SAINT PAUL, Minn. – Today, the Minnesota House Fraud Prevention and State Agency Oversight Policy Committee held an informational hearing on an anti-fraud package proposed by Governor Tim Walz and authored by Rep. Dave Pinto (DFL-St. Paul). This was the second committee hearing for the bill, which was also heard informationally in the State Government Finance and Policy Committee last week.
"Fraud against public programs harms all of us – not least the Minnesotans who rely on these services to improve their lives. That’s why DFL lawmakers and Governor Walz will continue to take aggressive action to strengthen oversight, improve enforcement, and increase penalties for those who steal from the public good,” said Rep. Pinto, DFL-lead on the House Fraud Prevention and State Agency Oversight Committee and a Ramsey County prosecutor. “In past years, we’ve implemented stronger grant monitoring, new fraud detection tools, additional oversight and enforcement mechanisms, and more. This proposal, which I’m proud to author, builds on this past work to prevent fraud and ensure accountability for those who engage in it.”
The legislative package includes multiple individual proposals grouped around three main themes: stronger investigative and enforcement authority; better detection and oversight; and increased criminal penalties.
In the area of investigation and enforcement, the package establishes a centralized Financial Crimes & Fraud Section at the Bureau of Criminal Apprehension by integrating agents currently at the Commerce Fraud Bureau; expands the Attorney General’s Medicaid Fraud Unit; and strengthens fraud reporting requirements. It also gives agencies clearer authority to withhold payments, block fraudulent state contracts, and debar bad actors from receiving state funds.
In the area of detection and oversight, the package leverages AI to identify Medicaid payment discrepancies, enhances licensing requirements for Early Intensive Developmental and Behavioral Intervention (EIDBI) providers, expands oversight capacity at Minnesota Management and Budget, and increases accountability for charter school funding and procurement compliance.
Finally, the proposal increases criminal accountability in several ways. It creates a new Theft of Public Funds statute, aligns state law with federal anti-kickback protections, criminalizes financial incentives for client referrals, and grants the Attorney General authority to prosecute offenders. It also increases criminal penalties by 20% compared to the current theft statute.
In advancing the proposal, Rep. Pinto also emphasized the need to recognize fraud in all of its forms.
“Fraud against government programs doesn’t just come from those who misuse public dollars—it also happens when employees are misclassified as independent contractors or denied wages and benefits to which they are entitled,” he added. “Those who exploit workers and consumers for gain deserve accountability too. Addressing fraud in all forms is a critical step to ensure we build a future where everyone can get ahead, not just the wealthy and powerful.”
Documents from today’s hearing are available on the committee webpage. Video of the hearing will be available on House Public Information Services’ YouTube page.
The legislative package is scheduled for another hearing and vote in the House State Government Committee on Thursday at 8:15 a.m.; details are available on the webpage for that committee.