The US Department of Agriculture (USDA) has suspended more than $129 million in federal financial awards to the State of Minnesota and the City of Minneapolis, citing widespread fraud. The move was announced by Agriculture Secretary Brooke Rollins, and takes effect immediately.
In a letter addressed to Minnesota Governor Tim Walz and Minneapolis Mayor Jacob Frey, Rollins said the USDA is halting “all active awards and any future awards” to the state and city.
She also directed Minnesota officials to submit detailed payment justifications for all federal expenditures from January 20, 2025, to the present, within 30 days.
Fraud claims and federal investigations
{{/usCountry}}She also directed Minnesota officials to submit detailed payment justifications for all federal expenditures from January 20, 2025, to the present, within 30 days.
Fraud claims and federal investigations
{{/usCountry}}Rollins said in a social media post that the Trump administration had “uncovered massive fraud” and accused those in charge of having “ZERO plan to fix it.” In her letter, she alleged that “numerous non-profits and businesses” had defrauded the federal government during the current state and city leadership.
The USDA action cites the Feeding Our Future case, a major fraud scheme uncovered in 2022.
Prosecutors said millions of dollars were stolen from a federal child nutrition programme set up during the Covid-19 pandemic. The Justice Department has described it as the largest Covid-related fraud scheme in US history.
Walz has previously said he was “furious” that criminals exploited a programme meant to feed children.
Federal scrutiny has since widened.
Homeland Security Secretary Kristi Noem said ICE agents are conducting a “massive investigation” into alleged childcare and social services fraud in Minnesota. Treasury Secretary Scott Bessent also announced new measures aimed at curbing government benefits fraud in the state.
Will SNAP benefits be affected?
The USDA has not specified which programmes will be impacted by the funding suspension, leaving questions about possible effects on the Supplemental Nutrition Assistance Program (SNAP).
While SNAP benefits are federally funded and typically continue even during funding disputes, USDA grants often support administrative functions, including eligibility checks, staffing, compliance, and fraud prevention.
Any prolonged disruption to administrative funding could strain state agencies responsible for managing SNAP, though there is no indication at
this stage that individual beneficiaries will see an immediate halt to food assistance.
Who may feel the impact?
State and city agencies, along with non-profit organisations that depend on USDA funding for nutrition, food security, and oversight programmes, are expected to be most affected.
While Walz has faced political criticism, he has not been accused of personal wrongdoing. He recently announced he will not seek a third term, saying earlier that he welcomes federal support to root out fraud and that those who commit it “are going to prison.”