Federal prosecutors said the total fraud in Minnesota's Medicaid programs could be as much as $9 billion, but DFL Gov. Tim Walz and other state officials disputed the amount of taxpayer money stolen is that high.

First Assistant U.S. Attorney Joe Thompson on Thursday, during a news conference about new federal charges, noted that 14 programs deemed "high-risk" had billed $18 billion collectively since 2018 and suggested a "significant" amount could be fraudulent.

"I don't make these generalizations in a hasty way," Thompson said. "When I say a significant amount, I'm talking on the order of half or more," he said without providing more specifics. "But we'll see. When I look at the claims data and the providers, I see more red flags than I see legitimate providers."

At an unrelated press event on Friday, Walz was asked if he had seen evidence of that claim and said no. He praised the work of federal prosecutors and the criminal charges they've filed against accused fraudsters, but called Thompson's statement "sensationalism" and that it doesn't "help" the state tackle the problem that he vowed to fix.

"You should be equally outraged about $1 or whatever that number is, but they're using that number without the proof behind it, Walz said.

Department of Human Services officials agreed that they had not seen data showing that the fraud reached multiple billions. What they have seen is tens of millions in fraud at this point, said John Connolly, deputy commissioner of DHS and state Medicaid director. 

"We don't have evidence in hand to suggest that we have $9 billion in fraud in these benefits over the last seven years. And if there is evidence, we need it so that we can stop paying. That's a very alarming number," Connolly explained. 

James Clark, the inspector general at DHS, said the agency is more aggressively stopping payments to providers at the first signs of fraud. He told reporters he has sent letters to the U.S. Attorney's Office to more closely collaborate.

"That's how this system should work. We investigate. We suspend payments. We refer cases to law enforcement. And to the extent there is information about massive fraud in our programs, billions or nine billions worth of fraud, I desperately want to see that evidence," Clark said. 

This summer, Walz agreed with a previous estimate from Thompson that fraud across all programs, including the Feeding Our Future scheme, which is not a DHS-administered program, could total $1 billion. 

Thompson told reporters that there are federal investigations into all 14 of the Medicaid programs deemed "high risk" for fraud, which are also subject to a third-party payment audit.

Among the individuals charged by the U.S. Attorney's Office on Thursday are two men from Philadelphia who Thompson said have no ties to Minnesota, but started companies here because of what he called "fraud tourism." 

He added that what makes the state's fraud problem unique compared to other states is that many providers are shell companies —entirely fraudulent entities providing zero services. 

"What we see in Minnesota is not a handful of bad actors committing crimes. It's a staggering industrial-scale fraud," Thompson said. "It's swamping Minnesota and calling into question everything we know about our state."