    [House Hearing, 119 Congress]
    [From the U.S. Government Publishing Office]

                    WHEN PUBLIC FUNDS ARE ABUSED: ADDRESSING
                    FRAUD AND THE THEFT OF TAXPAYER DOLLARS
    =======================================================================

                                    HEARING

                                   BEFORE THE

                        SUBCOMMITTEE ON CRIME AND FEDERAL
                             GOVERNMENT SURVEILLANCE

                                     OF THE

                           COMMITTEE ON THE JUDICIARY

                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED NINETEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                          WEDNESDAY, JANUARY 21, 2026

                                   __________

                               Serial No. 119-51

                                   __________

             Printed for the use of the Committee on the Judiciary

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                   Available via: http://judiciary.house.gov
                                    __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    62-657                  WASHINGTON : 2026
    -----------------------------------------------------------------------------------

                           COMMITTEE ON THE JUDICIARY

                            JIM JORDAN, Ohio, Chair

    DARRELL ISSA, California             JAMIE RASKIN, Maryland, Ranking
    ANDY BIGGS, Arizona                      Member
    TOM McCLINTOCK, California           JERROLD NADLER, New York
    THOMAS P. TIFFANY, Wisconsin         ZOE LOFGREN, California
    THOMAS MASSIE, Kentucky              STEVE COHEN, Tennessee
    CHIP ROY, Texas                      HENRY C. ``HANK'' JOHNSON, Jr.,
    SCOTT FITZGERALD, Wisconsin              Georgia
    BEN CLINE, Virginia                  ERIC SWALWELL, California
    LANCE GOODEN, Texas                  TED LIEU, California
    JEFFERSON VAN DREW, New Jersey       PRAMILA JAYAPAL, Washington
    TROY E. NEHLS, Texas                 J. LUIS CORREA, California
    BARRY MOORE, Alabama                 MARY GAY SCANLON, Pennsylvania
    KEVIN KILEY, California              JOE NEGUSE, Colorado
    HARRIET M. HAGEMAN, Wyoming          LUCY McBATH, Georgia
    LAUREL M. LEE, Florida               DEBORAH K. ROSS, North Carolina
    WESLEY HUNT, Texas                   BECCA BALINT, Vermont
    RUSSELL FRY, South Carolina          JESUS G. ``CHUY'' GARCIA, Illinois
    GLENN GROTHMAN, Wisconsin            SYDNEY KAMLAGER-DOVE, California
    BRAD KNOTT, North Carolina           JARED MOSKOWITZ, Florida
    MARK HARRIS, North Carolina          DANIEL S. GOLDMAN, New York
    ROBERT F. ONDER, Jr., Missouri       JASMINE CROCKETT, Texas
    DEREK SCHMIDT, Kansas
    BRANDON GILL, Texas
    MICHAEL BAUMGARTNER, Washington

                                     ------

                       SUBCOMMITTEE ON CRIME AND FEDERAL
                            GOVERNMENT SURVEILLANCE

                           ANDY BIGGS, Arizona, Chair

    TOM TIFFANY, Wisconsin               LUCY McBATH, Georgia, Ranking
    TROY NEHLS, Texas                        Member
    BARRY MOORE, Alabama                 JARED MOSKOWITZ, Florida
    KEVIN KILEY, California              DAN GOLDMAN, New York
    LAUREL LEE, Florida                  STEVE COHEN, Tennessee
    BRAD KNOTT, North Carolina           ERIC SWALWELL, California

                   CHRISTOPHER HIXON, Majority Staff Director
                    ARTHUR EWENCZYK, Minority Staff Director

                               C O N T E N T S

                                  ----------

                          Wednesday, January 21, 2026

                               OPENING STATEMENTS

                                                                       Page
    The Honorable Andy Biggs, Chair of the Subcommittee on Crime and
      Federal Government Surveillance from the State of Arizona......     1
    The Honorable Lucy McBath, Ranking Memer of the Subcommittee on
      Crime and Federal Government Surveillance from the State of
      Georgia........................................................     4
    The Honorable Jamie Raskin, Ranking Member of the Committee on
      the Judiciary from the State of Maryland.......................     5
    The Honorable Jim Jordan, Chair of the Committee on the Judiciary
      from the State of Ohio.........................................     8

                                   WITNESSES

    Scott F. Dexter, Independent Journalist
      Oral Testimony.................................................     9
      Prepared Testimony.............................................    12
    Dylan Hedtler-Gaudette, Acting Vice President, Policy and
      Governemnt Affairs, Project On Government Oversight
      Oral Testimony.................................................    17
      Prepared Testimony.............................................    19
    Nick Shirley, Independent Journalist
      Oral Testimony.................................................    29
      Prepared Testimony.............................................    31
    Jennifer Larson, Chief Executive Officer and Founder, Holland
      Autism Center and Clinic
      Oral Testimony.................................................    33
      Prepared Testimony.............................................    35

              LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING

    All materials submitted by the Subcommittee on Crime and Federal
      Government Surveillance, for the record........................    57

    Materials submitted by the Honorable Andy Biggs, Chair of the
      Subcommittee on Crime and Federal Government Surveillance from
      the State of Arizona, for the record
        An article entitled, ``Biden commutes sentences of 2 Illinois
            megafraudsters,'' Dec. 13, 2024, Chicago Sun Times
        An article entitled, ``North Dakota judge blasts Biden for
            setting fraudsters free,'' Dec. 18, 2024, North Dakota
            Monitor
        An article entitled, ``Biden commutes roughly 1,500
            sentences, pardons 39 in biggest single-day act of
            clemency,'' Dec. 12, 2024, Detroit News
        An article entitled, ``The Illinois lawmakers furious after
            Biden commutes sentences of State fraudsters,'' Dec. 13,
            2024, The National News Desk
          Not provide at the time of publication
        An article entitled, ``Biden clemency for convicted
            fraudsters met with outrage: `Slap in the face,' '' Dec.
            17, 2024, Fox News
          Not provide at the time of publication
        An article entitled, ``Victims `shocked' after Biden grants
            clemency to `kids-for-cash' judge and $54 million
            embezzler,'' Dec. 13, 2024, CNN
        An article entitled, ``Biden sets presidential record on
            pardons and clemency,'' Jan 20, 2025, Axios
          Not provide at the time of publication
        An article entitled, ``Minnesota day-care expose journalist
            strikes again--and part 2 names the `hub' of the fraud
            wheel,'' Jan. 21, 2026, The Blaze
        A press release entitled, ``78th Defendant Charged in Feeding
            Our Future Fraud Scheme,'' Nov. 24, 2025, U.S. Dept. of
            Justice
        An article entitled, ``Suitcases filled with millions in cash
            flew out of MSP airport; ex-TSA agent connects dots years
            later,'' Jan. 21, 2026, MSN
        A press released entitled, ``HHS Freezes Child Care and
            Family Assistance Grants in Five States for Fraud
            Concerns,'' Jan. 6, 2026, U.S. Dept. of Health and Human
            Services
        A press release entitled, ``Six Additional Defendants
            Charged, One Defendant Pleads Guilty in Ongoing Fraud
            Schemes,'' Dec. 18, 2025, U.S. Dept. of Justice
        An article entitled, ``Through the years: A decade of
            investigating fraud Minnesota,'' Dec. 29, 2025, Fox 9
        A press release entitled, ``ICE Continues Arresting Worst of
            the Worst in Sanctuary Minneapolis Including Pedophiles,
            Gang Members, and Drug Traffickers,'' Dec. 5, 2025, U.S.
            Department of Homeland Security
          Not provide at the time of publication
        An article entitled, ``TSA flags suspicious cash outflow at
            Minneapolis-St. Paul Airport,'' Jan. 21, 2026, MSN
        An article entitled, ``Foreign ATM? Somali cash exodus from
            Minneapolis exponentially larger than other major US
            airports,'' Jan. 21, 2026, MSN
        A report entitled, ``Report: SBA Cutting Off Grants to
            Minnesota After Nick Shirley's Reporting on Somali
            Fraud,'' Dec. 28 2025, Breitbart
          Not provide at the time of publication
        An article entitled, ``Vance Praises YouTuber Nick Shirley
            Reporting on Minnesota Fraud,'' Jan. 21, 2026, Breitbart
        An article entitled, ``Walz, Omar Using ICE Operations to
            Distract from Fraud Scandal,'' Jan. 20, 2026, Breitbart
        An article entitled, ``In Somali fraud scandal, Republicans
            probe evidence of a blue state election scheme,'' Jan.
            18, 2026, Just the News
        An article entitled, ``Ringleader of $250M Minnesota welfare
            fraud scandal ordered by judge to forfeit Porsche, luxury
            goods,'' Jan. 6, 2026, New York Post
          Not provide at the time of publication
        An article entitled, ``TSA Whistleblower: Somalis Regularly
            Flew Out with Suitcases Stuffed with Millions in Cash,''
            Dec. 11, 2025, LifeZette.com
          Not provide at the time of publication
        An article entitled, ``Minnesota Welfare Fraud Targets Somali
            Hawala Money Transfers,'' Dec. 11, 2025, Fox News
          Not provide at the time of publication
        An article entitled, ``Feds Probe Hundreds of Millions in
            Suspected Somali Cash in Luggage Leaving Minneapolis
            Airport,'' Jan. 7, 2026, Star News Network
          Not provide at the time of publication
        An article entitled, ``USCIS Announces Results of Operation
            Twin Shield, a Large Scale Immigration Fraud
            Investigation,'' Sept. 30, 2025, U.S. Citizenship and
            Immigration Services (USCIS)
          Not provide at the time of publication
        An article entitled, ``Noem Says Homeland Security is
            Investigating Fraud in Minneapolis,'' Dec. 29, 2025, PBS
          Not provide at the time of publication
        The document 18 U.S.C. 666, entitled, ``Theft or Bribery
            Concerning Programs Receiving Federal Funds,'' Cornell
            Law
          Not provide at the time of publication
        The document 18 U.S.C. 641, ``Public Money, Property or
            Records,'' Cornell Law
          Not provide at the time of publication
        The document 18 U.S. Code 1001, Statements or Entries
            Generally,'' Cornell Law
          Not provide at the time of publication
    Materials submitted by the Honorable Lucy McBath, Ranking Memer
      of the Subcommittee on Crime and Federal Government
      Surveillance from the State of Georgia, for the record
        An article entitled, ``Republicans' Claims of `Fraud' Are a
            Pretext for Unpopular and Drastic Medicaid Cuts,'' Apr.
            16, 2025, Center on Budget and Policy Priorities
        An article entitled, ``Trump's Child Care Funding Freeze in
            Five States Could Cost Families $400 Million,'' Jan. 8,
            2026, The Century Foundation
        An article entitled, ``7 Ways Congress Should Sharpen Its
            Oversight in 2026,'' Jan. 13, 2026, Project on Government
            Oversight
    Materials submitted by the Honorable Jamie Raskin, Ranking Member
      of the Committee on the Judiciary from the State of Maryland,
      for the record
        An article entitled, ``Trump's pardons forgive financial
            crimes that came with hundreds of millions in
            punishments,'' Jan. 20, 2026, NBC News
        An article entitled, ``Arizona Has Recovered Just 5% of
            Taxpayer Dollars Lost in a $2.5 Billion Medicaid Fraud
            Scheme,'' May 6, 2025, ProPublica
        An article entitled, ``Columbus mother and daughter among 15
            indicted in pandemic unemployment assistant scheme,''
            Aug. 22, 2025, The Columbus Dispatch
        A letter to the Honorable Robert F. Kennedy, Jr., Secretary,
            U.S. Department of Health and Human Services, from
            Representative Bennie Thompson, Oct. 21, 2025
        A press release entitled, ``Governor Walz Issues Executive
            Order Directing State Agencies to Take Additional Steps
            to Continue combating Fraud,'' Sept. 17, 2025, Governor
            of Minnesota Office
        An Executive Order 25-01 entitled, ``Preventing Fraud and
            Establishing the Financial Crimes and Fraud Section of
            the Department of Public Safety,'' Jan. 3, 2025, Tim
            Walts, Governer, State of Minnesota
        An article entitled, ``Trump calls Somali immigrants
            `garbage' as US reportedly targets Minnesota community,''
            Dec. 2, 2025, The Guardian
        An article entitled, ``5 states sue Trump administration for
            withholding billions in social safety net funds,'' Jan.
            9, 2026, PBS
        An article entitled, ``Behind the Somali daycare panic is a
            mother-and-son duo angling to be top Maga influencers,''
            Jan. 10, 2026, The Guardian
        An article entitled, ``Right-Wing Youtuber Behind Viral
            Minnesota Fraud Video Has Long Anti-Immigrant History,''
            Dec. 31, 2025, The Intercept
        A fact check article entitled, ``Here's what's happening with
            childcare fraud in Minnesota,'' Jan. 9, 2026, The 19th
            News
        An article enitled, ``The Trump Administration Says It's
            Cracking Down On Fraud. It Gave A Red State A Pass,''
            Jan. 13, 2026, Huffington Post
        An article entitled, ``Timeline: Fraud investigations stretch
            across Walz's tenure,'' Jan. 6, 2026, NPR News

                                    APPENDIX

    Materials submitted by the Honorable Andy Biggs, Chair of the
      Subcommittee on Crime and Federal Government Surveillance from
      the State of Arizona, for the record
        An article entitled, ``Justice Dept. to Interrogate Tim Walz,
            Four Other Top Minnesota Democrats,'' Jan. 21, 2026,
            Breitbart
        An article entitled, ``Biden clemency list includes
            individuals who defrauded taxpayers out of millions,''
            Dec. 17, 2024, Fox News
    The Executive Order 25-10 entitled, ``Empowering State Agencies
      to Continue Combatting Fraud,'' Sept. 17, 2025, State of
      Minnesota, submitted by the Honorable Jamie Raskin, Ranking
      Member of the Committee on the Judiciary from the State of
      Maryland, for the record

                         WHEN PUBLIC FUNDS ARE ABUSED:
               ADDRESSING FRAUD AND THE THEFT OF TAXPAYER DOLLARS

                                  ----------

                          Wednesday, January 21, 2026

                            House of Representatives

           Subcommittee on Crime and Federal Government Surveillance

                           Committee on the Judiciary

                                 Washington, DC

        The Subcommittee met, pursuant to notice, at 10 a.m., in
    Room 2141, Rayburn House Office Building, the Hon. Andy Biggs
    [Chair of the Subcommittee] presiding.
        Members present: Representatives Biggs, Jordan, Tiffany,
    Moore, Kiley, Lee, Knott, Cline, McBath, and Raskin.
        Mr. Biggs. Welcome, everybody, to today's hearing, and I
    mean everybody who is in here, and everybody who will come in
    here, is welcome to come in here and participate, and watch,
    and participate orderly.
        Our hearing is on fraud and theft of taxpayer dollars. I
    now recognize the gentlewoman from Florida, Ms. Lee, to lead us
    in the pledge of allegiance.
        All. I pledge allegiance to the Flag of the United States
    of America, and to the Republic for which it stands, one
    Nation, under God, indivisible, with liberty and justice for
    all.
        Mr. Biggs. Thank you. I now recognize myself for an opening
    statement.
        Today's hearing will examine the widespread and outrageous
    amount of fraud taking place in and around Minneapolis,
    Minnesota.
        Minnesota has lost billions of dollars in State
    administered and federally funded programs, due to organized
    fraud. Fraud networks operating in Minnesota dating back more
    than a decade, have submitted over $9 billion, that's a billion
    with a ``B,'' in false claims.
        Some high-profile cases in Minnesota include organizations
    and programs such as Feeding our Future, Early Intensive
    Developmental and Behavioral Intervention, Housing
    Stabilization Services, and Integrated Community Supports. Now,
    we're going to watch a video.
        [Video shown.]
        Mr. Biggs. Fraud within these programs have involved false
    claims, fictitious providers, and services not rendered,
    highlighting the need for stronger verification, monitoring,
    and enforcement to protect taxpayer funds.
        These fraudulent actions have robbed taxpayer funds
    intended to feed children, support individuals with autism,
    provide housing for low-income and disabled Americans, and
    deliver healthcare to Medicaid recipients.
        Since 2021, the DOJ has charged 98 defendants in Minnesota-
    based fraud cases, 85 of whom are of Somali descent. Of the 98
    defendants, 64 have been convicted.
        DOJ has now undertaken extensive investigative action,
    which includes over 1,750 subpoenas, executing more than 130
    search warrants, and conducting more than 1,000 witness
    interviews.
        Since the start of the Trump Administration, the Federal
    response to fraud in Minnesota has intensified, following a
    series of high-profile cases involving State administered,
    federally funded programs.
        One of the initial instances of high-profile fraud in the
    State involved the nonprofit Feeding our Future, which was at
    the center of a $250 million COVID-19 related fraud scheme. As
    part of the scheme, fraudsters exploited Department of
    Agriculture USDA food programs designed to provide meals for
    children. Federal prosecutors ultimately convicted 57
    defendants and described the scheme as the Nation's largest
    COVID era fraud.
        The issue gained renewed national attention in late
    December 2025, following a widely shared YouTube video posted
    by one of our witnesses, Mr. Nick Shirley. Mr. Shirley's work
    highlighted suspected fraud in Minnesota childcare programs.
    His reporting prompted Federal authorities to intensify
    investigations, expand oversight, and coordinate multi-agency
    enforcement efforts.
        A week ago today, Mr. Shirley released a second video that
    documented alleged fraud in the transportation industry,
    intended to provide rides for children, the disabled, and the
    elderly. Mr. Shirley uncovered companies with questionable
    addresses, and vehicles intended to transport children, the
    disabled, and the elderly, that remained idle for extended
    periods of time.
        We look forward to hearing from Mr. Shirley about what he
    was able to uncover. How did we get here? Hopefully another
    witness, Scott Dexter, a former fraud investigator for the
    Minnesota Department of Human Services, can shed some light on
    that for us.
        I'd be remiss if I didn't point out that this massive wave
    of fraudulent activity didn't just have the consequence of
    ripping off taxpayer. It has drastically impacted legitimate
    organizations that are truly helping their neighbors. Jennifer
    Larson is here today to share her story about how this massive
    fraud has crippled her organization that serves autistic
    children.
        We'd like to think that these fraudsters will one day face
    justice, but it appears that is not always the case. For
    example, Yasmin Ali, a daycare and home healthcare owner
    charged with stealing millions from Minnesota taxpayers, after
    being granted bail disappeared before a trial and has not been
    located since.
        That was more than a decade ago. The tentacles of this
    fraud ring are widespread and include crimes other than fraud.
        For example, the aforementioned Yasmin Ali. Her brother,
    Adarus Abdulle Ali, pleaded guilty in 2009 to lying to a
    Federal grand jury about his knowledge of a group of young
    Somali men in Minnesota, who traveled to Somali to fight with
    Al-Shabaab, a foreign terrorist organization against the
    transitional Federal Government of Somalia.
        We can also consider the fact that at least $700 million in
    U.S. cash transported via passenger luggage through
    Minneapolis-St. Paul International Airport. The incidents are
    all currently under Federal investigation with the majority
    carried by couriers traveling to Somalia, other African
    Nations, and the Middle East.
        While no definitive links to funding terrorism have been
    established yet, we know that hundreds of millions of dollars
    in cash are being transported to areas where foreign terrorist
    organizations are active. What could possibly go wrong?
        A whistleblower has alleged that TSA personnel at MSP,
    Minneapolis-St. Paul International Airport, repeatedly
    identified and flagged routine encounters with Somali men
    carrying large suitcases filled with bundled cash, often
    exceeding $1 million.
        During an interview a former TSA agent at MSP from 2016-
    2021, now a whistleblower, Liz Jacksa noted that she saw,
    quote, ``suitcases packed with millions of dollars in cash
    moving through MSP again and again, carried by the same type of
    couriers, which raised questions that she feels law enforcement
    and political leaders still haven't answered.''
        Jacksa further explained her repeated encounters with
    Somali men carrying suitcases packed with cash, and in one
    case, a bag filled with new passports. According to Jacksa, the
    volume, consistency, and profile of the transactions she
    witnessed were well beyond ordinary or everyday behavior.
        Treasury Secretary Scott Bessent has noted that the
    Department is currently investigating where Minnesota's
    taxpayer dollars are being placed.
        Additional reports show what Somali individuals in the
    United States send roughly $215 million abroad each year. On
    January 9th, Secretary Bessent indicated that the Treasury
    Department's Financial Crimes Enforcement Network, FinCEN,
    informed four money transfer organizations that they are under
    investigation for their roles in the fraud scheme involving the
    theft of funds from social services in Minnesota.
        He also indicated that some banks in Minnesota are being
    investigated by the Internal Revenue Service's Civil
    Enforcement Division for allegations related to money
    laundering.
        As you can see, there's much to unpack surrounding these
    numerous fraud schemes taking place in and around Minneapolis,
    Minnesota.
        I would be remiss if I didn't suggest and urge additional
    investigation throughout this entire country. I know that in my
    home State of Arizona, our Democrat Attorney General came into
    office and quickly said that there had been $2.5 million in
    fraud just in the Medicaid program alone.
        In recent studies released over the last year in Arizona,
    it has been suggested that as much as $7.2 billion in fraud
    annually take place in Arizona's similar programs.
        This is not just a Minnesota issue, but it just happens to
    be at the forefront of why we are here today.
        I look forward to today's hearing, and I thank the Members
    and witnesses for taking part. I'll yield back and recognize
    the Ranking Member, Ms. McBath, for her opening statement.
        Ms. McBath. Thank you, Mr. Chair, and thank you for
    convening this hearing this morning to talk about the harm that
    fraud can cause.
        Thank you for everyone that is here this morning to
    testify. It is so necessary that we continue to investigate and
    prosecute all forms of fraud, including government fraud, which
    can turn many into victims.
        That is because a person committing fraud against a
    government program, steals from all of us as taxpayers and
    abuses the purpose, the initial purpose, of these programs.
        They harm the organizations that need these programs to
    operate and most importantly, they harm the people that the
    program is designed to help.
        Whether we're talking about a program that feeds school
    children, helps seniors find housing, helps people overcome
    addiction, or provides services to address disabilities, it is
    critical that the dollars that we invest in these programs
    actually serve the purposes that we have in mind when we, the
    lawmakers, created them.
        That's why the Department of Justice has always combated
    fraud, including prosecuting dozens of people for perpetrating
    fraudulent schemes in Minnesota in 2021, and under the Biden
    Administration.
        Prosecutions are not enough to combat or prevent fraud. The
    Biden Administration also established a COVID-19 fraud
    enforcement task force and increased oversight of programs that
    were being targeted by fraudsters.
        The Minnesota lawmakers have also taken steps to reduce
    fraud in their State, strengthening the State's ability to stop
    potential fraud sooner and improving investigations to hold
    those scammers accountable.
        Where President Trump has taken a very different approach
    to fraud, just last week, Trump added quite a few fraudsters to
    his growing list of people that he has pardoned. Not because
    they are deserving of a second chance, but because they hired
    his friends, back channeled a donation, or serve his political
    purposes.
        He has pardoned many people charged or convicted of fraud
    and other financial crimes, wiping away more than $1 billion in
    money that would otherwise have gone to victims of crime.
        President Trump has also fired inspectors general,
    instructed his DOJ to stop enforcing bribery statutes, and
    gutted the offices that investigate white collar crime.
        That is how we know this hearing is not really about fraud.
    It is about trust. The Trump Administration does not want you
    to trust these programs because if you don't trust them,
    they're easier to destroy them.
        They do not want you to trust entire communities because if
    you don't trust them, they're easier to intimidate. We cannot
    let that happen.
        We will continue to fight for robust and responsible
    oversight, and for the continuation of initiatives that make
    all our communities safer, healthier, and more resilient.
        Across the country, there are daycares, schools, hospitals,
    treatment centers, research facilities, nursing homes, fire
    departments, police departments, airports, and more, that all
    depend on State or Federal funding, not just to help those in
    need, but to serve every single one of us.
        If President Trump succeeds an attempt to freeze childcare
    funding across five states, which is temporarily blocked by a
    court order, the effects would ripple across families and
    businesses throughout our economy. It would affect more than
    500,000 children, and these are children that are not just
    within the State of Minnesota. The 500,000 children, their
    parents, the businesses, and organizations where those parents
    work, and the many people who depend on those businesses to
    fulfil needs in those communities.
        That's the fallout from just one program, addressing one
    need across only five States. If President Trump continues this
    assault on critical programs, the harms could be far greater.
        These latest attacks come on top of the cuts that President
    Trump and Congressional Republicans already forced through,
    which are taking healthcare from 10 million Americans and
    reducing food assistance to over 40 million Americans,
    including many, many children.
        We don't have to choose between programs that are
    susceptible to fraud and nothing at all. With proper oversight,
    we can make sure that every American is fed, that everyone can
    access housing and medical treatment, and that our daycares and
    our schools can keep guiding our children toward a better
    future.
        I look forward to hearing more today about how we can
    achieve this goal. I thank our witnesses for being here, and I
    yield.
        Mr. Biggs. The gentlelady yields back, and I'll recognize
    the Chair of Full Committee, Mr. Jordan. No, I don't recognize
    him right now, but I will recognize the Ranking Member of the
    Full Committee, Mr. Raskin, for his opening statement.
        Mr. Raskin. Thank you kindly, Mr. Chair, and thank you to
    all of our witnesses for joining us.
        In a just world, the Judiciary Committee today would be
    investigating why a masked ICE agent shot three times in cold
    blood and killed an unarmed citizen, a 37-year-old mom, Renee
    Nicole Good. We'd be investigating why Trump's DOJ is harassing
    and investigating Renee's wife, instead of investigating her
    killer.
        We'd be asking why ICE agents are trained in basic CPR, but
    911 tapes have shown none of the agents performing CPR on Ms.
    Good. They left her bleeding alone in her car for almost three
    minutes, and definitively rejected the help of a man who came
    forward and identified himself as a doctor.
        We'd be investigating why in another Minnesota case, ICE
    agents deployed tear gas under the car of a family of eight
    people, including a six-month-old, a two-year-old, and two kids
    with severe asthma, who were just trying to get home from a
    basketball game. The baby stopped breathing and his mom had to
    administer CPR as they desperately waited for medical help to
    arrive.
        Our colleagues want to talk about fraud in Minnesota. Fraud
    that was already being investigated and prosecuted under the
    last administration. It is true that social services fraud,
    serious fraud, occurred in Minnesota. That's why, under
    President Biden, the Department of Justice opened multiple
    criminal investigations that, to date, have already resulted in
    more than 90 people being charged and 64 people being convicted
    of Federal criminal offenses.
        Indeed, Minnesota lawmakers acted to root out and prevent
    fraud going forward in the public benefits program. That's why
    last year, the Minnesota legislature passed legislation to
    empower the Governor to cutoff payments or to claw back funds
    whenever fraud is detected.
        That's why Governor Walz appointed the first ever Director
    of Program Integrity, to make sure the State is effectively
    investigating and preventing fraud and corruption in their
    programs.
        The fraud in Minnesota was discovered not by a right-wing
    social media influencer who has been harassing people in
    communities all over Minnesota in recent weeks, but by the hard
    work of real local-investigative journalists, brave
    whistleblowers, and State and Federal auditors.
        This fraud, which we must take seriously, is not unlike the
    $2.5 billion breathtaking Medicare fraud scheme uncovered last
    year in the home State of the Chair of this Subcommittee, as he
    himself mentioned or the massive COVID-19 unemployment
    assistance fraud scheme uncovered in Chair Jordan's home State
    of Ohio.
        Fraud is endemic in government all over the world. There
    are fraudsters attacking our public institutions trying to
    undermine them and rip them off. Even our President has been
    convicted of 34 counts of criminal fraud by a jury of his peers
    in New York, related to the fraudulent payments made to porn
    star, Stormy Daniels, and also civilly convicted in New York
    for different kinds of real estate fraud.
        Fraud is not headquartered in one State, or one
    municipality, much less one ethnic, racial, or religious
    community. President Trump couldn't resist the temptation to
    use fraud in Minnesota as an occasion to mobilize the power of
    the Federal Government to bully and intimidate first- and
    second-generation Somali Americans who live in that State.
        Many of the people convicted in the fraud schemes were of
    Somali ancestry. Under the pretext of cracking down on a fraud
    that had already been discovered, investigated, and prosecuted,
    Trump surged Federal immigration officers to Minnesota and
    aimed them at the Somali-American communities, calling the
    people who live there, repeatedly, garbage.
        This is despite the fact that it is a complete nonsequitur,
    obviously, to send immigration agents to conduct fraud
    investigations.
        The deployment of law enforcement resources against an
    entire ethnic community after the criminal prosecution of a
    small group of its members is to promote the sinister ideas of
    collective guilt and guilt by association, two doctrines that
    are emphatically rejected in Anglo-American jurisprudence and
    by our courts.
        The community targeted in Minneapolis is made up,
    incidentally, overwhelmingly of U.S. citizens. Ninety-five
    percent of Somalis in Minnesota are U.S. citizens, including 58
    percent of whom were born in the United States.
        Well, what is the Trump Administration's actual record on
    fraud? Well let's see, President Trump pardoned the big-time
    drug dealer and convicted fraudster, Juan Orlando Hernandez,
    the former President of Honduras, sparing him a 45-year
    criminal sentence after he brought in 400 tons of cocaine into
    our country.
        That's 800,000 pounds of cocaine that he said, quote, ``we
    are going to stuff up the nostrils of the gringos.'' Trump
    pardoned him.
        If you're interested in that particular sweetheart deal,
    that would be a great subject for a hearing, Mr. Chair.
        Just last week again, the President granted pardons to more
    convicted fraudsters. Julio Herrera Velutini was scheduled to
    be sentenced this month for participation in a political
    corruption and fraud scheme alongside his codefendant, the
    former Governor of Puerto Rico, Wanda Vazquez.
        In late 2024, Mr. Herrera was facing felony bribery charges
    in a different case. His daughter donated $2.5 million to the
    MAGA Inc., super PAC. Then, in May 2025, Mr. Herrera's lawyer,
    who had served on President Trump's legal team, negotiated a
    deal allowing him to plead guilty to a trivial misdemeanor
    offense instead.
        Several months later, Mr. Herrera's daughter donated
    another $1 million to MAGA Inc. What do you know? President
    Trump generously granted Mr. Herrera a full and unconditional
    pardon just last week.
        They're making fraud out of the pardon process in America
    with pay-to-play rules as they pardon recidivist, hardened, and
    unrepentant fraudsters.
        Well, indeed in total, President Trump has pardoned more
    than 1,600 people, depriving victims, survivors, and taxpayers
    of an estimated, check this out, $1.55 billion in restitution
    and fines owed to us, the American people, while shockingly,
    because other Presidents didn't do this but Trump did, while
    shockingly allowing corporate fraudsters and tax cheats to keep
    all their ill-gotten gains.
        This is a massive and unprecedented swindle from working-
    class people and crime victims, as the administration gives all
    these ill-gotten gains right back to the criminal fraudsters
    who stole the money in the first place.
        Finally, Mr. Chair, President Trump has dismantled the
    infrastructure that actually prosecutes white-collar crime and
    fraud in America, actually roots out waste, fraud, and abuse.
    The Trump DOJ gutted the Public Integrity Section at DOJ that
    prosecutes government officials who break the law, and nearly a
    year ago, his DOJ suspended enforcement of the Foreign Corrupt
    Practices Act, which prohibits foreign bribery, saying all bets
    are off.
        He's gutted the Consumer Financial Protection Bureau, which
    is the first and the only agency devoted solely, at the Federal
    level, to protect American consumers against being cheated by
    big financial corporations. The CFPB delivered $21 billion back
    to more than 200 million Americans, who were victims of fraud
    and other predatory business practices, and the administration
    has then gutted the CFPB, because they are on the side of
    corporate fraud and white-collar crime.
        That's the truth of what's going on there. They fired 17
    inspectors general, the independent government watchdogs whose
    job it is actually to root out waste, fraud, abuse, and
    corruption, and left 28 IG offices without Senate-confirmed
    leadership at all, allowing the corruption and the fraud to run
    rampant.
        If we're going to have a hearing about fraud in America,
    Mr. Chair, let's do it. Let's take in the full scope of what's
    taking place in our country.
        I yield back to you.
        Mr. Biggs. The gentleman yields back, and I recognize the
    Chair of the entire Committee, Mr. Jordan.
        Chair Jordan. Thank you, Mr. Chair. I'll be brief. I want
    to thank our witnesses for being here. Estimates are
    potentially as high as $9 billion; we're looking here at what
    appears to be a decade long scam and fraud.
        You can always look at one program I talked about a couple
    weeks ago in an oversight hearing, was this Feeding Our Future
    program, where taking Federal, Americans' hard earned tax
    dollars, taking that money and supposedly providing meals to
    children.
        The problem was, there were no meals and no kids. They were
    just stuffing it in their pockets. This is a great hearing to
    have. We appreciate the witnesses and the work that they have
    done.
        Ms. Larson and the work she does, and actually making a
    difference, doing a legitimate program. Mr. Shirley for
    uncovering this, and Mr. Dexter and others who are here.
        With that, I would yield back. I look forward to hearing
    from our witnesses and the hearing itself.
        Mr. Biggs. Thank you, Mr. Chair. I would recognize myself
    just for UCs. The first one is ``President Joe Biden commutes
    sentences for two of Chicago area's most notorious
    fraudsters.''
        Second, ``North Dakota judge blasts Biden for setting
    fraudsters free.''
        Third, ``Biden commutes roughly 1,500 sentences; pardons 39
    in biggest single day act of clemency,'' including fraudsters.
        Fourth, ``Illinois lawmakers furious after Biden commutes
    sentences of State fraudsters.''
        Without objection.
        Mr. Raskin. Mr. Chair, could I enter some, as well?
        Mr. Biggs. Yes, please.
        Mr. Raskin. Thank you much. This UC request is from ABC
    News, January 20, 2026, titled, ``Trump's pardons forgive
    financial crimes that came with hundreds of millions of dollars
    in punishment.''
        This one is, ``Arizona has recovered just 5 percent of
    taxpayer dollars lost in a $2.5 billion Medicaid fraud
    scheme,'' that's from ProPublica.
        From the Columbus Dispatch. ``Columbus mother and daughter
    among 15 indicted in pandemic unemployment assistance fraud
    scheme.''
        Finally, a Minnesota fraud scheme timeline from NPR News,
    ``Fraud investigations stretched across Walz's tenure.''
        Mr. Biggs. Without objection. Now, without objection, all
    the opening statements will be included in the record, and we
    will introduce today's witnesses.
        Mr. Scott Dexter. Mr. Dexter is a former law enforcement
    officer having served for 28 years. He also served with the
    Minnesota Department of Human Services, Office of Inspector
    General, where he investigated fraud in the childcare
    assistance program. Thank you Mr. Dexter, for being here.
        Ms. Jennifer Larson. Ms. Larson is the Founder and Chief
    Executive Officer of the Holland Center for Autism, a clinic
    that provides services to children and young adults with
    autism.
        She started the Holland Center to serve families like hers
    that were not receiving adequate services and support
    elsewhere. Thank you, Ms. Larson, for being here today.
        Mr. Nick Shirley is an independent journalist. His recent
    investigations and videos have shed light on the scale of fraud
    in public benefit programs in Minnesota that are currently
    ongoing, and thank you Mr. Shirley, for being here.
        Mr. Dylan Hedtler-Gaudette. Mr. Hedtler-Gaudette is the
    acting Vice President of Policy and Government Affairs at the
    Project on Government Oversight (POGO).
        POGO is a nonprofit organization that investigates alleged
    wrongdoing by the Governor. Thank you, Mr. Hedtler-Gaudette,
    for being here with us today.
        We welcome all our witnesses and thank them for appearing
    today. We will begin by swearing you in. Would you please rise
    and raise your right hand?
        Do you swear or affirm under penalty of perjury that the
    testimony you are about to give is true and correct to the best
    of your knowledge, information and belief, so help you God?
        Thank you. Thank you, you may be seated.
        The record will reflect that the witnesses have all
    answered in the affirmative, and with the instruction of Mr.
    Hedtler-Gaudette, I wanted to let all Members of the panel know
    that when you have a question for him, please say his name so
    he knows that you are addressing him, please.
        I want the witnesses to know that your written testimony
    will be entered into the record in its entirety. Accordingly,
    we ask that you summarize your testimony in five minutes.
        We'll begin now with Mr. Dexter. You are recognized for
    your five-minute statement.

                      STATEMENT OF SCOTT F. DEXTER

        Mr. Dexter. Thank you. Chair and the Members of the
    Committee, thank you for the opportunity to speak with you
    today. My name is Scott Dexter, I'm a retired law enforcement
    investigator with 28 years of experience.
        Most of it was spent conducting criminal and financial
    fraud investigations, with experience in surveillance in
    operations.
        In 2013, after retiring from law enforcement, I joined the
    Minnesota Department of Human Services as part of a newly
    created investigative unit within the office of Inspector
    General.
        Our mission was straightforward, identify and investigate
    fraud within the childcare assistance program known as CCAP.
        I was one of the original four investigators hired, all of
    us were former law enforcement professionals with backgrounds
    in criminal investigations.
        Our cases were not selected based on the name of the
    center, the owner, or the community it served. They were
    selected based solely on tips, complaints, and the amount of
    CCAP funding being paid out.
        The highest funded centers were reviewed first. Many of
    those centers were referred to us through the public tip line,
    or by licensing inspectors who observed activity inconsistent
    with a legitimate daycare operation.
        What we found was deeply concerning. Many of these centers
    operated out of commercial spaces with windows totally covered,
    no visible play areas, and very few children ever present.
        Through surveillance, data collection, and review of
    attendance and billing records, we repeatedly documented
    patterns of over billing, nonexistent attendance, and in some
    cases, children being signed in for hours they were never
    actually at the center.
        Our investigative process was thorough and methodical. We
    collected licensing and billing data, installed covert
    surveillance cameras, reviewed hours of video, identified
    parents and employees, and calculated estimated overpayments
    based on actual attendance.
        Completed cases were then turned over to the Minnesota
    Bureau of Criminal Apprehension for search warrants,
    interviews, arrests, and potential prosecution.
        As our investigations progressed, we noticed a trend. Many
    of the centers receiving the highest levels of CCAP funding
    were owned and operated by Somali individuals, and the families
    served were predominantly Somali.
        This was not the basis for selecting cases, but it did
    become the basis for accusations against us. We were labeled as
    racially biased, despite the fact that our case selection was
    driven entirely by funding data.
        An outside review was launched into our investigative
    practices. We were questioned about how we selected centers,
    and how we conducted surveillance.
        Following that review, new restrictions were placed on our
    work, including mandatory panel reviews before we could move
    forward with investigations.
        Investigators were also pulled from conducting new or
    current investigations to enter data from all previous
    complaints received by DHS, into a newly created database, a
    process that took nearly a year to complete.
        These changes significantly hindered our ability to do our
    jobs effectively. Ultimately, in 2019, I chose to retire
    because the investigative process had become so constrained
    that meaningful work was no longer possible.
        Through collaboration with Federal agencies including the
    IRS Criminal Investigation Division, Homeland Security, and the
    U.S. Department of Health and Human Services, we learned that
    millions of dollars in cash from the Somali community was being
    flown out of the Minneapolis-St. Paul airport by Somali
    couriers.
        At one point, nearly $70 million had been documented
    leaving the country halfway through a single year.
        Although we could not prove that the cash was obtained
    fraudulently, we strongly suspected that it was.
        We also encountered situations where Federal partners were
    prevented from opening cases due to concerns about political
    sensitivities surrounding the Somali community, and the refugee
    resettlement program.
        These decisions had real consequences, allowing fraud to
    continue unchecked.
        Throughout our work, we identified several loopholes that
    made CCAP highly vulnerable to fraud. Centers were allowed to
    bill for the full authorized hours, even when children were
    present for only minutes.
        Billing records could be submitted up to 30 days later,
    creating opportunities for manipulation. Attendance records
    were handwritten, unreliable, and often incomplete.
        Despite our recommendations, no biometric attendance
    systems, no electronic submission requirements, and no State
    installed security cameras, were ever implemented.
        Chair and the Members, the purpose of my testimony is not
    to cast blame on any community. It is to highlight systemic
    weaknesses that allowed large-scale fraud to occur, and to
    emphasize the need for stronger safeguards, better oversight
    and investigative processes that are allowed to function
    without political interference.
        Thank you for your time and your commitment to ensuring
    accountability within publicly funded programs, and I am
    prepared to answer any questions that you may have.
        [The prepared statement of Mr. Dexter follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Biggs. Thank you, Mr. Dexter. Now, we're going to
    recognize Mr. Hedtler-Gaudette, for your five minutes of
    opening statement.

                  STATEMENT OF DYLAN HEDTLER-GAUDETTE

        Mr. Hedtler-Gaudette. Chair Biggs, Ranking Member McBath,
    and the Members of the Subcommittee, I appreciate the
    opportunity to testify before you today on the important issues
    of preventing fraud, and protecting taxpayer dollars.
        My name is Dylan Hedtler-Gaudette, and I am the Acting Vice
    President of Policy and Government Affairs at the Project on
    Government Oversight.
        We are a nonpartisan independent watchdog that promotes a
    more accountable, transparent, and effective Federal
    Government.
        We view it as our mission to combat abuse of power and
    corruption in the Federal Government, which includes working on
    rooting out waste, fraud, and abuse.
        The unfortunate truth is that fraud in government programs
    is a fact of life. Since the U.S. Government has existed, fraud
    in government has also existed.
        For much longer than that, in fact. For as long as human
    beings have been organizing ourselves into societies and
    building institutions to govern those societies, there have
    always been those who will seek to take advantage.
        This is a harsh, but real truth related to the human
    condition, related to our fundamentally fallen and flawed
    natures.
        That said, it is still incumbent on every one of us to do
    what we can to prevent fraud, and to hold perpetrators of fraud
    accountable.
        This is especially true when fraud implicates hard earned
    taxpayer dollars, and critical public programs and services.
    This is true whether we're talking about fraud in the context
    of the Feeding Our Future program, or any other program in
    Minnesota. Whether we're talking about welfare fraud in
    Mississippi, which involved the participation of a world-famous
    Hall of Fame NFL quarterback.
        This is true whether we're talking about fraud in the
    context of it being perpetrated by large multinational defense
    companies in the context of multibillion dollar contract they
    have with the Defense Department.
        The point here is that fraud and the abuse of taxpayer
    dollars are not related to any particular geographic,
    demographic, or other boundary or characteristic.
        Why do these things happen so much? Mostly, they are caused
    by deep structural flaws, gaps, and weaknesses in our system of
    government.
        They're also driven by recalcitrance and resistance to
    change on the part of Federal agencies.
        To put it shortly, fraud is a systemic problem, and it
    requires systemic solutions. What are these solutions? I'm
    pleased to share a few of them with you today.
        We must first look at watchdogs, critical sources of
    information, and practitioners of oversight from within the
    Federal Government itself.
        I'm specifically talking about inspectors general, the
    Government Accountability Office, and whistleblowers. Rather
    than attacking, firing, undermining and intimidating these
    individuals and entities as this administration and its allies
    have done, we must strengthen, preserve, and protect them.
        We must enact reforms to make sure that IGs and GAO can
    perform their duties effectively and independently, and we must
    add additional safeguards to make sure that whistleblowers can
    blow the whistle without fear of reprisal, or retaliation.
        We must also take a long, hard look at the architecture
    currently in place for how we track, monitor, analyze, and
    assess Federal funding.
        To put it bluntly, that architecture is broken. Key
    resources like USAspending.gov are in desperate need of
    overhaul and modernization.
        We need to enhance and improve the quantity, quality,
    timeliness, and integrity of the data and information we
    collect on Federal funding.
        We need to promote more accountability, transparency, and
    compliance mechanism within the chain of spending for Federal
    funding.
        If we don't do this, we will never have a good grasp on
    where funding is going, where it's ending up, who is being
    helped by it, who is being missed by it, and what the ultimate
    impact is.
        Last, we must enact robust reforms and vigorous enforcement
    to crack down on corruption, cronyism, and conflicts of
    interest, which turbo charge waste, fraud, and abuse in the
    Federal Government.
        The Presidential Pardon is an acute example of this, with
    each of the last two administrations using the pardon power
    inappropriately to pardon convicted fraudsters.
        We must also promote reforms to crack down on the revolving
    door between agencies and industries, and to head off pay-to-
    play politics, all which distort and corrupt decisions like the
    award of Federal contracts.
        The takeaway here is simple. Focusing on individual
    salacious, scandalous examples of fraud is akin to looking at
    the symptoms and not looking at the disease or the root causes
    of the disease.
        The Project on Government Oversight stands ready, willing
    and able to work with anyone here who wants to work on root
    causes and systemic solutions, so that we can actually get our
    hands around waste, fraud, abuse, and corruption in the Federal
    Government.
        Thank you for having me here today, and I look forward to
    answering your questions.
        [The prepared statement of Mr. Hedtler-Gaudette follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Biggs. Thank you, Mr. Hedtler-Gaudette, and I forgot to
    mention. When you have about 10 seconds left, I will just tip
    that so you will, so everybody will know that as well.
        Mr. Shirley, you're recognized for your opening statement.

                       STATEMENT OF NICK SHIRLEY

        Mr. Shirley. Awesome. I'm here today to speak on behalf of
    all hard-working, law-abiding taxpaying citizens here inside of
    the United States.
        I've helped bring to light widespread fraud that's
    happening inside our Nation, and we the people, have had enough
    of our hard-earned money going toward fraudsters as if it's no
    big deal.
        As I speak here, I want to ask everyone a question. How
    much do we trust when we pay our taxes, it's going to benefit
    our Nation?
        People erupted during the Boston Tea Party over just a few
    percentages as they believed they were being taxed without
    representation. Nowadays, we have the representation, but do we
    trust our representatives?
        My name is Nick Shirley, and I made a 41-minute video that
    I posted on platforms like X and YouTube. My video received
    over 100 million views, and it created instance change within
    our government.
        As the Federal Government launched investigations in
    departments such as Health and Human Services, froze over $185
    million in childcare funding, until businesses can prove they
    are legitimate businesses.
        I actually became aware of the fraud that was happening in
    Minnesota in June 2025, as I was there for a separate video and
    Minnesotans started reaching to me asking if I was making a
    video on the fraud.
        I said well, what fraud? This lady, she was a real estate
    agent and she says well, I'm having a hard time selling my
    properties because people are curious about these assisted
    livings that are popping up next door to some of the houses
    that we're buying, or the home healthcare clinics that are
    popping up. We don't know who is next to these houses that
    we're trying to sell.
        I said well, I'm not going to come and make a video if I
    don't have any proof. Therefore, I left Minnesota, and I
    continued to look for fraud in the best way I could.
        As I was getting my own information, a man by the name of
    David reached out to me and he said hey, I have been
    investigating this fraud for years now.
        I have been driving by these childcare centers. I have
    never seen a single child, and I have received information from
    the State of Minnesota as to how much money these places are
    receiving.
        I said great, let me come to Minnesota and we'll make this
    video about potential fraud that was taking place inside of
    Minnesota.
        We go to a daycare and I'm instantly surprised by what we
    see. We arrived, and it was an industrialized building, and
    there was two daycares registered at that daycare--at that
    building.
        The first thing I noticed is all the windows are blacked
    out, and there's no footprints in the snow of any children.
    There are no playgrounds, or anything that would make it look
    like it was a childcare.
        Above me a sign read, open 7 a.m. to 10 p.m., but there is
    nobody there. The doorbell did not even work.
        Then, we continued to go to other daycares and we noticed
    the same pattern. No children, blacked out windows, and one
    daycare, a learning center, spelled ``Quality Learing Center,''
    instead of ``Quality Learning Center.''
        They had received $1.9 million, yet with that $1.9 million,
    they could not even spell learning right on their sign.
        Government Walz has said he's been fighting fraud in
    Minnesota since 2019, and said the buck stops with him.
    However, how long would it take for you to notice $1 million
    being--leaving your bank account and not knowing where it's
    going? That's essentially what had been happening in Minnesota
    for years as billions of dollars have been misplaced.
        Meanwhile, while people like Governor Tim Walz call people
    like me a White supremacist delusional conspiracy theorist, he
    actually decided to drop out of reelection because I believe,
    of how deep and extensive this fraud is.
        Thank you very much. Since my reporting, the HHS department
    froze over $185 million and to this day, not a single business
    has been able to prove proof of legitimacy.
        How fast would you be proving that you are a legitimate
    business if you have children to actually feed and to take care
    of? You'd be sending that paperwork instantly.
        I made this video to document the widespread fraud that has
    been taking place as I truly believe all fraud is bad. People
    like me, my generation, we're sick of seeing tax dollars go
    toward fraud.
        We just want to have the same opportunities that our
    fathers and our grandparents had, and when you see people
    making millions of dollars by committing fraud, it upsets
    everybody from all age demographics.
        I hope today we can have a good conversation, and we can
    all agree that fraud is bad, and that fraud is fraud, and I
    wish the best for our country, and that's what needs to be
    happening is to crack down on all forms of fraud.
        Thank you for having me and God bless the USA.
        [The prepared statement of Mr. Shirley follows:]
       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Biggs. Thank you, Mr. Shirley. Now, I recognize Ms.
    Larson for your five minute opening statement.

                      STATEMENT OF JENNIFER LARSON

        Ms. Larson. Chair, Ranking Member, and the Members of the
    Committee, thank you for allowing me to speak today on this
    issue.
        My name is Jennifer Larson, I am the Founder and CEO of
    Holland Center in Minnesota. I have been an autism provider for
    over 20 years and started the organization for my son.
        I built Holland Center because families with children like
    mine, were desperate for help. Desperate for services and
    stability; desperate for somewhere they could trust their child
    would be supported and helped.
        Not sent home on a bad day; not babysat in a classroom and
    forgotten. We serve the children that don't succeed in public
    school settings.
        What started as a small program grew over two decades into
    four locations that families rely on not just for therapy, but
    for hope, routine, and survival.
        This work is a labor of love for me. Just like me, there
    are providers all over the State laboring with love to help
    these children.
        In this week, Holland and other programs all over Minnesota
    are collapsing. Not because we committed fraud, but because a
    crime ring was allowed to operate inside Minnesota's service
    system, and the government's clumsy response is now destroying
    legitimate long-standing providers, and devastating families
    that we serve.
        Families come to Holland; they do not have a backstop.
    Their children often receive 30 or more hours of therapy a
    week. These are not an extravagance; these are medically
    necessary.
        These children learn to communicate, regulate their
    emotions, reduce dangerous behaviors, and function in daily
    life.
        For many parents, therapy determines if they can work.
    Consistent staff and therapy prevent severe behaviors and
    regression. Structured care keeps children and their siblings
    safe.
        When services disappear, families do not just simply
    adjust. They face a crisis. For more than two decades, Holland
    has served hundreds of children year after year, employed
    hundreds of clinicians and staff.
        Operated under yearly on sight audits, inspections, and
    documentation oversight. Delivered real services to real
    children every day.
        We have always complied with everything the system
    required.
        Yet, within the last month, the State has withheld over
    $400,000 in Medicaid funds for my own program, and that number
    grows every single day.
        I had to infuse my personal funds to survive these weeks,
    but I can't do that any longer without payment.
        Let me be clear. We are a fee-for-service industry. When we
    can't pay our staff, we lose our staff and children lose care.
        Families do not lose appointments; they lose the people
    they trust. What happened in Minnesota had nothing to do with
    the ethnical, longstanding autism providers.
        What happened was organized criminal networks that
    exploited autism services by opening fake centers, billing for
    children that did not exist, billing for services never
    delivered, and stealing millions of taxpayer dollars in the
    process.
        These are not minor compliance issues. They are criminal
    enterprises. Families trusted that the government was
    protecting the integrity of the system. It failed.
        Now, instead of doing the obvious thing and targeting
    criminal actors, the response has been to freeze everyone's
    payments.
        That decision does not punish the criminals; it punishes
    innocent children and families.
        As Medicaid payments are delayed due to prepayment review
    by an insurance company that is in the business of denying
    claims, providers are reducing hours, cutting staff, and
    starting to close.
        Families are scrambling for alternatives that don't exist.
    Children are regressing; parents are leaving jobs to care for
    their disabled children.
        Autism therapy cannot be paused without consequences. Loss
    of services can erase years of progress in weeks, and abrupt
    disruption of services can cause life-long consequences in
    these children.
        This is not abstract harm. It is daily trauma for families
    already carrying an extraordinary burden.
        The simple solution to the problem is to send the criminals
    to jail and allow trusted providers with decades of clean
    audits and verified ownership structures to continue providing
    prescribed, ethical therapy, and go back to paying them what
    we've earned, and resume paying them on time.
        I built Holland for 20 years. Families built their lives
    around the care that we provide. All of that is risk of
    destruction today.
        Not by fraud, but by clumsy government response that failed
    to distinguish between criminals and caregivers. It treats
    children with disabilities--
        Mr. Biggs. The gentlelady will suspend. We've got a
    photographer there. We allow photographers in here, but not
    between the panel--the witnesses and the Members. You will
    please move. Photographer, please move.
        Ms. Larson. OK, thank you.
        Mr. Biggs. Like, right now.
        Ms. Larson. OK, we are sorry.
        Mr. Biggs. We will--
        Ms. Larson. All of that is at the risk of destruction--
    sorry, can I continue?
        Mr. Biggs. Yes, please continue.
        Ms. Larson. Not by fraud, but by the clumsy government
    response that fails to distinguish between criminals and
    caregivers. It treats children with disabilities as acceptable
    collateral damage. Fraud must be stopped and criminals
    prosecuted.
        I'm a taxpayer, and I live in Minnesota. This is
    disgusting. Families and children should never pay the price
    for government failure. Thank you.
        [The prepared statement of Ms. Larson follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Biggs. We will now proceed under the five-minute rule
    with questions. The Chair recognizes the gentleman from
    Wisconsin, Mr. Tiffany, for five minutes.
        Mr. Tiffany. Thank you, Mr. Chair. Besides the work Mr.
    Shirley has done, I want to recognize Power Line, who has done
    yeoman's work, exposing this over the last decade as to what
    has happened.
        I just want to say, Ms. Larson, I live in Northern
    Wisconsin. There is an autism school that was started in my
    community.
        Where did we visit when we wanted to start that a decade
    ago? We came to Minnesota where you have been leaders in having
    good autism programs.
        I think about the tremendous fraud that has gone on in
    nutrition programs, housing programs, but is there anything
    more heinous than abusing an autism program?
        Ms. Larson. I can't imagine. It's so hard to believe that
    people are faking that children have autism and stealing money
    from the government.
        When I'm sitting here with my 25-year-old nonspeaker, and
    now children like my son aren't going to have services because
    they stole money from the government and faked these things.
        It's just, it is like I said, ``disgusting.''
        Mr. Tiffany. With what's going on right now, what are the
    families that you're serving, what are they saying?
        Ms. Larson. They're scared.
        Mr. Tiffany. What are they doing?
        Ms. Larson. Everybody's scared. There are centers or
    programs that have already shutdown. Staff are leaving. This
    week, I asked my staff who will take unpaid leave because we
    can't keep going like this.
        Like I said, I'm $400,000 plus in debt now, and I'm not
    assured these are going to get paid back. I went to a bank, and
    they wouldn't back the receivable because they said that's not
    a receivable. If it's prepayment review, you may not get it.
        Mr. Tiffany. Ms. Larson, none of this would have happened
    if fraud has not occurred, is that accurate?
        Ms. Larson. Yes.
        Mr. Tiffany. Mr. Dexter, could something been done about
    this earlier?
        Mr. Dexter. Yes. As I stated in my opening testimony, in
    the years that I worked there, we identified how fraud was
    occurring, the loopholes that existed. We brought--
        Mr. Tiffany. What were some of the warning signs, Mr.
    Dexter?
        Mr. Dexter. Well, the fact that part of our job was to go
    and collect attendance records. We would find attendance
    records that were either incomplete or nonexistent.
        Obviously, there were times we found them to be fabricated
    because they were given to us way later. The same with billing
    records.
        They were allowed 30 days after the end of the billing
    period to submit billing records. They were not immediately
    available to us. It kind of allowed overpayments or double
    payments to be overlooked.
        We had the attendance record issue. We had the fact that
    there was no way to verify who was signing the children in and
    out. No way to verify what times those children were signed in
    and out.
        Mr. Tiffany. Could I do a followup here? In Wisconsin, we
    learned this month that Ibrahima Diop, a Minneapolis school
    finance boss, placed on leave for failing to submit required
    financial paperwork with the Minneapolis School District and
    for signing questionable contracts linked to the Somali fraud
    scandal, was hired by the Milwaukee Public School System as a
    deputy superintendent at a salary of $240,000 a year.
        Do you think it wise, might that be a warning sign that
    this person was involved, may have been involved with fraud in
    Minneapolis? Shouldn't they be concerned in Wisconsin that this
    is going--that they're hiring someone like that?
        Mr. Dexter. Well, if somebody that they hired has a past
    history and practice of doing that type of stuff, I would be
    very leery of it occurring again, or that being the basis that
    they're hired.
        Mr. Tiffany. Governor Evers refused to open the books and
    is blocking Federal audits of our food stamp and Medicaid
    programs, and he also vetoed four auditor positions in a recent
    budget. Do you think that is also a warning sign?
        Mr. Dexter. Yes, if it's preventing--
        Mr. Tiffany. Or ill advised? Would that be a better way to
    pose the question?
        Mr. Dexter. Yes, if it prevents the oversight and the
    ability to audit and look at the records to make sure it can
    have a check-and-balance system, that would be very unwise
    because again, that allows fraud to occur.
        Mr. Tiffany. Because Mr. Shirley, what is happening in
    Minnesota, it could be happening throughout the United States,
    isn't that correct?
        Mr. Shirley. Correct.
        Mr. Tiffany. If there's one thing we've learned or
    ``leared'' as said in Minneapolis, isn't it possible that this
    is happening everywhere?
        Mr. Shirley. Yes, I believe it is.
        Mr. Tiffany. Mr. Chair, I yield back.
        Mr. Biggs. The gentleman yields. I now recognize the
    Ranking Member of the whole Committee, Mr. Raskin, for his five
    minutes of question.
        Mr. Raskin. Thank you very much, Mr. Chair. I thank all the
    witnesses for your excellent testimony. Mr. Hedtler-Gaudette,
    administration is systematically undermined government
    oversight.
        The President has fired more than a dozen inspectors
    general, not for any cause but seemingly just in retaliation
    for doing their jobs and to block unwanted investigations.
        President Trump has defunded the Counsel of Inspectors
    General on Integrity and Efficiency. He's removed independent
    leadership at the Office of Special Council and the Office of
    Government Ethics. Blockading whistleblowers and numerous
    investigations.
        What is your assessment, Mr. Hedtler-Gaudette, of the Trump
    Administration's apparent systematic opposition to internal
    oversight mechanisms in the Federal Government?
        Mr. Hedtler-Gaudette. Thank you, Ranking Member Raskin. My
    assessment is that the last year or so has been one of the most
    antioversight and antiaccountability periods that I have
    witnessed in our Federal Government.
        The things you laid out as well as others, are the sort of
    proof in the pudding there. Speaking of things that should be
    giving us pause and raising red flags, that should all be
    giving us serious pause and raising serious red flags about how
    seriously people who claim to take oversight and accountability
    fraud, how seriously do they actually take it?
        Mr. Raskin. There's been a lot of attention given to Donald
    Trump's extraordinary use of pardon power, as in the pardon of
    violent insurrectionists and cop beaters.
        There's also been a forgiveness of a billion and a half
    dollars in restitutionary fines that various people had to pay.
        A lot of them are fraudsters. The DOJ in Trump's first
    term, brought bank fraud and tax evasion charges against
    reality TV stars Todd and Julie Chrisley.
        They were convicted in 2022. They owed more than $22
    million in restitution to taxpayers and to their victims. Then,
    Trump suddenly, inexplicably pardoned them and forgave all the
    money that they were supposed to be paying back to their
    victims.
        Todd Chrisley bragged publicly about his get out of jail
    free card, jubilantly exclaiming the Feds got F'd.
        Let me give you one other example. Trump on April 23rd,
    issued a pardon for Paul Walczak, a former nursing home
    executive who pleaded guilty to multiple tax crimes.
        What he was doing was taking millions of dollars from the
    nurses, orderlies, and doctors who worked for him at his
    facilities, took more than $10 million that way.
        Instead of giving it to the IRS for their taxes, he used
    the money to buy a $2 million yacht, and to pay for high-end
    jet travel, and to go shopping at Bergdorf-Goodman and Cartier.
        Well, he was sentenced to 18 months in prison for stealing
    his tax, his employees' tax withholdings, and he was ordered to
    pay his employees back $4.4 million for the money he looted
    from their accounts.
        He was going to have to pay that back, but then he got his
    mom to go do a glitzy fund-raising dinner for Donald Trump at
    Mar-a-Lago.
        She paid $1 million for her ticket. Then, right after Trump
    was inaugurated in his second term, Walczak petitioned for a
    Presidential Pardon arguing that he was the victim of political
    retaliation because they were Trump supporters.
        What do you know, President Trump issued a complete pardon
    with forgiveness of all the financial fines and restitution,
    that Mr. Walczak was going to have to pay back to his workers,
    the nurses, doctors, and orderlies.
        That was forgiven. That was $4 million taken away from the
    victims of a fraud and given back to the perpetrator of the
    fraud.
        OK, now if we had all day, we could go on all day with this
    because that's how their pay-to-play pardon system works.
        What does this do to our efforts to root out fraud and
    corruption systematically in the government, in crimes, and in
    different industries?
        Mr. Hedtler-Gaudette. I think it provides a perverse
    incentive structure. I opened my statement by saying that we
    all have an obligation and a responsibility to do what we can
    to prevent fraud and to hold perpetrators of fraud accountable.
        That last bit, holding a perpetrator of fraud accountable
    perhaps via conviction, doesn't mean much if all one needs to
    do is contribute to the right super PAC, or attend the right
    fund raiser and suddenly that accountability and that
    conviction is wiped away, including the financial restitution
    you mentioned.
        Those kinds of actions are at direct cross purposes with
    any effort to promote a broader, more systemic approach to
    rooting out waste, fraud, and abuse.
        Mr. Biggs. The gentleman's time is expired.
        Mr. Raskin. Thank you very much, and I yield back.
        Mr. Biggs. The Chair recognizes the Chair of the Full
    Committee, Mr. Jordan.
        Chair Jordan. Thank you, Mr. Chair. Mr. Dexter, let me make
    sure we get this right. You get tips and complaints.
    Whistleblowers or others come to you and tell you something is
    not right at these childcare centers in your State that are
    getting all kinds of taxpayer money. Is that right? That's how
    it started?
        Mr. Dexter. That is correct.
        Chair Jordan. Then, you go and do your work? You have got
    28 years' experience investigating things and specifically in
    the crime and financial fraud area, is that right?
        Mr. Dexter. That is correct.
        Chair Jordan. You go out and find these childcare centers,
    there aren't any kids. No kids are there. There are some, but
    it is like you don't see the playground. You don't see any kids
    at a place where they are supposed to be helping children.
    Then, you also find out most of them are run by Somali
    individuals. Is that accurate?
        Mr. Dexter. That is correct.
        Chair Jordan. Then you make some recommendations. You said
    here is what we should do. I think you put this on page 2 of
    your testimony. You said there are some basic things you should
    do. You said they didn't have a biometric attendance system.
    They should do that. They should have electronic submission
    requirements. They need security cameras. You made some
    recommendations.
        Mr. Dexter. Yes.
        Chair Jordan. Then what happened?
        Mr. Dexter. Nothing.
        Chair Jordan. They ignored your recommendations. It didn't
    stop there, did it? They ignored your recommendations. They
    called you a racist, right?
        Mr. Dexter. Correct.
        Chair Jordan. Typical Left. I always say the Left. Well,
    the Left will tell a lie. Big media will report it. You tell
    the truth. They call you a racist. Exactly what happened here.
        They ignore your recommendations. They call you a racist,
    but it even got worse than that if you can imagine. They
    started investigating you, is that right?
        Mr. Dexter. Yes, we were interviewed by an outside firm for
    a report given to the Office of Legislative Auditor.
        Chair Jordan. What did that report look like? What did they
    say? Did they call you a--what did the report say?
        Mr. Dexter. The report basically questioned our
    investigative tactics, looked at how our unit was managed.
        Chair Jordan. Even though you had 28 years' experience in
    this particular area, tips and whistleblowers came to you, even
    though that was a whole catalyst for doing it?
        Mr. Dexter. Correct.
        Chair Jordan. Yes. OK. The end result is what? The end
    result is Ms. Larson, who is actually helping people, she
    suffers and the people she helps suffer. Isn't that right, Ms.
    Larson? Not to mention the fact that taxpayers are getting
    ripped off, but the people who do good work, who actually help
    people, you suffer.
        Ms. Larson. The disabled are paying for the money stolen.
        Chair Jordan. Yes. Why do you think all this is the case?
    All of this brings to me that this seems to be a typical
    pattern.
        In the end, you have got to ask why. When you point out
    what is going on, you have good people doing good work who
    suffer. The taxpayers are getting ripped off. Someone has got
    to ask, well, why did they take the--not follow your
    recommendations, call you a racist? Investigate you instead of
    just fixing the problem. Why did they do that? What could be
    the answer? Does anyone want to hazard a--Mr. Shirley, do you
    want to hazard a guess why that is the case?
        Mr. Shirley. Well, they simply use that as a deflection
    technique to make you not want to speak out against the fraud.
        Chair Jordan. Yes, it seems to me it is politics. Do you
    think it is politics, Mr. Dexter?
        Mr. Dexter. Yes, I do.
        Chair Jordan. Yes, the people at the top, well, don't want
    to do this. We don't want to be called racist. In fact, we
    found that out a week ago in a hearing where we were looking at
    this Feeding Our Future Program.
        We found out they actually shut that program off for a
    while. They said time out. Something is not right here. They
    found the same kind of things you found, Mr. Dexter. They said
    we are going to stop payment and then it was restarted. The
    reason it restarted is because they threatened a racial
    discrimination lawsuit against the authorities there in
    Minnesota.
        OK. Forget about the fact that if we do this, we restart
    the money, we are going to hurt good people like Ms. Larson and
    the people she helps and rip off the taxpayers. We are going to
    do it all for politics.
        We also found, interestingly enough, the Attorney General
    of Minnesota was at a meeting with the key folks in this
    particular program and then they found out a couple weeks later
    they start sending him campaign contributions. It is politics.
    It is politics driving it all.
        That is why it is appropriate we are investigating here at
    the Congressional level. That is why it is appropriate that the
    Department of Justice has put in place a specific individual to
    focus on this not only in Minnesota but around the country.
        I talk too much. Anyone else wants to--I will give Mr.
    Shirley and Ms. Larson a chance to say anything you want. If
    not, I will yield 28 seconds to our Chair. I will 20 seconds,
    the remaining of my time to the Chair.
        Mr. Biggs. Mr. Hedtler-Gaudette, would it surprise you that
    Joe Biden issued pardons to someone named Crundwell, who had
    the largest municipal fraud in the country's history and had a
    restitution amount of $53.7 million that was never paid on the
    commutation. Would that surprise you, sir?
        Mr. Hedtler-Gaudette. That would not surprise me. Actually,
    in my written statement, I outlined how pardons under the last
    administration, the Biden Administration, they also fall under
    the same pattern of pardoning convicted fraudsters. I am in
    agreement with you there.
        Mr. Biggs. Thank you. Without objection--that time has
    expired. Without objection, Mr. Cline will be permitted to
    participate in today's hearing for the purpose of questioning
    the witness if a Member yields in time for that purpose.
        Now, we are going to go to Mr. Moore from Alabama.
        Mr. Moore. Thank you, Mr. Chair. All this talk about
    pardons and the ultimate shyster, one of them was Hunter Biden.
    He got pardoned after Joe promised he wasn't going to do that
    on the way out. Anyway, that is another pardon for another day.
        Ms. Larson, I am impressed with your son. I honestly
    thought he was your attorney when you guys were sitting there.
    Were there early warning signs that could have been acted on
    that could have prevented the fraud schemes from growing to the
    scale that we see now?
        Ms. Larson. I would say yes. Looking back, the Somali
    community in Minnesota has a high prevalence of autism. I know
    that because I serve a lot of minorities in my centers. When
    these centers started popping up, I thought good for them. I
    took care of my son. We have had a waiting list for five years.
    I thought it was a positive.
        Then, it just started to go and go to where now it is 400
    plus of these. I had started--and I didn't Nick Shirley it--
    that is a verb now, and go out and see because obviously, I am
    busy and that is not what I have time for.
        There were a lot of early warning signs. If anyone was
    actually paying attention--
        Mr. Moore. They would have caught it.
        Ms. Larson. Oh, 100 percent.
        Mr. Moore. How long have you been in business, 20 years, is
    that--
        Ms. Larson. Over 20 years.
        Mr. Moore. You went through a number of audits every year,
    right?
        Ms. Larson. Every year, onsite.
        Mr. Moore. How is it that these groups are getting away
    with it and you are under the thumb of the government auditing
    you every year. Why do you think that is?
        Ms. Larson. Either there is a double standard, and they
    don't, for whatever reason, have the same expectations that we
    do or they are just--
        Mr. Moore. Chair was on to something, maybe it is politics.
        Ms. Larson. Yes.
        Mr. Moore. Mr. Shirley, now I guess investigative
    journalist now known as Right-wing social media influencer, so
    can you confirm how many daycare centers you personally visited
    in Minnesota during your investigation?
        Mr. Shirley. During that first video, we went to around
    seven.
        Mr. Moore. How did you select those facilities? I know you
    said earlier, ``footprints in the snow.'' How is it that you
    identified those facilities to go to initially?
        Mr. Shirley. The man, David, in the video, he had the
    daycares with the CCAP funding. We just simply drove around
    Minnesota and around the Minneapolis area.
        Mr. Moore. It took a lot of courage to do that I would
    imagine, probably more so now than what it was when you
    initially did it. A hundred million views you said?
        Mr. Shirley. Yes, over 140 million views on that.
        Mr. Moore. What was Mr. David's background? How did you
    contact him? How did he call you or did you reach out?
        Mr. Shirley. He is simply--he is just a man in Minnesota
    who has a passion for his city. He had been seeing fraud taking
    place for years. Out of the all the thousands of messages I get
    on Instagram and other platforms, I just happened to read his.
    He provided me the information. I gave him a phone call.
        Mr. Moore. Then from there, just went to those different
    facilities. What was probably the most interesting thing as you
    were doing this. I saw the video. We watched it. I believe
    there were a number of facilities like in the same building.
        Mr. Shirley. Yes. In one building there was, I believe,
    three daycares, and there were no children. They were all
    receiving CCAP funding for separate daycares.
        There was one daycare we went to that one day it was closed
    by the government, and then that same day it was reopened
    underneath another name. They both received CCAP funding.
        Mr. Moore. I bet, Ms. Larson, they weren't getting audited
    yearly like you were.
        Ms. Larson. I would guess not.
        Mr. Moore. How many daycares are there in Minneapolis that
    we think are fraudulent right now, Mr. Shirley? Any idea? Are
    there an amount of money, total? Do you got any idea on that?
        Mr. Shirley. Well, they froze over $185 million and not a
    single business has been able to prove that they are a
    legitimate business yet.
        Mr. Moore. The $185 million for sure that we know.
        Mr. Dexter, I have got a question for you. What common
    patterns or warning signs usually indicate that the provider of
    the program may be committing fraud?
        As you were doing your investigations in 28 years of
    experience, what are some of the indicators that you see that
    should be a telltale sign or a red flag that there is fraud
    there?
        Mr. Dexter. Well, one of the immediate signs that we saw
    that when we went out to look first at the location where that
    was located. A lot of times they were located in commercial
    areas. I am not talking like strip malls or anything like that.
    I am talking about industrial areas where you wouldn't
    typically find a childcare center.
        We would notice that there was no play area. If there was
    any play equipment, it was bare minimum. Now, there was an
    exception that if there was a playground area within a very
    short walking distance, that would count. A lot of times we
    didn't see that.
        The most glaring thing was that when we watched the
    centers, we would sit and watch it for a couple of days before
    we even put up surveillance cameras, we would watch. We would
    see little to no children present. If anything, there would be
    a few kids.
        Mr. Moore. As you began to blow the whistle, the
    investigator became--
        Mr. Biggs. The gentleman's time has expired.
        Mr. Moore. I yield back, Mr. Chair.
        Mr. Biggs. Thank you. The Chair recognizes the Ranking
    Member, Ms. McBath.
        Ms. McBath. Thank you, Mr. Chair. When he began his second
    term, President Trump broke from historic norms and fired 17
    inspectors general, people who serve as critical watch dogs and
    prevent waste, fraud, and abuse.
        A Federal judge held that these firing were illegal, but
    also held that she could not reinstate these people due to
    their important roles. As a result, the President has been able
    to appoint acting inspectors general who have themselves been
    removed after information to Congress that Trump officials are
    not cooperating with investigations.
        Mr. Hedtler-Gaudette, how do these frequent firings affect
    the ability of the inspector general offices to prevent and
    investigate fraud?
        Mr. Hedtler-Gaudette. They fundamentally undermine it, and
    they also create a real chilling effect for the inspector
    generals who are left. The incentive to do something that could
    upset the powers that be, suddenly becomes a bit of a risky
    proposition. Between completely undermining them and the
    chilling effect, you are really dampening and damaging the
    ability to do real oversight.
        Ms. McBath. Thank you. How does the politicization of
    inspector general appointments affect the morale and
    effectiveness of career investigative staff that are within
    these offices?
        Mr. Hedtler-Gaudette. It also has a severely negative
    effect on morale and efficacy within the offices.
        Ms. McBath. I believe we can and should do more to prevent
    fraud and improve oversight so that all our government efforts
    are doing the most that they can to help the American people.
        When the Judiciary Committee marked up the Republican's
    partisan big ugly spending bill, I offered an amendment that
    would dedicate half of one percent of funding to be used for
    oversight, fraud improvement, and prevention. My Republican
    colleagues, they opposed the amendment.
        Mr. Hedtler-Gaudette, in your opening statement, you spoke
    on steps that Congress could take to ensure robust, nonpartisan
    oversight. The Project on Government Oversight recently
    published an article, ``7 Ways Congress Should Sharpen Its
    Oversight in 2026.'' Can you pass him this?
        Mr. Biggs. Without objection.
        Ms. McBath. Thank you. Thank you. Is there anything else
    that you want to highlight from those recommendations?
        Mr. Hedtler-Gaudette. Sure, yes. I just want to pause to
    note that Congress really is the indispensable actor when it
    comes to doing oversight. They are supposed to be a somewhat
    adversarial relationship between the branches, and Congress is
    supposed to be the primary adversary when it comes to--there
    are two branches in conducting oversight. That is predicated at
    Congress taking that oversight duty seriously irrespective of
    who is in charge of the other two branches.
        There is a political will issue there with oversight but
    also there are some mechanical issues. Congress could do a
    better job of holding hearings that are a bit more bipartisan,
    a bit more focused on the facts as opposed to the sizzle of a
    given anecdote or scandal. Really trying to get at root causes
    and really trying to take hard, deep looks at the underlying
    structural reasons why things like fraud happen.
        It is not as sexy. It is not going to get you as many views
    on social media. It is going to actually ideally lead to long-
    term, sustainable, durable reforms that can really crack down
    on the problem.
        Ms. McBath. Thank you. The short-lived DOGE office was
    supposed to cut fraud. Mr. Hedtler-Gaudette, what did it
    actually do, and how did its actions actually affect everyday
    Americans?
        Mr. Hedtler-Gaudette. DOGE was a complete failure. Even on
    its own terms, the primary progenitor of DOGE claimed that he
    was going to find $2 trillion. Then, he moved that down to $1
    trillion in waste, fraud, and abuse cutting spending. In 2025,
    we actually spent more money than we spent in 2024.
        At the opening of this Fiscal Year in October, we ran the
    largest opening month budget deficit ever run before at $285
    billion. We have hollowed out the key functions of a bunch of
    agencies. Any claim that DOGE was effective either on cutting
    spending, promoting effectiveness, or efficiency are just flat
    out undermined and undercut by the facts.
        Ms. McBath. Mr. Hedtler-Gaudette, because you have done
    investigations yourself, did you do any followup on Mr.
    Shirley's video?
        Mr. Hedtler-Gaudette. Personally, I took a look at what had
    been done to try and backstop what Mr. Shirley indicated in his
    video by a professional journalist at CBS and by professional
    oversight practitioners like the inspector general in
    Minnesota. As it turns out, they had a difficult time
    substantiating what Mr. Shirley was claiming to be true in his
    video. In fact, they found countervailing evidence, including
    having been provided security footage by one of those daycares
    of children being dropped off the very day that Mr. Shirley was
    supposedly there.
        In my view, I would have to err on side of believing the
    professional journalist at CBS and the professional oversight
    practitioners at the inspector general's office.
        Ms. McBath. Thank you. I am out of time. I yield.
        Mr. Biggs. The Chair recognizes the gentlelady from
    Florida, Ms. Lee.
        Ms. Lee. Thank you, Mr. Chair. On that note, it is
    important that we return to a discussion of how these
    investigations were conducted and the type of evidence that led
    to the discovery of this massive fraud.
        One thing that is clear based on the testimony today is
    that this is not just a Minnesota problem. This is a warning
    sign for every State that is administering large scale programs
    using taxpayer dollars. We need to get to the bottom of how to
    identify this type of fraud and prevent it from continuing to
    occur.
        Mr. Dexter, I would like to go back to your testimony, both
    of which you have shared with us already about your extensive
    background investigating and analyzing program fraud, and the
    methods that you used to identify the theft of taxpayer dollars
    in this particular type of case.
        In your written testimony, you mentioned that case
    selection and investigations were begun in part by looking at
    funding data. I am interested in how your office would use
    things like funding data, use statistics, and other information
    and evidence to begin to develop these cases.
        Mr. Dexter. Well, it wasn't hard to find the funding
    amounts. We looked at the centers that received CCAP funds and
    then we listed them out. We had what was originally referred to
    as the top 100 list. It was based off of the centers receiving
    the most CCAP funding. That was generated through the billing
    process and the people that administer the funds.
        Ms. Lee. When you looked at that list, did it turn out that
    there were certain facilities that were outliers in some way,
    either because they were receiving a larger amounts of funding
    based on student population that appeared typical or because of
    where they were located. Tell us how you identified which
    facilities warranted further review?
        Mr. Dexter. Well, when we started looking at the centers
    that were receiving the most funds, the investigators were each
    assigned cases, were assigned centers, and when we first
    started looking into what the billing pattern was or what the
    billing amount was, how many children were being billed at
    these centers. We would have centers that were billing for 120
    plus children and looking at the different days and times,
    establishing a pattern that just was outside the realm of a
    typical daycare center.
        Ms. Lee. In other words, you used objective data and
    evidence as the foundation to proceed further with your
    investigations?
        Mr. Dexter. Yes, to start the investigation, that's what we
    would begin with.
        Ms. Lee. In your experience, wouldn't you also say that
    this is the typical method, or a typical method, for beginning
    and analyzing a potential fraud case of any nature in any
    community?
        Mr. Dexter. Yes, because to do the investigation, you first
    have to find out if it warrants an investigation and to what
    extent that investigation would be.
        Ms. Lee. Now, isn't it also correct--you mentioned in your
    testimony systemic weaknesses that allowed the large scale
    fraud even after you had developed substantial evidence that
    there was, in fact, fraud occurring. There were institutional
    and systemic barriers that prevented you from successfully
    moving these cases through prosecution and indeed in your
    testimony you note that in 2019, you chose to retire because
    the process had become so constrained that meaningful work was
    no longer possible.
        Tell us about the barriers and ultimately that profound
    frustration that led you to retire.
        Mr. Dexter. When we were originally hired--when this unit
    was originally created and we were hired, the understanding was
    that our job was going to be to investigate fraud and stop it.
    As we proceeded through with that, it wasn't by our doing that
    it turned out that the centers we investigated were
    predominantly Somali.
        Once that was kind of brought out to light, the roadblocks
    that were put in front of us, being called racist, being called
    before these boards to be investigated, and basically it wound
    up turning us into auditors. We wound up just simply reviewing
    attendance records and matching them up with billing. There
    really wasn't a lot of substantial investigation anymore, and
    most of our cases wound up going before administrative hearings
    rather than criminal.
        Ms. Lee. Which in the end, allowed this pattern of conduct
    to continue to occur, did it not?
        Mr. Dexter. Yes.
        Ms. Lee. Thank you, Mr. Chair. I yield back.
        Mr. Biggs. The gentlelady yields. The Chair recognizes now
    the gentleman from North Carolina, Mr. Knott.
        Mr. Knott. Thank you, Mr. Chair. To my colleague from
    Florida, thank you for that line of questioning. I am going to
    pick up where she left off.
        In regard to the testimony that we have heard today, the
    other side of the aisle makes us believe or wants us to believe
    that the fraud has been effectively stopped. That they
    aggressively pursued it, they prosecuted it, and it is under
    control. Is that your interpretation of where we are, Mr.
    Dexter?
        Mr. Dexter. I believe fraud is still going on. I don't
    think anything has changed from what I have seen with Mr.
    Shirley's videos. I am seeing in his videos the exact same
    things that we were seeing back from 2014-2019 when I worked
    there.
        Mr. Knott. It is astounding to me when I was looking at
    some of the footage, the evidence, there was almost a sense of
    we are owed this money that we are stealing. How dare you
    investigate us? Did you ever encounter that type of attitude
    when you were performing these investigations?
        Mr. Dexter. There was an underlying attitude like that,
    that we were taking away their money and that it wasn't fair to
    them.
        Mr. Knott. Your investigations, sir, was the fraud as
    obvious as it seems to me that it appeared in the videos and
    the other evidence that I reviewed?
        Mr. Dexter. Yes, as a matter of fact when we would go out
    to do our investigations, one of the things that we would have
    to do, or I would have to do, is we would scout out a location
    for our surveillance cameras that allowed us a direct line of
    sight to the centers, all their accesses.
        A lot of that, because of the location where we were in
    these industrial commercial areas, it meant we had to go to the
    businesses and ask them permission. The No. 1 comment they
    made, was ``oh, you mean that daycare center over there where
    there are no children?'' Everyone else saw it.
        Mr. Knott. In regard to your investigation, sir, I am
    assuming that you did not just investigate daycare fraud. What
    other types of fraud did you investigate?
        Mr. Dexter. No, our function was strictly childcare fraud.
        Mr. Knott. OK.
        Mr. Dexter. Some of that overlapped into--even though we
    didn't investigate it, a lot of it was also tied into the
    medical transportation.
        Mr. Knott. Did you ever investigate single entities that
    were appearing as though they were committing fraud in multiple
    avenues?
        Mr. Dexter. I'm sorry. Can you say that--
        Mr. Knott. Was there one facility that was a daycare. It
    was also associated with medical transport. Were there people
    who were double-dipping in the fraud in your investigations?
        Mr. Dexter. Not that we saw as far as different
    organizations, but there was where one daycare center owner
    owned multiple daycare centers. What we saw was more within the
    daycare center.
        Mr. Knott. Yes. Ms. Larson, thank you for being here. I
    echo my colleague's sentiment from Alabama. Your son is very
    impressive. What is his name?
        Ms. Larson. His name is Caden.
        Mr. Knott. Caden, thank you for being here today. You look
    sharp. You are doing great. Let me just talk to you about these
    various audits that you were subjected to. How rigorous were
    they?
        Ms. Larson. Very. They would be there for hours. They would
    come in and say I want to see these files for these kids on
    this date at this time.
        Mr. Knott. Was there anyway that you could have tricked
    them, concealed it? If you had not had any children there,
    would it have been possible?
        Ms. Larson. Absolutely not.
        Mr. Knott. In regard to the services that you have rendered
    first, thank you.
        Ms. Larson. Thank you.
        Mr. Knott. Then, in terms of the budgets that you require,
    how does it make you feel when you hear firsthand accounts that
    hundreds of millions of dollars had been taken out of the
    country in suitcases to hostile nations?
        Ms. Larson. I can't even respond the way I feel about that.
    I will say it is still happening. To the question you--there
    are only two autism centers that have actually been shut down
    of all these that are going on.
        Mr. Knott. Yes.
        Ms. Larson. What they are doing is this prepayment review
    and putting us through this AI system at Optum to look for
    suspicious claims, which is why we are being--our funds are
    being held. It is not going to work.
        Mr. Knott. Yes.
        Ms. Larson. I am going to tell you it is not going to work.
    They just need to do what Nick did. Go and see that there are
    no kids there. Go and check it out.
        Mr. Knott. What Mr. Dexter did. Data driven review without
    any preconceptions, without any prejudices and then holding the
    fraudsters to account. When he did that, he was called a
    racist.
        Ms. Larson. Yes.
        Mr. Knott. It is astounding. It is astounding. You said
    that you helped many patients, diverse patients.
        Ms. Larson. Yes.
        Mr. Knott. How have those patients been harmed by this
    administration in Minnesota, the Walz Administration?
        Ms. Larson. They are all being harmed if I shut down next
    week.
        Mr. Knott. Is that what you are up against?
        Ms. Larson. Well, I haven't gotten paid now. The last date
    of service was December 5th. I am over $400,000 in debt. My
    payroll is $250,000 every two weeks. We get paid every two
    weeks. On Sunday night I will know if I get any money. I
    haven't been paid a dime. All my claims had been held.
        I am preparing to--apparently, Minnesota, too, I can't just
    pause services. If I pause my services, then DHS can say, I am
    sorry you have lost your license to serve the kids through this
    program. I don't know what they think we are supposed to do.
        Mr. Knott. Unbelievable.
        Ms. Larson. Yes.
        Mr. Knott. Well, again, thank you for being here. I
    appreciate all the testimony. Sorry I didn't get to everybody
    else. There are a lot of questions. Chair, I yield back.
        Ms. Larson. Thank you.
        Mr. Biggs. The gentleman yields. I recognize the gentleman
    from California, Mr. Kiley.
        Mr. Kiley. Thank you, Mr. Chair. Mr. Shirley, thank you for
    your testimony today and the work that you have done.
        Americans hear these numbers of the fraud that we have,
    whether it is $10,000, $10 million, or $10 billion, sometimes
    the numbers, you almost become desensitized to it. The way that
    your video was able to show people the fraud in real life
    actually happening opened a lot of eyes, and this helped to
    catalyze a level of scrutiny that we really should have had
    before.
        You mentioned in your testimony that you think what you
    discovered in Minnesota that this is not isolated to that State
    but likely exists in other parts of the country as well,
    correct?
        Mr. Shirley. Correct.
        Mr. Kiley. What makes you think that?
        Mr. Shirley. Well, now you are seeing, since I posted that
    video, lots of other people have started to go to other
    locations, for instance in Ohio, in Maine, or in California. We
    are also seeing similar fraud taking place in other daycares,
    for instance, in a lot of other locations.
        Mr. Kiley. I have a particular interest in California,
    being from that State. We know there has been a lot of fraud.
    There was $32.6 billion that has been confirmed in unemployment
    insurance fraud. There are $1.2 million fraudulent community
    college applications.
        Have you gotten any sense or have you seen any signs there
    that is similar to what aroused your suspicions in Minnesota?
        Mr. Shirley. Yes, the fraud in California might even be
    worse than the fraud in Minnesota.
        Mr. Kiley. What makes you say that?
        Mr. Shirley. Well, $24 billion is missing for homelessness.
    They have been trying to build this train for years, yet there
    is hardly anything to prove for that, buyers.
        Mr. Kiley. Yes, those are good points. You looked at--let's
    run through a couple of those. Because I mentioned the areas
    where we have confirmed fraud, but then you also have these
    areas where you have so much spending and then we look at the
    result from that spending and there is nothing.
        The $24 billion in homelessness, and yet the homeless
    population went up, and a State audit found that they couldn't
    even figure out where the money went or what the outcomes
    linked about spending were. Is that something that is kind of a
    red flag for you?
        Mr. Shirley. Yes, it is a major red flag, and you don't
    even have to be smart to know that it's a red flag.
        Mr. Kiley. Well, unfortunately, our State legislators
    haven't managed to figure that out or at least the Governor
    hasn't. What are you saying about him?
        Mr. Shirley. They are not smart. It is so obvious. That is
    what we saw in Minnesota is how complicit the government has
    been in enabling this fraud to happen.
        Quality Learning Center had over 90 violations and yet they
    continued to give that daycare $1.9 million.
        Mr. Kiley. Yes, that is a great point, that the political
    accountability just hasn't been there and that is what enables
    it to continue.
        Then, you mentioned the high-speed rail as well. There has
    been about $18 billion spent so far. No track has been laid and
    not a single passenger has ridden the train. When you spend $18
    billion on a train and there is no train, does that raise
    suspicions for you?
        Mr. Shirley. Yes.
        Mr. Kiley. You think that might be something worth looking
    at?
        Mr. Shirley. For sure.
        Mr. Kiley. We also had a $650 million 911 service that they
    scrapped after six years so absolutely no value from it. Maybe
    that is another example where there might at least be
    questions.
        Mr. Shirley. I think you have got a lot in California.
        Mr. Kiley. All right. Well, we will look forward to seeing
    what you find. We are certainly trying to use whatever tools we
    have here to bring more accountability to California as well.
        Mr. Dexter, I wanted to also ask you a couple of questions
    about your work. Because you have extensive experience on the
    law enforcement side trying to detect fraud. That is actually
    how in California we discovered the EDD fraud and the
    unemployment fraud, it wasn't the State suddenly figuring it
    out. It was district attorneys who came together and
    investigated and, in fact, pointed to the fact that the State
    had let this happen and failed to heed their warnings and
    hadn't taken basic fraud detection steps.
        Is this something that you encounter? What kind of internal
    controls make it so fraud is more difficult and what type of
    lack of internal controls makes it so that fraud is easier?
        Mr. Kiley. I would say the biggest thing was the fact that
    when we tried to investigate this, once we started bringing
    cases forward and it showed that the number of centers that we
    investigated were Somali, the biggest roadblock was the fact
    that they didn't want to follow through on these cases. They
    shut down investigations. They made us, in light of the report
    from this outside management firm, we spent nearly a year
    pulled away from our investigations because one of the things
    they determined was that when our unit started, we didn't have
    a proper case management system for recording and keeping track
    of the tips.
        As investigators, we instead had to spend nearly a year
    entering past complaints made to DHS into a newly created
    database. We couldn't do our investigations because of that.
    They kept us from doing our work basically.
        Mr. Dexter. Yes, the States that make fraud detection a
    priority have less fraud than those that actively contravene
    efforts like yours.
        Thank you, Mr. Chair. I yield back.
        Mr. Biggs. Thank you. The gentleman's time has expired. I
    recognize the Ranking Member Ms. McBath for some UCs.
        Ms. McBath. Thank you, Mr. Chair. I would like to ask
    unanimous consent to enter into the record an article,
    ``Republicans Claims of Fraud Are a Pretext for Unpopular and
    Drastic Medicaid Cuts.''
        Mr. Biggs. Without objection.
        Ms. McBath. Thank you.
        Mr. Raskin. Mr. Chair. Oh, I am going to have some UC.
        Mr. Biggs. Yup, please go ahead.
        Mr. Raskin. Actually, forgive me. I have a handful of them
    here, Mr. Chair.
        First, a letter dated October 21, 2025, from Representative
    Bennie Thompson to Robert F. Kennedy, Jr., regarding the
    decision to rescind the $101 million penalty imposed on
    Mississippi.
        A press release dated September 17, 2025, titled,
    ``Governor Walz Issued Executive Order Directing State Agencies
    to Take Additional Steps to Combat Fraud.''
        An Executive Order 2501 titled, ``Preventing Fraud and
    Establishing the Financial Crimes and Fraud Section of the
    Department of Public Safety,'' signed by Governor Tim Walz on
    January 3, 2025.
        An article dated December 2, 2025, titled, ``Trump Calls
    Somali Immigrants Garbage as U.S. Reportedly Targets Minnesota
    Community.''
        An article dated January 9, 2026, titled, ``Five States Sue
    Administration for Withholding Billions in Social Safety Net
    Funds.''
        An article dated January 10, 2026, titled, ``Behind the
    Somali Daycare Panic is a Mother-and-Son Duo Angling to Become
    Top MAGA Influencers.''
        An article dated December 31, 2025, titled, ``Right-Wing
    YouTuber behind Viral Minnesota Fraud Video has Long Anti-
    Immigrant History.''
        An article dated January 11, 2026, titled, ``Fact Check,
    What is Really Happening with Child Care Fraud in Minnesota.''
        Finally, an article dated January 13, 2026, titled, ``The
    Trump Administration Says It's Cracking Down OnFraud. It Gave A
    Red State A Pass.''
        Thank you, Mr. Chair.
        Mr. Biggs. Without objection. The Chair recognizes Ms.
    McBath again for another UC.
        Ms. McBath. Thank you, Mr. Chair. I ask unanimous consent
    to enter into the record an article titled, ``Trump's Child
    Care Fund Freezing in Five States Could Cost Families $400
    million,'' by Julie Kashen of The Century Foundation.
        Mr. Biggs. Without objection. I recognize myself for a
    series of UCs.
        From Fox News, ``Biden Clemency for Convicted Fraudsters
    Met with Outrage, Slap in Face.''
        From CNN, ``Victim Shocked After Biden Grants Clemency to
    Kids for Cash Judge and $54 Million Embezzler.''
        From Axios, ``Biden Sets Presidential Record on Pardons and
    Clemency.''
        Also, ``Minnesota Daycare Expose Journalist Strikes Again
    and in Part 2 Names the Hub of the Fraud Wheel.''
        An article, ``Seventy-eighth Defendants Charged in Feeding
    our Future Fraud Scheme,'' from the U.S. Attorney's Office,
    District of Minnesota.
        An article, ``Suitcases Filled with Millions in Cash Flew
    Out of Minnesota Airport, Ex-TSA Agent Connects Dots Years
    Later,'' from MSN.
        From U.S. Department of Health and Human Services, ``HHS
    Freezes Childcare and Family Assistance Grants in Five States
    for Fraud Concerns.''
        From the U.S. Attorney's Office, District of Minnesota,
    ``Six Additional Defendants Charged, One Defendant Pleads
    Guilty in Ongoing Fraud Schemes.''
        This is from the local Fox News in Minneapolis, ``Through
    the Years, a Decade of Investigating Fraud in Minnesota.''
        From the U.S. Department of Homeland Security release,
    ``ICE Continues Arresting Worst of the Worst in Sanctuary
    Minneapolis, Including Pedophiles, Gang Members and Drug
    Traffickers.''
        From MSN, ``TSA Flags Suspicious Cash Outflow at
    Minneapolis-St. Paul Airport.''
        From MSN, ``Foreign ATM, Somalia Cash Exodus from
    Minneapolis Exponentially Larger than Other Major U.S.
    Airports.''
        From Breitbart, ``SBA Cutting Off Grants to Minnesota Over
    Reports of Somali Fraud.''
        An article, ``Vance praises YouTuber Nick Shirley reporting
    on Minnesota fraud.''
        An article, ``Walz and Omar using ICE Operations to
    Distract from Fraud Scandal.''
        From Just the News, in ``Somali Fraud Scandal Republicans
    Probe Evidence of a Blue State Election Scheme.''
        From the New York Post, ``Ringleader of $250 million
    Minnesota Welfare Fraud Scandal Ordered by Judge to Forfeit
    Porsche and Luxury Goods.''
        From LifeZette.com, ``TSA Whistleblower, Somalis Regularly
    Flew Out with Suitcases Stuffed with Millions in Cash.''
        From Fox News, ``Minnesota Welfare Fraud Targets Somali
    Hawala Money Transfers.''
        From the Star News Network, ``Feds Probe Hundreds of
    Millions in Suspected Somali Cash and Luggage Leaving
    Minneapolis Airport.''
        From USCIS, ``USCIS Announces Results of Operation Twin
    Shield, a Large Scale Immigration Fraud Investigation.''
        From PBS, ``Noem Says Homeland Security is Investigating
    Fraud in Minneapolis.''
        From Cornell Law, this is the 18 U.S.C. Section 666,
    ``Theft or Bribery Concerning Programs Receiving Federal
    Funds.''
        Also, same source, 18 U.S.C. Section 641, ``Public Money,
    Property or Records.''
        Also from same source, 18 U.S.C. 1001, ``Statements or
    Entries Generally.''
        Without objection. I now recognize myself for my five
    minutes of questioning.
        I have read all your statements. I do thank you, Mr.
    Hedtler-Gaudette, for your recommendations. Mr. Dexter also had
    some recommendations. I think those are prescient. I think
    those are important.
        I also have to bring some additional information about this
    just because it is in my nature. I got to do it.
        Mr. Hedtler-Gaudette, you have been talking about the IGs
    because you were asked about the IGs. Do you know how many
    cases, for instance, criminal cases, are being investigated,
    say, by the Department of Homeland Security IG right now?
        Mr. Hedtler-Gaudette. I don't know the number off the top
    of my head, no.
        Mr. Biggs. Would it surprise you there were 650 ongoing
    cases with 200 of those being COVID related?
        Mr. Hedtler-Gaudette. That would not surprise me, no.
        Mr. Biggs. Do you know how many audits they have going
    right now?
        Mr. Hedtler-Gaudette. No.
        Mr. Biggs. They have 60 audits going on right now with
    another 20 investigations going.
        That sounds to me like the IG there, at least, and DHS is
    not being chilled because of the appointment of temporary IGs.
    Am I wrong on that or am I misconstruing that?
        Mr. Hedtler-Gaudette. One thing about the DHS IG, Mr.
    Joseph Cuffari, is he was actually appointed under the first
    Trump Administration. He has remained ever since. We actually
    at the Project on Government Oversight have long recommended
    that Mr. Cuffari be fired because he has had a long and
    demonstrated track record of slow walking investigations at
    DHS, particularly when it comes to abuse of force and other
    issues with DHS agents.
        Mr. Biggs. The Oversight Committee for the IGs didn't
    adhere to that recommendation. Anyway, I felt that point needed
    to be made.
        Additionally, Mr. Dexter, you looked at some of the same
    kind of physical evidence that Mr. Shirley looked at with
    regard to physical presence at the various daycare facilities
    that you were examining between 2014-2019, is that true?
        Mr. Dexter. Yes.
        Mr. Biggs. You saw basically the same kind of physical
    evidence that Mr. Shirley exposed?
        Mr. Dexter. That is correct.
        Mr. Biggs. You also looked at funding data, and you also
    had whistleblowers.
        Mr. Dexter. Yes.
        Mr. Biggs. I find it interesting that somehow local news,
    which reported the fraud, other local news reporters reported
    on the fraud, credibly agree with the findings of Mr. Shirley.
    Is that what you have seen as well, Mr. Dexter?
        Mr. Dexter. Yes, Fox 9 News in Minneapolis, they followed a
    lot of our cases and did stories on them.
        Mr. Biggs. The very notion of trying to discredit Mr.
    Shirley because he had a lot of views or that some CBS reporter
    disagreed with and said they couldn't find the evidence
    actually in my mind discredits the CBS reporter. Because I
    appreciate the Ranking Member cited the Arizona fraud, which I
    also constantly cite. It is a massive fraud in Arizona. Not
    just the $2.5 billion, but there is an essential--another
    additional allegation of about $7 billion per year fraud in
    Arizona.
        There needs to be a change there. We need to get a handle
    on this not just in Minnesota, but nationwide because, as we
    have seen in Ms. Larson's case, those who are conducting
    themselves according to the law, delivering services, are the
    ones that also get punished. If you are a fraudster, somehow
    you are able to keep on going.
        The fraud hasn't stopped. Mr. Shirley have you seen any
    evidence--you said twice today that $185 million of recipients,
    not one of them has been able to demonstrate that they are a
    legitimate business.
        Mr. Shirley. No. In fact, they are actually actively suing
    the HHS to prevent handing over any information.
        Mr. Biggs. They don't even want to give the information
    that would be required of an audit, that would be required from
    a separate, independent investigation. They want a court to
    intervene and enjoin and prevent them from having to respond to
    this kind of investigation. Is that correct, Mr. Shirley?
        Mr. Shirley. That is correct.
        Mr. Biggs. This is the thing. I listened to the panelists.
    Everybody on the panel--I think everybody up here--we all want
    to stop the fraud. The bottom line is it is so infused with
    politicization that it is preventing us from just sitting down
    there and saying, OK, we have got a symptom in Minnesota, and
    we are going to fix it. The symptom being exposed is critical
    because then it actually motivates people to try to get to the
    root cause.
        I am out of time, and we have no other Members here. I just
    want to thank each one of you, Mr. Dexter, Mr. Hedtler-
    Gaudette, Mr. Shirley, and Ms. Larson for being here and giving
    us your testimony. I really appreciate it.
        I would encourage my colleagues to be better stewards and
    have better oversight because otherwise Mr. Shirley's
    generation is going to be paying through the wazoo, which right
    now means $40 trillion in national debt.
        Thank you all. I appreciate it. We are adjourned.
        [Whereupon, at 11:56 a.m., the Subcommittee was adjourned.]

        All materials submitted for the record by Members of the
    Subcommittee on Crime and Federal Government Surveillance can
    be found at: https://docs.house.gov/Committee/Calendar/ByEvent
    .aspx?EventID=118871.

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