About half or more of the roughly $18 billion in claims paid out by Medicaid to Minnesota-run programs may have been fraudulent, and at least 14 programs were likely exploited, a federal prosecutor said Thursday.

In October, state officials announced that a third party will audit 14 Medicaid services that are deemed to be "high risk" for fraud in the state. According to Thompson, those 14 programs have cost the state $18 billion since 2018. 

First Assistant U.S. Attorney Joe Thompson said it's unclear just how much of that money is fraudulent, but said it's "far too much" and "an order of half or more, but we'll see."

Thompson said the scale of fraud in Minnesota outpaces that of other states and puts services at risk for people who really need them.

While prosecutors typically see fraud manifest as providers overbilling, Thompson said during a news conference in Minneapolis that companies have been created to provide zero services while pocketing federal funds for international travel, luxury vehicles and lavish lifestyles.

"The magnitude cannot be overstated," Thompson said. "What we see in Minnesota is not a handful of bad actors committing crimes. It's staggering, industrial-scale fraud."

The investigators' new findings may bolster President Trump in his claims that Minnesota is a "hub of fraudulent money laundering activity" under Gov. Tim Walz, who was the Democrats' vice presidential nominee in last year's presidential election.

Trump has capitalized on the fraud cases to target the Somali diaspora in Minnesota, calling them "garbage" and saying he doesn't want immigrants from the East African country in the U.S.

More than 90% of the people charged in the major fraud cases announced before today were of Somali descent, according to the U.S. Attorney's Office for Minnesota.

Walz has denounced Trump's comments, saying an audit due for completion by late January should give a better picture on the extent of the fraud. He said his administration is taking aggressive action to prevent fraud in the future. A spokesperson for Walz did not immediately respond to an email seeking comment Thursday.

Five new defendants have been charged in connection with a Minnesota housing services fraud, Thompson said. Two of them pocketed $750,000 instead of helping Medicaid recipients find stable housing, he said. Prosecutors allege they used the proceeds to travel to international destinations, including London, Istanbul and Dubai.

One defendant submitted $1.4 million in fraudulent claims, using some of the funds to purchase cryptocurrency, Thompson said. Federal officials say he fled the country after receiving a subpoena.

The five charged include two Philadelphia residents who have been accused of "fraud tourism" after they registered as Minnesota providers, Thompson said, adding that for them the scheme was "easy money."

"Minnesota has become a magnet for fraud, so much so that we have developed a fraud tourism industry – people coming to our state purely to exploit and defraud its programs," Thompson said. "This is a deeply unsettling reality that all Minnesotans should understand."

The two men, Anthony Waddel Jefferson and Lester Brown, were accused of siphoning millions from federally funded programs administered by Minnesota officials that were meant to help the disabled and those suffering from addiction, according to court filings.

They allegedly fleeced the housing program in Minnesota despite "living on the other side of the country and having no network in or connections to Minnesota or its communities," the filings stated.

They join eight others charged in September for their alleged roles in the scheme to defraud the Minnesota Housing Stability Services Program.

Prosecutors also named a new defendant accused of defrauding another state-run, federally funded program that provides services for children with autism, alleging he submitted millions of dollars worth of claims for Medicaid reimbursement. One woman previously charged for exploiting that program pleaded guilty Thursday morning, officials said.

Asked who is to blame, Thompson said the state "has not done a good job of mining these programs."