A former Minnesota state trooper turned criminal investigator told state lawmakers this week that officials at the Department of Human Services pressured him to delete findings about child care fraud, and that when he refused, his unit was harassed, sidelined, and eventually shut down after Gov. Tim Walz took office in 2019.
Jay Swanson, who served as a criminal investigator for the DHS, delivered his testimony Tuesday before the Minnesota House Fraud Prevention and State Agency Oversight Policy Committee at the state capitol. His account describes a years-long pattern in which state bureaucrats worked to bury evidence of widespread theft from the Child Care Assistance Program, a scandal that federal prosecutors now estimate may have cost taxpayers more than $9 billion.
The testimony lands in the middle of a fast-moving federal crackdown. The FBI raided nearly two dozen day care centers and other businesses across Minnesota this week. Since 2022, the Justice Department has charged 98 people in connection with child care fraud in the state. Sixty-four have been convicted. Eighty-five of those charged are of Somali descent.
Swanson told lawmakers that his unit identified major fraud in the state's child care funding program as early as 2017. But instead of support from DHS leadership, he said, investigators faced obstruction. In August 2018, as the Legislature directed the Office of the Legislative Auditor to conduct a "special review" of the Child Care Assistance Program, Swanson said a senior DHS official told him to submit his answers to the auditing agency's questions directly to DHS bosses, not to the auditors themselves.
He went further. Fox News reported that Swanson testified the official instructed him to delete paragraphs from a document he had prepared about fraud in the program. Swanson said he refused. His testimony was direct:
"I then advised this official that I believed what they were telling me to do was illegal."
Under Minnesota law, state employees are required to cooperate with legislative auditors. Swanson's account, if accurate, describes a deliberate effort by DHS leadership to circumvent that obligation, routing his findings through agency brass so they could be softened or stripped before reaching the people charged with oversight.
He also told the committee that DHS officials wanted him to characterize fraud allegations in his email as "unreliable or unable to be proven." And he said the agency spent $90,000 hiring a consulting firm, one with, in his words, "no experience in public benefit program integrity or financial fraud investigations."
Swanson did not describe a single incident. He described a culture. He told lawmakers that "members of our unit were harassed and bullied by DHS officials" who "sought to undermine their findings at every turn." The message was clear: stop digging.
Republican state Rep. Kristin Robbins, who is running for governor, laid out the institutional mechanics during the hearing. She said an Office of Inspector General within the DHS once had real investigative authority, the power to conduct surveillance, execute warrants, and seize electronics. That office was shut down.
Robbins told the committee what came next:
"They were told they could no longer do criminal investigations. They were told they could no longer meet with the Bureau of Criminal Apprehension agents that were assigned to them without supervisors' approval."
Then Walz arrived. Republican lawmakers said the suppression continued after he took office in 2019, and that Swanson's entire department, the unit investigating waste, fraud, and abuse, was eliminated. A committee Walz appointed, Robbins said, scuttled the oversight apparatus. The governor has faced repeated questions about his engagement with the fraud issue, and his office has not always been eager to answer them.
Robbins added that widespread welfare fraud in Minnesota dates back to at least 2009, well before Walz's tenure. But the question hanging over the hearing was not just when the fraud began. It was why the state kept looking away.
Swanson was not the only former investigator to describe that pattern. Scott Dexter, another former DHS investigator, told Just the News that his team uncovered what appeared to be large-scale, coordinated fraud schemes among certain child care centers, and that their investigations were hampered, downgraded from criminal matters to administrative cases, or shut down entirely.
Dexter's explanation was blunt. He said officials feared accusations of bias:
"Because of the pressure that they were getting from the Somali community, a lot of our investigations were shut down or they made it more difficult for us to investigate."
A 2019 report from the Minnesota legislative auditor found that DHS fraud controls in the Child Care Assistance Program were insufficient to prevent, detect, or investigate fraud, a finding that aligns squarely with what Swanson and Dexter described. The institutional failures were not invisible. They were documented. And they were allowed to continue.
Swanson offered one detail that captures the scale of the breakdown. He told lawmakers he learned that in Kenyan refugee camps, it was well known that Minnesota was the best place in the United States to run child care fraud.
"They had heard you could run the scam in a number of different states, but it was easiest and you could make the most money doing it in Minnesota."
That reputation did not develop overnight. It developed because the state's own investigators were muzzled, and the systems meant to catch fraud were deliberately weakened. Minnesota Democrats have since blocked efforts to open an impeachment investigation into Walz even as estimated fraud losses ballooned.
One case Swanson's investigation touched illustrates both the fraud and the dysfunction. Federal investigators looked into the Salama Child Care Center at 1411 Nicolett Ave. in Minneapolis and found what the record describes as "a high amount of billing fraud." The owner was indicted in 2017, pleaded guilty in federal court in 2018, and was sentenced to two years in prison and ordered to pay $1.4 million in restitution.
The day care appears to have shut down. But the FBI raided a business called the Quality Learing Center at the same address this week, raising questions about whether fraud simply migrated to a new name at the same location.
That pattern, fraud identified, a single conviction secured, and the broader network left intact, is what investigators like Swanson say they were trying to prevent before DHS leadership got in the way. The federal government is now doing the work that Minnesota's own agencies were, by multiple accounts, prevented from doing.
After the FBI raids this week, Walz posted a statement on X attempting to position himself on the side of accountability:
"If you commit fraud in Minnesota you're going to get caught, and that's exactly what we saw today. We catch criminals when state and federal agencies share information. Joint investigations work, and securing justice depends on it."
FBI Director Kash Patel was not impressed. He responded directly:
"Come again? This FBI and DOJ with our DHS partners drafted and executed every search warrant today. But go ahead and take credit for our work while we smoke out the fraud plaguing Minnesota under your governorship."
Markwayne Mullin, the newly appointed Department of Homeland Security chief, said Walz had "zero credibility" on the issue. The governor's attempt to claim credit for raids his own administration failed to initiate drew sharp criticism from federal officials who said the work was theirs.
Assistant U.S. Attorney Joe Thompson estimated the total theft from taxpayers by fraudsters could exceed $9 billion. President Trump has suggested the figure could reach $19 billion. Either number represents a staggering failure of state oversight, one that multiple whistleblowers now say was not accidental but engineered.
Walz dropped his reelection bid earlier this year. His office did not respond to a request for comment by Wednesday. Some Republican leaders have gone further than criticism, calling for criminal accountability for officials they say knew about the fraud and helped conceal it.
Swanson's testimony raises questions the hearing did not fully resolve. He did not publicly name the DHS official who told him to delete his findings. The consulting firm paid $90,000 was not identified. The owner of Salama Child Care Center was not named in the testimony covered. And the specific mechanism by which Walz's administration dissolved the investigative unit has not been detailed in public record, only described by Republican lawmakers.
Some of the officials Swanson accused of harassing investigators, Fox News reported, still work at DHS. That fact alone should concern anyone who believes the state has turned the page.
Robbins, for her part, framed the hearing as the beginning, not the end, of accountability. The fraud is measured in billions. The cover-up, if Swanson's account holds, was measured in deleted paragraphs, reassigned agents, and a dissolved department. National attention on Minnesota's welfare fraud problem has only intensified as the federal caseload grows.
When the people paid to catch fraud are told to stop catching it, the fraud doesn't stop. It just gets bigger, and the taxpayers left holding the bill get no say at all.
