Trump launched a ‘war on fraud.’ Here's why it’s a 50‑state problem

President Donald Trump declared a “war on fraud” during his State of the Union address, embracing a task that has eluded presidents for decades. He even tapped his vice president to lead the effort.

"This is the kind of corruption that shreds the fabric of a nation, and we are working on it like you wouldn't believe," Trump said.

It's a battle that fraud experts have pleaded with the government to take on for years as transnational criminal gangs have learned to savvily game the public safety net and steal trillions of dollars from American taxpayers.

The Government Accountability Office estimated in January that the government loses as much as $521 billion a year to fraud. Haywood Talcove, one of the country's top government fraud experts, told USA TODAY the fraud could be as high as $1 trillion a year or more.

The new effort's chances of success are unclear. Most modern presidents have promised to expose the roots of fraud in government systems but haven't succeeded.

And as methods of applying for and using government programs have steadily moved online in the past decade, fraud experts say, the gangs committing fraud on a massive scale have outwitted attempts to stop them.

"There's basically an untapped spigot," said Talcove, CEO of LexisNexis Risk Solutions Government, which helps create fraud prevention strategies.

The Trump administration has blamed immigrants for the fraud, especially in Minnesota and other Democrat-controlled states such as California. In his State of the Union address, Trump said "Somali pirates" brought a culture of corruption to the United States.

Less than 24 hours later, Vice President JD Vance cut off some funding to Minnesota and put the state on notice.

But experts such as Talcove stress that fraud occurs in federal public assistance programs like the Supplemental Nutrition Assistance Program, Medicaid and housing assistance in all 50 states.

It isn't a red or blue state problem, they say. It's an issue of how well states and the federal government work together.

White House led anti-fraud program

The White House did not respond to USA TODAY's requests for more information about what Vance's efforts would look like, what federal agencies would be targeted or how states would be included.

Vance's efforts began immediately. At a news conference with Vance on Feb. 25, Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz announced that the federal government deferred $259 million in Medicaid payments to Minnesota amid concerns over possible fraud involving federal money intended for personal care and home- and community-based services in the state.

The state sued March 2 to force the administration to release the money.

Minnesota's Democratic governor, Tim Walz, told the House Oversight Committee in hearings March 4 that the state is being unfairly targeted because members of the Somali community were part of the fraud ring.

"It's been pretty clear the president does not like me personally," Walz said. "I think he has people around him who were trying to find quotas around immigration and they saw a perfect storm, if you will, that included some Somali folks."

Oz said his agency could follow with similar actions in other states.

Minnesota "is not the only state that's floundering," Oz said. "We have more announcements with other states coming soon."

Vance said at the news conference he hopes to work with states on reducing Medicaid fraud, but he's not confident they all will.

"We'd love for that to happen," he said. "I think you're going to see that in some states, even some blue states, but you're not going to see it in others."

Whose job it is to prevent fraud?

Many safety net programs are paid for by the federal government but are run by the states.

The federal government sees identifying and avoiding fraud as a state responsibility, but states have little incentive to spend state tax dollars preventing fraud involving federal money, Talcove said.

"There's zero incentive for a state to put an enforcement policy in place," he said.

The Republican tax and spending law signed last summer forces states to respond to fraud in some programs, most notably SNAP, or risk taking on some of the program costs. It also requires states to more frequently check eligibility of people receiving SNAP and Medicaid.

Labor Department Inspector General Anthony D'Esposito said some states already have strong guardrails. Others do not, he said.

"When you have no guardrails and you eliminate the checks and balances because you're trying to claim that you're being compassionate, all of that leads to fraud," he said. "There are some states that you look at the ... metrics and you know ... they've done a great job. They have guardrails in place and the fraud ... is very limited because they have oversight of it. And then there's other states which ... they take what is federal money and they think it's like Monopoly money."

Though the Trump administration spent 2025 focused on blocking billions in aid to five Democrat-controlled states because of suspected fraud, all states grapple with fraud, and they aren't solely controlled by Democrats.

The U.S. Sentencing Commission found in fiscal 2024 that the states with the most government benefit fraud cases were Florida, North Carolina, Puerto Rico, South Carolina, Virginia, New York and Texas.

Mark Haskins, former branch chief of the special investigations unit for the Department of Agriculture's Food and Nutrition Service, said more strict federal standards for how the programs are administered could help stem the fraud, because right now the rules vary by state.

"We are our own worst enemy in this," said Haskins, who served under multiple administrations. "We have allowed so many loopholes and left so many doors open that these transnational crime organizations are crawling through everywhere they can."

Blaming immigrants

The Trump administration has tried to tie fraud to immigration in the public's mind. The president said in his address to Congress that "importing these cultures through unrestricted immigration and open borders brings these problems right here to the USA, and it's the American people who pay the price."

In December, Trump cited suspected fraud in Minnesota’s Somali community tied to a 2022 investigation into misused pandemic day care funds. The claims were used to justify a sweeping immigration crackdown in Minneapolis.

The Justice Department has charged more than 80 people since 2022, many of them U.S. citizens of Somali descent, in connection with COVID-19-related fraud schemes targeting government-funded programs, including child nutrition and housing initiatives. 

The suspected ringleader of the scheme is not Somali but a White woman − Aimee Bock, 45, who was convicted in March 2025 and faces up to 33 years in prison. 

"It's unfair to characterize it as Minnesota only," Talcove said. "It's happening (in) all 50 states."

Statistically, it's just not accurate to blame immigrants for large-scale fraud, said David Bier, director of Immigration Studies at the libertarian think tank CATO Institute.

Noncitizens face more barriers to applying for benefits, and naturalized citizens are screened for criminal history, he said. And nationwide data shows fewer instances of fraud convictions among noncitizens and naturalized citizens, he said.

"We have good reasons to think that immigrants are significantly less likely to steal welfare benefits than the (U.S. citizen-born) population is," Bier said.

And targeting a group of people for investigation based on where they are born isn't fair, he said.

"I think what people are asking for in some cases are profiling of the immigrant population or Somalis or noncitizens, whatever. And it's not fair," he said. "That ... does not comport with due process to investigate someone just because of where they were born or their citizenship status."

Who is committing the fraud?

Some states are reluctant to crack down on fraud because they worry about accidentally cutting off help for Americans who need it, Talcove said. The No. 1 thing he stresses to lawmakers is the people committing the most fraud are not their constituents. Most of the money probably isn't even staying in the country, he said.

"Transnational criminal groups have specialties. They focus on all 50 states, they share data," he said. "They have money mules here, and then they take the money and they move it out of the country."

Fraud has increased dramatically as more government systems have moved online. During the pandemic, when the government shoveled money out the door to keep the economy moving, international grifters "went nuts," Talcove said. Since then, the fraudsters have become even more sophisticated.

Some have become experts in committing fraud using the same identities in the same programs across multiple states because they know states don't share information, he said. Others specialize in creating fake businesses to get paid for providing services to people who don't exist.

Haskins said criminals are so good at covering their tracks that investigators often cannot even follow the money. For example, they might sign up to accept SNAP with one bank account and then change the bank account a half-dozen times before the fraud is even uncovered.

"Really what it boils down to is the antiquated legacy systems in government," Haskins said. "You know, whether it's Medicaid fraud, Medicare fraud, workers comp fraud, the systems are outdated."

Mike Peck, assistant special agent in charge of the Secret Service's Global Investigative Operations Center, said that for the longest time the government thought these criminal groups were working independently.

"Now we are fully confident in saying this is organized crime," he said. "They have the tools, they have the means and they have the know-how, and they are collaborating."

The groups have found vulnerabilities and weaknesses in the application processes and have learned how to apply quickly and easily, he said.

"They are very well-versed in what they're doing," Peck said. "They study, they know exactly what needs to be on an application. ... This is big business to them."

Expert recommendations

Trump isn't the first president to want to tackle government fraud. Presidents Bill Clinton, Ronald Reagan, Barack Obama and Joe Biden all took it on and were unable to stop it.

Last year, the Elon Musk-led Department of Government Efficiency said combating fraud in government programs was its priority. But the effort fell far short of its goal to find trillions in savings for the government. Multiple analyses found that DOGE overstated and miscalculated its savings.

Some experts also have accused the Trump administration of weakening fraud prevention by making false claims and removing nonpartisan government watchdogs. Days into his new administration, Trump fired more than a dozen inspectors general across federal agencies, including for the departments of labor, treasury, defense, education, and health and human services.

For years, external experts and government watchdogs have provided the legislative and executive branches with recommendations − often in live testimony and official reports − to plug the leaks, but the recommendations often aren’t implemented by the agencies or enforced by Congress.

In mid-February, Talcove presented Congress with four specific ideas: front-end identity verification, recertifying every beneficiary, third-party audits and more involvement from federal law enforcement.

He acknowledges it would be inconvenient and expensive, but "if you don't do it, you're just going to bleed money."

D'Esposito said there needs to be more proactive monitoring across government programs rather than reactive audits once the money is out the door.

And the federal inspector general's offices need to be beefed up, Haskins said. For example, when he left government last fall, the USDA had 80 active field agents to oversee the entire $100-billion-a-year program.

For a long time, states and the federal government have relied on the "pay and chase" method, in which money is paid out upfront before verifying eligibility. If fraud is determined, then the payer attempts to "chase" the money and get it back.

The process is flawed. People often face short prison sentences and fines far below what was stolen, Haskins said.

Haskins said U.S. attorneys tend to go after only the biggest cases, and the average SNAP prosecution takes three years. He said the government needs to set up task forces with state and local governments to help pursue some of the smaller fraud.

Fraud is not a victimless crime

D'Esposito said it's important to remember that fraud isn't a victimless crime, and every dollar out the door could be spent elsewhere.

"There would be a lot more resources for our vulnerable population, whether it's seniors or those that are sick or those that are handicapped, special needs," he said. "There's so much of our vulnerable population that I think could be provided more resources and probably get resources much easier if many of our systems weren't just taken over by fraud."

Sarah D. Wire, a senior national political correspondent with USA TODAY, can be reached at [email protected].

(This story was updated to meet our standards.)