House members aim to reverse fraud investigators’ move to BCA

Legislators continue to have concerns about the future of the Commerce Fraud Bureau’s work on white-collar crime and insurance fraud with its move to the Bureau of Criminal Apprehension.

The BCA handles violent crime cases well, but the Commerce Fraud Bureau is a different set of skills, said Rep. Tim O'Driscoll (R-Sartell). He believes keeping the bureau within the Department of Commerce would allow for flexibility to both regulate and investigate the insurance industry.

Gov. Tim Walz moved the bureau to the BCA in a January executive order. O’Driscoll sponsors HF2522 to reverse the move.

House members have previously expressed concern the change will result in investigators being diverted from white-collar crime to violent crime cases. The Commerce Fraud Bureau is statutorily required to spend 70% of its time on insurance fraud and is partially funded by assessments on insurance companies.

The House Commerce Finance and Policy Committee laid the bill over Tuesday for possible omnibus bill inclusion.

Rep. John Huot (DFL-Rosemount) supports the BCA housing the agents. The change came on the heels of the Feeding Our Future case about defrauding government child nutrition programs and Walz needed to make changes, he said.

“I think this was a good move. I think it’s where it has to be,” he said.

The Commerce Fraud Bureau’s move to the BCA, where it joined with the BCA’s financial crimes unit, was completed Feb. 7. It would now take work to undo the efficiencies that have been found, according to Public Safety Commissioner Bob Jacobson.

“Having one centralized financial crime and fraud section at the BCA will help prepare us to combat frauds of all kinds and offer assistance to local law enforcement,” he said.

The change only impacts criminal fraud cases and doesn’t take away the Department of Commerce’s civil authority to regulate the insurance industry, said BCA Superintendent Drew Evans.

Agency leadership is taking legislators’ concerns seriously. A different bill, HF2603, would clarify that the BCA is required to investigate insurance fraud, define the new unit’s responsibilities and prohibit shifting funds for the new unit to other purposes, Jacobson wrote to the committee.

Rep. Zack Stephenson (DFL-Coon Rapids) remains concerned that white-collar crime isn’t a high priority for law enforcement and the unit will be diverted to investigating other crimes at the BCA.

Evans responded that the BCA isn’t a general law enforcement agency but is instead specialized in its approach.