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Minnesota fraud whistleblower says ‘lack of guardrails was pretty shocking’

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Minnesota fraud whistleblower says ‘lack of guardrails was pretty shocking’

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A Minnesota woman employed by the state’s Department of Human Services is speaking out against what she describes as incompetence within the department following the discovery of rampant fraud in the state’s healthcare system.

Faye Bernstein told the City Journal in an interview that she first began to realize the high risk of fraud at Minnesota’s DHS in 2018 and 2019 following a promotion to a lead position.

“Over the years, I had often thought that DHS is sloppy,” she said. “But 2018 and 2019 are when I saw, oh gosh, this is beyond normal. If we don’t have fraud today, we’re going to have fraud soon.”

Bernstein has been a DHS employee for two decades, working in contract management and as a compliance officer, she told the outlet. In her lead position, she said she was able to see all the contracts being worked on by those in her division and witnessed conflicts with the contracts that could be deemed risky.

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MINNESOTA ‘ON THE CLOCK’ AS HHS THREATENS PENALTIES OVER CHILDCARE FRAUD SCANDAL

The Minnesota Department of Human Services building in St. Paul. (Michael Siluk/UCG/Universal Images Group via Getty Images, File)

“I was aware that our contracting processes were leaving us completely open to fraud,” Bernstein said. “But to realize the lack of guardrails was pretty shocking.”

Federal prosecutors estimate that up to $9 billion was stolen through a network of fraudulent fronts posing as daycare centers, food programs and health clinics. The majority of those charged, so far, in the ongoing investigation are part of Minnesota’s Somali population.

Homeland Security investigators were part of a large fraud investigation last month in Minneapolis following the release of a video alleging daycare fraud. (Department of Homeland Security)

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When she tried to report the issues at the time to her deputy director, Bernstein said she was told to stop asking questions. Bernstein said she felt retaliated against after most of her duties were reassigned and was eventually “shuffled from one job to another.”

HOUSE REPUBLICANS CALL MINNESOTA FRAUD PROBE ‘TIP OF THE ICEBERG’ AS MORE BLUE STATES FACE SCRUTINY

“Even our human resources people would tell us, ‘If your supervisor tells you to do something, you must do it.’ And when you didn’t, the word ‘insubordination’ came up,” she said. “They considered it insubordinate if you resisted an unlawful direction.”

Bernstein told the outlet that she has been going through emails received beginning in 2024 from members of the public warning about the alleged fraud.

“I was really surprised at how much notification we had,” she told the outlet. “Did we really ignore all those people writing in? Members of the public had advised us of this [alleged fraud] in email after email after email.”

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TRUMP ADMIN PUTS MINNESOTA ON NOTICE, MOVES TO AUDIT MEDICAID AND CLAW BACK FUNDS TO PROTECT TAXPAYERS

The state’s DHS on Friday said that recently released federal data shows Minnesota’s Medicaid program has a significantly lower improper payment rate than the national average, with an error rate of just over 2.1%, compared with a national average of 6.1%.

State officials also noted the data was collected before Minnesota began rolling out additional measures aimed at reducing fraud risk.

“We’re committed to making Minnesota a national model for preventing fraud and catching errors,” said Shireen Gandhi, the state’s interim human services commissioner. “This review shows we have strong internal controls that we continue to improve, and we are not stopping there as we accelerate our efforts to fight fraud.”

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Bernstein, who said she has only voted Democratic, said the fraud was genuine and not partisan politics.

“This is definitely not something that the Republicans are making up,” she said. “This is real.”

Fox News Digital’s Alex Miller contributed to this report.

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Detroit, MI

Police search for suspect, accomplice after teen injured in shooting outside Detroit school gym

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Police search for suspect, accomplice after teen injured in shooting outside Detroit school gym



The Detroit Police Department is searching for a suspect and an accomplice in connection with a shooting last week that injured a teen outside a school gym.

The shooting happened in the 3400 block of St. Aubin, the same area where the Detroit Edison Public School Academy’s Early College of Excellence is located. Police say that at about 8:27 p.m. on Feb. 27, there was an altercation inside the gym that continued outside. 

Detroit police are searching for a suspect and their accomplice in connection with a shooting outside a school.

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Detroit Police Department


Police say the suspect allegedly fired multiple shots at the victim, striking him. The teen was taken to a hospital for treatment. His current condition is unknown.

Police say the accomplice who was with the suspect was also armed.

Anyone with information is asked to call DPD’s seventh precinct at 313-596-5740, Crime Stoppers at 800-Speak Up or DetroitRewards.tv.

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Milwaukee, WI

Milwaukee Common Council opposes We Energies’ data center rate plan

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Milwaukee Common Council opposes We Energies’ data center rate plan


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The Milwaukee Common Council has called on state utility regulators to reject We Energies’ data center rate proposal in its current form.

The council unanimously adopted a resolution March 3 opposing We Energies’ proposal to create a separate energy rate for large-scale data centers, saying the plan does not go far enough to protect ratepayers.

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At the same time, a group of council members led by District 14 Ald. Marina Dimitrijevic is drafting a six-month moratorium on data center development in the city of Milwaukee.

We Energies’ plan “is not a good deal for Milwaukeeans,” Dimitrijevic said during a Common Council meeting March 3.

We Energies’ proposal would create a separate energy rate for “very large” customers with an expected load of 500 megawatts or more. These very large customers, which include data center developers like Microsoft and Vantage, would pay for the massive amount of new infrastructure being built to serve them.

In October, We Energies filed plans to build more than $5 billion in new solar projects and natural gas plants to meet electricity demand brought by hyperscale data centers.

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The utility says its rate plan protects customers from bearing costs associated with these projects, and hold data center companies responsible for costs through the life of the new assets.

“Our proposal is fair, transparent, and establishes strong safeguards — including binding agreements so data centers owners, not other customers, pay for the infrastructure they require,” We Energies spokesperson Brendan Conway said in a statement. “That means Wisconsin families are not subsidizing these projects.”

The resolution, introduced by Dimitrijevic, calls for stronger ratepayer protections, including binding service agreements that last the life of new infrastructure and include termination charges. It also wants the “very large” customer threshold lowered from 500 megawatts to prevent avoidance by data center companies.

In filings submitted to the Public Service Commission, We Energies said it would be willing to lower the threshold to 250 megawatts.

The resolution took particular issue with We Energies’ proposed cost split for the new natural gas plants. Under the current proposal, data center companies would pay for 75% of operating and maintenance, and other ratepayers would cover the remaining 25% as well as annual fuel costs.

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We Energies says the plants will serve all customers as demand for energy is projected to rise across rate classes.

“If data centers never existed, we would’ve had to have built other plants, other power generation to meet our customers’ increasing need,” Conway previously told the Journal Sentinel.

The resolution said data center companies should pay “100% of all incremental and fixed costs required to serve them, including generation capacity, operations and maintenance, and fuel costs attributable to serving the data center load.”

Council members’ concerns echo those brought by environmental and consumer advocacy groups during a public hearing Feb. 10. The Public Service Commission will rule on the proposal by May 1.

This is not the first time the City of Milwaukee has weighed in on We Energies cases brought before the Public Service Commission. It’s intervened in opposition to previous energy rate hikes proposed by the utility, arguing they disproportionately burden thousands of low-income Milwaukee households.

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In December, Dimitrijevic proposed a six-month moratorium on data center development in the city. The pause will give council members time to establish a regulatory framework for large-scale data center proposals, she told the Journal Sentinel.

“Sometimes the economy moves so quickly that we haven’t been able to catch up in licensing,” Dimitrijevic said. “We have to set up a careful way to regulate it and have public input.”

A group of aldermen want to require data center developers apply for a special use permit through the Milwaukee Zoning Appeals Board, a process they say creates more transparency. Should this pass, large data center proposals would be subject to public hearings, and the Zoning Appeals Board can reject a plan based on public health concerns.

The moratorium will receive a public hearing in the next few weeks.

This article was updated to include new information.

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Francesca Pica can be reached at fpica@usatodayco.com.



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Minneapolis, MN

Whitefish council creates proclamation in solidarity with city, citizens of Minneapolis

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Whitefish council creates proclamation in solidarity with city, citizens of Minneapolis


The Whitefish City Council in February presented and signed a proclamation expressing solidarity with the city and citizens of Minneapolis.

The proclamation states that Whitefish mourns the loss of life that occurred in Minneapolis and stands in solidarity with its residents.

It reaffirms the city’s commitment to equal treatment under the law and emphasizes that peaceful protest is a fundamental American right.

The proclamation was supported by five of the six council members.

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Mayor John Muhlfeld said the action was meant to reaffirm the city’s values.

“A mayoral proclamation that is supported by five of six City Council members supporting solidarity with the city and citizens of Minneapolis, Minnesota, and reaffirming our supportive, just, equal and welcoming community,” Muhlfeld said. “I think this is somewhat overdue. Our town’s been through a lot over the years, This is more importantly to reaffirm our values as a council with our community because we care deeply about you.”

Over the last year, Whitefish has faced criticism amid rising tensions surrounding the Department of Homeland Security.

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View the full proclamation below.



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