The empathy exploit comes to Minnesota

Minnesota turned compassion into a slush fund, lost billions to fake “services,” all made visible by a kid with an iPhone

One of many fraudulent daycare centers in Minnesota - it was so brazen they didn’t even bother to spell basic words right on signs.

I previously wrote about the empathy exploit of the West, how our collective instinct to help can be manipulated into a vulnerability. The unfolding scandal in Minnesota is one of the clearest examples yet.

CBS News had been reporting on large-scale fraud in Minnesota since 2020. It’s been years since then, and now the scandal can no longer be ignored, because it still wasn’t resolved. The details are staggering and the frauds continue revealing a disturbing truth: our systems of kindness are being leveraged against us.

Federal prosecutors have so far charged more than 90 people across various Minnesota assistance programs from housing stabilization to autism services and pandemic food aid [CBS News].

Officials describe it as “industrial-scale fraud,” with estimated losses climbing into the billions. The root of it all traces back to the now-infamous Feeding Our Future case, a $250 million scheme that siphoned COVID-era aid meant to feed hungry children.

How brazen was it? Participants billed the government for millions of “meals” that never existed. Some of the claimed meal sites didn’t even have kitchens. Prosecutors found shell companies, sham invoices, and fake rosters of children. CBS obtained thousands of pages of evidence showing the fraudsters spending taxpayer funds on luxury cars, real estate, overseas wire transfers, even an overwater villa in the Maldives.

When one defendant was sentenced, the judge put it plainly:

“Where others saw a crisis and rushed to help, you saw money and rushed to steal.”

Federal officials say they’ve surged personnel into Minnesota to target large-scale exploitation of federal programs. The FBI dismantled the Feeding Our Future operation in 2022 but has since tracked similar scams using Medicaid and housing grants.

This scandal shows how blind trust in government systems coupled with a culture terrified of being perceived as discriminatory can result in massive public losses.

An auditor’s report last year found that Minnesota’s Education Department “created opportunities for fraud” by missing obvious warning signs. When state officials raised concerns, the organization accused them of racial discrimination, effectively freezing oversight in its tracks. Bureaucrats folded, terrified of backlash.

The founder of Feeding Our Future built a network of shell vendors, many led by members of Minnesota’s Somali diaspora. Federal prosecutors also confirmed that most individuals indicted were of Somali descent.

The other thing to note is how long the fraud has been allowed to persist. For years, this story simmered in documents, indictments, and federal filings. You’d think that when billions of taxpayer dollars vanish (some estimates now topping $18 billion) local journalists would be camped outside the governor’s mansion. Instead, while there was some coverage, it frequently lacked answers as Chris Bray went into, and some of the media even tried to run cover and spin the story. Only after the NYT covered the story late this year and then citizen journalists stepped in to visually document reality (facts tell, stories sell) did we see real awareness.

This week marked a turning point, where a YouTuber digging through public records and shell company data uncovered $110 million in fraud in one day (to be extra clear, this # is in the estimation of citizen journalists and I would rely on auditors to give precise numbers). And while the story was public before, one person with an iPhone accomplished more than hundreds of credentialed reporters combined: they made it visible. That story, embedded below, is now one of the most viewed Tweets in history.

It’s still all very good on the ground citizen journalism and reminiscent of the scene from the movie The Big Short: they did what no one else bothered to do, they looked. Also notable that Michael Moore and other now household names started their careers with work just like this.

You should be outraged, given the federal government tracks $600 Venmo transfers between private citizens with a magnifying glass but somehow can’t account for billions it hands to “community” organizations running so called “education” and “health” centers that exist on a spectrum from operations with laundry lists of violations to cases of outright fraud. It’s an outrageous double standard which the media has oddly tried to run cover for.

While the FBI and IRS are laser-focused on everyday Americans, massive sums dispensed through block grants to states often go unmonitored. In theory, this money is supposed to flow efficiently to those in need. In practice, it becomes a slush fund, a trough for the well-connected and the unscrupulous.

Minnesota’s experiment in hyper-generous welfare administration, built on progressive ideals of “equity” and “access”, has instead demonstrated the collapse of accountability. Every stolen dollar is a dollar not feeding children, not housing struggling families, not serving those with real needs.

This is not just a Minnesota problem. It’s a Western problem: the empathy exploit (or suicidal empathy as professor Gad Saad has talked about). Our goodwill, weaponized. Our institutions, asleep or corrupt.

In their zeal to “right historic wrongs,” policymakers have stripped away diligence in the name of equity. The result? Corruption thriving inside systems that virtue signal but do not safeguard. And it’s ordinary citizens — overwhelmed by taxes and inflation — who pay the price.

Western civilization’s future hangs by a thread of public trust. That trust dies when compassion becomes cover for corruption.

Update: while the media debates the specific centers in Shirley’s video (ongoing safety and health-code violations are essentially indistinguishable from fraud) audits now show Minnesota has lacked the teeth to properly vet attendance records and go after possible fraudsters proactively for 10 years. Where there’s smoke, there’s fire, and we need far more oversight of where our tax dollars go. This story is obviously unfolding, but better late than never we turn off the spigot of tax dollars to shady enterprises.