Public Assistance Fraud by a Business or Organization in Minnesota
In Minnesota, when a business, nonprofit, vendor, provider, or other organization wrongfully receives public funds, the individuals involved can face serious criminal charges and other consequences. Medicaid providers are frequent targets, but these cases may also involve programs funded through childcare assistance, housing services, food programs, grants, or other public benefit programs. These charges are becoming more common as enforcement ramps up and new laws go into effect in August 2026. The Minnesota Department of Human Services has increased oversight under an executive order issued in September 2025.
For information on charges against individual recipients of benefits, watch for an upcoming article.
What counts as public assistance fraud?
Minnesota’s public assistance fraud statute, Minn. Stat. § 256.98, generally prohibits wrongfully obtaining public assistance through false statements, concealment of facts, impersonation, failure to disclose required information, or misuse of assistance.
Under legislation going into effect in August 2026, medical assistance fraud, often termed Medicaid fraud, will be much more heavily regulated in Minnesota. A person can also be prosecuted in federal court when the conduct constitutes a federal crime.
In general, for providers or other organizations, examples of public assistance fraud include allegations that the provider:
- billed for services that were never provided;
- billed for more services than were actually provided;
- submitted false timesheets, attendance records, mileage logs, or service notes;
- used fake clients, fake employees, or fabricated documentation;
- billed under another person’s credentials or provider number;
- misrepresented ownership, licensing, staffing, credentials, or supervision;
- concealed conflicts of interest or related-party transactions;
- paid or received “kickbacks”; or
- used public funds for personal or unauthorized expenses.
However, not every billing problem is fraud. Some cases involve poor documentation, employee misconduct, misunderstanding of program rules, or mistakes in billing systems. The key issue is often whether the government can prove intent to defraud.
What are the possible criminal charges?
Depending on the facts, a defendant may face charges in Minnesota or federal court such as:
- public assistance fraud;
- theft or theft by swindle;
- Medical Assistance fraud;
- conspiracy;
- racketeering;
- wire fraud or mail fraud;
- money laundering; or
- tax-related offenses.
The person who is prosecuted does not necessarily have to personally submit every claim to become a target of an investigation. Prosecutors may look at who controlled the business, who benefited from the payments, who had access to billing records, and whether the person knew about or directed the alleged conduct.
What are the possible penalties?
A violation is treated as theft and punishment is determined according to Minnesota’s theft statute. This means potential penalties often depend on the amount of money allegedly obtained. In provider or business cases, the alleged loss can become significant because investigators may review months or years of billing. Potential consequences include not only felony convictions and jail or prison time, but may include:
- restitution;
- fines;
- forfeiture of funds or property;
- loss of licenses or provider enrollment;
- exclusion from public programs; and
- business closure.
What if I’m being audited or investigated?
It is important to take the situation seriously as soon as you learn of an audit, subpoena, payment hold, records request, or law enforcement inquiry. Many cases begin with an audit, and criminal charges are brought later on. Your actions during an investigation can result in further criminal charges or undermine possible defenses. For example, criminal charges can arise from audits when a person makes further misrepresentations, destroys, alters, backdates, or recreates records, or pressures others to do those things.
What are the possible defenses?
Possible defenses may include:
- lack of intent to defraud;
- billing errors rather than criminal conduct;
- eligible services were actually provided;
- the government overstated the loss amount;
- reliance on employees, consultants, accountants, or compliance staff;
- unclear or changing program requirements; or
- constitutional issues involving searches, seizures, subpoenas, or statements.
The best defense depends on the records, the program involved, the alleged loss amount, and the accused person’s role in the business.
Facing a public assistance fraud charge in Minnesota?
A public assistance fraud accusation does not automatically mean you committed a crime. The state must prove the charge, including the required intent and the amount of the overpayment. Having an attorney experienced with fraud can make a substantial difference in the outcome of your case. The attorneys at Sieben & Cotter can help. If you are interested in a free, comprehensive case review, call Sieben & Cotter at 651-455-1555 to arrange your consultation, or send a request for more information.