In the last couple of years, Minnesota has won an unwelcome reputation as the most fraud-riddled state in America, as crooks have made off with billions of taxpayer dollars from various welfare programs.
Stopping this before it starts is better than trying to recover it after it has gone; I noted earlier this week that just 10% of the money Medicaid fraudsters have been ordered to pay back – one dollar in every ten – has actually been paid back. Part of that is deterrence. Earlier this week, I noted that 80% of convicted fraudsters may end up with no felonies on their records.
In their excellent reporting, KSTP’s Kirsten Swanson and Morgan Reddekopp highlight some of the difficulties:
It can be a challenge to collect restitution payments in part because Minnesota law doesn’t allow the state to seize assets.
That is in stark contrast to the federal government, which has taken homes, properties and luxury cars from convicted fraudsters through the process of forfeiture.
In the sprawling investigation of fraud connected to Feeding Our Future, federal prosecutors estimate they have recovered between $60 million and 70 million in cash and assets from dozens of defendants.
This offers an easy win for legislators.
State policymakers should make it legal for the state to seize assets in restitution.
Swanson and Reddekopp continue:
Another challenge is limits in the state probation system.
In 2023, the legislature changed a law that now only allows judges to extend probation up to two years. Even if the court finds that a defendant violated probation by not paying restitution, they can’t hold them indefinitely until the money is paid back.
5 INVESTIGATES’ review of state court cases found nearly a dozen defendants that didn’t pay a single cent of their ordered restitution as of May.
This is another gift left by that “historic” DFL trifecta. Sponsored by Rep. Jamie Long (DFL), the bill “cap[ped] probation terms at five years for most felony offenses, except for cases of homicide and criminal sexual conduct.”
State policymakers should make fraud exempt from the five-year probation cap.
Minnesota has a fraud problem, and it needs a legal environment which is less permissive of fraud. That means expanding the state’s power to seize assets and rolling back the DFL trifecta’s cap on probation sentences in fraud cases.