Are a Pretext for Unpopular and2040Drastic Medicaid Cuts.''2041    Mr. Biggs. Without objection.2042    Ms. McBath. Thank you.2043    Mr. Raskin. Mr. Chair. Oh, I am going to have some UC.2044    Mr. Biggs. Yup, please go ahead.2045    Mr. Raskin. Actually, forgive me. I have a handful of them2046here, Mr. Chair.2047    First, a letter dated October 21, 2025, from Representative2048Bennie Thompson to Robert F. Kennedy, Jr., regarding the2049decision to rescind the $101 million penalty imposed on2050Mississippi.2051    A press release dated September 17, 2025, titled,2052``Governor Walz Issued Executive Order Directing State Agencies2053to Take Additional Steps to Combat Fraud.''2054    An Executive Order 2501 titled, ``Preventing Fraud and2055Establishing the Financial Crimes and Fraud Section of the2056Department of Public Safety,'' signed by Governor Tim Walz on2057January 3, 2025.2058    An article dated December 2, 2025, titled, ``Trump Calls2059Somali Immigrants Garbage as U.S. Reportedly Targets Minnesota2060Community.''2061    An article dated January 9, 2026, titled, ``Five States Sue2062Administration for Withholding Billions in Social Safety Net2063Funds.''2064    An article dated January 10, 2026, titled, ``Behind the2065Somali Daycare Panic is a Mother-and-Son Duo Angling to Become2066Top MAGA Influencers.''2067    An article dated December 31, 2025, titled, ``Right-Wing2068YouTuber behind Viral Minnesota Fraud Video has Long Anti-2069Immigrant History.''2070    An article dated January 11, 2026, titled, ``Fact Check,2071What is Really Happening with Child Care Fraud in Minnesota.''2072    Finally, an article dated January 13, 2026, titled, ``The2073Trump Administration Says It's Cracking Down OnFraud. It Gave A2074Red State A Pass.''2075    Thank you, Mr. Chair.2076    Mr. Biggs. Without objection. The Chair recognizes Ms.2077McBath again for another UC.2078    Ms. McBath. Thank you, Mr. Chair. I ask unanimous consent2079to enter into the record an article titled, ``Trump's Child2080Care Fund Freezing in Five States Could Cost Families $4002081million,'' by Julie Kashen of The Century Foundation.2082    Mr. Biggs. Without objection. I recognize myself for a2083series of UCs.2084    From Fox News, ``Biden Clemency for Convicted Fraudsters2085Met with Outrage, Slap in Face.''2086    From CNN, ``Victim Shocked After Biden Grants Clemency to2087Kids for Cash Judge and $54 Million Embezzler.''2088    From Axios, ``Biden Sets Presidential Record on Pardons and2089Clemency.''2090    Also, ``Minnesota Daycare Expose Journalist Strikes Again2091and in Part 2 Names the Hub of the Fraud Wheel.''2092    An article, ``Seventy-eighth Defendants Charged in Feeding2093our Future Fraud Scheme,'' from the U.S. Attorney's Office,2094District of Minnesota.2095    An article, ``Suitcases Filled with Millions in Cash Flew2096Out of Minnesota Airport, Ex-TSA Agent Connects Dots Years2097Later,'' from MSN.2098    From U.S. Department of Health and Human Services, ``HHS2099Freezes Childcare and Family Assistance Grants in Five States2100for Fraud Concerns.''2101    From the U.S. Attorney's Office, District of Minnesota,2102``Six Additional Defendants Charged, One Defendant Pleads2103Guilty in Ongoing Fraud Schemes.''2104    This is from the local Fox News in Minneapolis, ``Through2105the Years, a Decade of Investigating Fraud in Minnesota.''2106    From the U.S. Department of Homeland Security release,2107``ICE Continues Arresting Worst of the Worst in Sanctuary2108Minneapolis, Including Pedophiles, Gang Members and Drug2109Traffickers.''2110    From MSN, ``TSA Flags Suspicious Cash Outflow at2111Minneapolis-St. Paul Airport.''2112    From MSN, ``Foreign ATM, Somalia Cash Exodus from2113Minneapolis Exponentially Larger than Other Major U.S.2114Airports.''2115    From Breitbart, ``SBA Cutting Off Grants to Minnesota Over2116Reports of Somali Fraud.''2117    An article, ``Vance praises YouTuber Nick Shirley reporting2118on Minnesota fraud.''2119    An article, ``Walz and Omar using ICE Operations to2120Distract from Fraud Scandal.''2121    From Just the News, in ``Somali Fraud Scandal Republicans2122Probe Evidence of a Blue State Election Scheme.''2123    From the New York Post, ``Ringleader of $250 million2124Minnesota Welfare Fraud Scandal Ordered by Judge to Forfeit2125Porsche and Luxury Goods.''2126    From LifeZette.com, ``TSA Whistleblower, Somalis Regularly2127Flew Out with Suitcases Stuffed with Millions in Cash.''2128    From Fox News, ``Minnesota Welfare Fraud Targets Somali2129Hawala Money Transfers.''2130    From the Star News Network, ``Feds Probe Hundreds of2131Millions in Suspected Somali Cash and Luggage Leaving2132Minneapolis Airport.''2133    From USCIS, ``USCIS Announces Results of Operation Twin2134Shield, a Large Scale Immigration Fraud Investigation.''2135    From PBS, ``Noem Says Homeland Security is Investigating2136Fraud in Minneapolis.''2137    From Cornell Law, this is the 18 U.S.C. Section 666,2138``Theft or Bribery Concerning Programs Receiving Federal2139Funds.''2140    Also, same source, 18 U.S.C. Section 641, ``Public Money,2141Property or Records.''2142    Also from same source, 18 U.S.C. 1001, ``Statements or2143Entries Generally.''2144    Without objection. I now recognize myself for my five2145minutes of questioning.2146    I have read all your statements. I do thank you, Mr.2147Hedtler-Gaudette, for your recommendations. Mr. Dexter also had2148some recommendations. I think those are prescient. I think2149those are important.2150    I also have to bring some additional information about this2151just because it is in my nature. I got to do it.2152    Mr. Hedtler-Gaudette, you have been talking about the IGs2153because you were asked about the IGs. Do you know how many2154cases, for instance, criminal cases, are being investigated,2155say, by the Department of Homeland Security IG right now?2156    Mr. Hedtler-Gaudette. I don't know the number off the top2157of my head, no.2158    Mr. Biggs. Would it surprise you there were 650 ongoing2159cases with 200 of those being COVID related?2160    Mr. Hedtler-Gaudette. That would not surprise me, no.2161    Mr. Biggs. Do you know how many audits they have going2162right now?2163    Mr. Hedtler-Gaudette. No.2164    Mr. Biggs. They have 60 audits going on right now with2165another 20 investigations going.2166    That sounds to me like the IG there, at least, and DHS is2167not being chilled because of the appointment of temporary IGs.2168Am I wrong on that or am I misconstruing that?2169    Mr. Hedtler-Gaudette. One thing about the DHS IG, Mr.2170Joseph Cuffari, is he was actually appointed under the first2171Trump Administration. He has remained ever since. We actually2172at the Project on Government Oversight have long recommended2173that Mr. Cuffari be fired because he has had a long and2174demonstrated track record of slow walking investigations at2175DHS, particularly when it comes to abuse of force and other2176issues with DHS agents.2177    Mr. Biggs. The Oversight Committee for the IGs didn't2178adhere to that recommendation. Anyway, I felt that point needed2179to be made.2180    Additionally, Mr. Dexter, you looked at some of the same2181kind of physical evidence that Mr. Shirley looked at with2182regard to physical presence at the various daycare facilities2183that you were examining between 2014-2019, is that true?2184    Mr. Dexter. Yes.2185    Mr. Biggs. You saw basically the same kind of physical2186evidence that Mr. Shirley exposed?2187    Mr. Dexter. That is correct.2188    Mr. Biggs. You also looked at funding data, and you also2189had whistleblowers.2190    Mr. Dexter. Yes.2191    Mr. Biggs. I find it interesting that somehow local news,2192which reported the fraud, other local news reporters reported2193on the fraud, credibly agree with the findings of Mr. Shirley.2194Is that what you have seen as well, Mr. Dexter?2195    Mr. Dexter. Yes, Fox 9 News in Minneapolis, they followed a2196lot of our cases and did stories on them.2197    Mr. Biggs. The very notion of trying to discredit Mr.2198Shirley because he had a lot of views or that some CBS reporter2199disagreed with and said they couldn't find the evidence2200actually in my mind discredits the CBS reporter. Because I2201appreciate the Ranking Member cited the Arizona fraud, which I2202also constantly cite. It is a massive fraud in Arizona. Not2203just the $2.5 billion, but there is an essential--another2204additional allegation of about $7 billion per year fraud in2205Arizona.2206    There needs to be a change there. We need to get a handle2207on this not just in Minnesota, but nationwide because, as we2208have seen in Ms. Larson's case, those who are conducting2209themselves according to the law, delivering services, are the2210ones that also get punished. If you are a fraudster, somehow2211you are able to keep on going.2212    The fraud hasn't stopped. Mr. Shirley have you seen any2213evidence--you said twice today that $185 million of recipients,2214not one of them has been able to demonstrate that they are a2215legitimate business.2216    Mr. Shirley. No. In fact, they are actually actively suing2217the HHS to prevent handing over any information.2218    Mr. Biggs. They don't even want to give the information2219that would be required of an audit, that would be required from2220a separate, independent investigation. They want a court to2221intervene and enjoin and prevent them from having to respond to2222this kind of investigation. Is that correct, Mr. Shirley?2223    Mr. Shirley. That is correct.2224    Mr. Biggs. This is the thing. I listened to the panelists.2225Everybody on the panel--I think everybody up here--we all want2226to stop the fraud. The bottom line is it is so infused with2227politicization that it is preventing us from just sitting down2228there and saying, OK, we have got a symptom in Minnesota, and2229we are going to fix it. The symptom being exposed is critical2230because then it actually motivates people to try to get to the2231root cause.2232    I am out of time, and we have no other Members here. I just2233want to thank each one of you, Mr. Dexter, Mr. Hedtler-2234Gaudette, Mr. Shirley, and Ms. Larson for being here and giving2235us your testimony. I really appreciate it.2236    I would encourage my colleagues to be better stewards and2237have better oversight because otherwise Mr. Shirley's2238generation is going to be paying through the wazoo, which right2239now means $40 trillion in national debt.2240    Thank you all. I appreciate it. We are adjourned.2241    [Whereupon, at 11:56 a.m., the Subcommittee was adjourned.]22422243    All materials submitted for the record by Members of the2244Subcommittee on Crime and Federal Government Surveillance can2245be found at: https://docs.house.gov/Committee/Calendar/ByEvent2246.aspx?EventID=118871.22472248                                 [all]