Governor Tim Walz has signed an executive order to establish a centralized state fraud investigations unit within the Bureau of Criminal Apprehension in Minnesota. This move is part of a legislative package aimed at preventing, detecting, investigating, and penalizing fraudulent activities in state programs. The order includes transferring fraud investigators to the BCA and creating a Fraud and Financial Crimes Unit. State agencies will have expanded powers to stop payments to individuals involved in financial crimes, and AI systems will be used to identify anomalies in Medicaid provider payments. The proposal also includes new licensing protocols and penalties for public fund theft. The estimated cost for these measures is $39 million in FY 2026-27 and $15 million in FY 2028-29. Governor Walz is addressing a wave of fraud cases in Minnesota, totaling nearly $1 billion, including the largest pandemic-era fraud case of $250 million. House Speaker-Designate Lisa Demuth has criticized the plan, calling for more independent processes to crack down on fraud. The Minnesota Legislature session begins on January 14th. This initiative aims to protect taxpayer dollars and hold fraudsters accountable while addressing ongoing fraud issues in the state.
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