The crackdown on fraud in Minnesota will serve as a blueprint for a new Department of Justice office focused on protecting taxpayer funds from scams, President Donald Trump‘s pick to serve as the nation’s “fraud czar” explained in his nomination hearing Wednesday.
“The work in Minnesota has been pivotal. The work of the U.S. Attorney’s Office there, and the personnel there, has been pivotal to highlighting the problems of fraud that permeate our taxpayer funded programs,” nominee to serve as assistant attorney general for a new Justice Department division tasked with rooting out fraud, Colin McDonald, said Wednesday.
“That sort of effort … is what the National Fraud Enforcement Division will be looking to do and scale to an extent that we’ve not seen before within the Department of Justice,” he continued.
Trump tapped McDonald as the nominee in January, just days after establishing the Department of Justice’s new division for national fraud enforcement that will “investigate, prosecute, and remedy fraud affecting the Federal government,” according to the White House. The new office follows a sweeping Minnesota fraud scandal, where hundreds of millions of dollars was allegedly swindled from taxpayers through welfare and social services programs.
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“I will be working with the inspectors general community,” McDonald continued. “With our federal agencies and federal partners, with our state and local partners to ensure that we find the fraud where it’s occurring and that we have the resources to prosecute it, to investigate it and prosecute it, and ultimately ensure that the fraud that we’re seeing annually, perpetrated against these programs comes to an end.”
McDonald appeared before the Senate Judiciary Committee Wednesday morning, where lawmakers grilled the nominee about the new office, how it will operate and if it will operate independently of the White House.
Trump delivered his State of the Union address Tuesday evening and announced Vice President JD Vance will lead the administration’s “war on fraud.”
McDonald explained that his office will work to tackle all fraud bleeding taxpayers, citing Government Accountability Office data that estimates between $320 billion to $520 billion in taxpayer funds is lost to fraud on an annual basis.
“My commitment is to work tirelessly to build a division, a national fraud enforcement division, where no fraud is too big for the Department of Justice, and no fraud is too small for the Department of Justice,” he continued.
At the top of lawmakers’ minds were fraud concerns surrounding Obamacare and senior citizens.
Republican Texas Sen. John Cornyn cited that the Government Accountability Office could not reconcile over $21 billion in Obamacare marketplace subsidies in tax year 2023 during his questioning of McDonald.
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“I commit to working tirelessly to root out the sort of fraud that you’ve identified there, and to make sure that every single dollar that’s supposed to go to these programs actually goes to the programs, to the beneficiaries, the intended beneficiaries of these programs, and not to fraudsters. That is my commitment,” McDonald told Cornyn during the hearing regarding potential fraud surrounding Affordable Care Act subsidies.
Scams targeting the elderly also took the spotlight throughout the hearing. Judiciary Chair Chuck Grassley, R-Iowa, pressed McDonald on his efforts to protect seniors from scams, noting that America’s seniors lose $28 billion annually to financial schemes.
The fraud czar nominee pledged that the DOJ would work to protect seniors from the increasingly high-tech scams, which often include using artificial intelligence to confuse and swindle people, noting that the fraud affects entire families.
“It’s not just the grandmothers and the grandfathers, it’s also their family members who bear the weight of these scams and the fraud that’s perpetrated against them,” he said. “My grandmother, one of them, turns 89 years old in two days. And she has seen these … sorts of efforts toward her. And it’s a major issue that the Department of Justice is focused on, and we will be using all available tools to ensure that we combat that problem.”
The massive Minnesota fraud case has reverberated across the nation, with federal Republican lawmakers reinvigorating calls to tighten and monitor the release of taxpayer funds to various programs, most notably social and welfare offices.
Trump spotlighted the fraud in his State of the Union address Tuesday, claiming the scams are even worse in states such as California, Massachusetts and Maine.
“When it comes to the corruption that is plundering — it really, it’s plundering America — there’s been no more stunning example than Minnesota, where members of the Somali community have pillaged an estimated $19 billion from the American taxpayer. Oh, we have all the information,” Trump said Tuesday.
“And in actuality, the number is much higher than that, and California, Massachusetts, Maine and many other states are even worse. This is the kind of corruption that shreds the fabric of a nation, and we are working on it like you wouldn’t believe,” he continued, before naming Vance as the administration leader taking on fraud.
The White House referred Fox Digital to Trump’s State of the Union comments and McDonald’s testimony when approached for additional comment on the federal fraud crackdown efforts.
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Vance joined Fox News’ “America’s Newsroom” Wednesday, and said his efforts will include a “full, whole government approach” to investigating fraud concerns, and enlisting the Justice and Treasury Departments to lead probe on fiscal records.
“There’s a whole host of tools that we have that have never been used, and the president and I talked about this a couple of months ago and said, ‘What if we just did everything that we could to stop the fraud that’s being committed against the American taxpayer?’ The president said, ‘Great idea, let’s do it,’ and we’re going to work on that very aggressively over the next year,” Vance said.
