'Where Is This Money Going?': Senator Hawley Presses For Answers On Where Taxpayer Dollars End Up

[00:00:00] Senator Corin, let me just come back to [00:00:01] you. I I want to get a handle here on [00:00:03] just the scale of the fraud in [00:00:04] Minnesota. We talked about the dark [00:00:06] money groups funding much of what's [00:00:08] going on on the ground, but let's just [00:00:09] get a handle here on the scale of the [00:00:10] fraud. You are a member, I want to get [00:00:13] this right, of the legislative uh the [00:00:15] office of the legislative auditor. So, [00:00:18] >> I'm sorry. Go ahead, [00:00:19] >> Mr. Chair. Of the legislative audit [00:00:21] commission. [00:00:21] >> Audit commission. Gotcha. You oversee [00:00:23] the office of the legislative auditor. [00:00:24] Okay. Got it. So, you've got access to [00:00:26] all of this information. Give me your [00:00:29] best estimate. And based on the [00:00:30] information you've seen, the audits [00:00:31] you've seen, how many of the agencies, [00:00:33] 20 or so agencies I think in the state [00:00:34] of Minnesota, public agencies, how many [00:00:36] have rampant fraud? [00:00:37] >> Uh, all of them are wrapped up in some [00:00:39] sort that can issue there's 20 primary [00:00:41] state agencies in state law. Of the [00:00:43] largest or 10 of our largest primary [00:00:45] agencies, many of the nonprofits receive [00:00:48] grants and funding from this from all 10 [00:00:50] agencies. [00:00:52] If you had to put a number on it based [00:00:54] on what you've seen, your work, your [00:00:56] investigations, the audits that you've [00:00:57] seen, what do you think the total losses [00:00:59] are to motans in terms of fraud? I [00:01:01] >> I think the conservative number is what [00:01:03] our federal investigators have [00:01:04] determined of just the 14 Medicaid [00:01:06] programs that half of that half of all [00:01:08] of it would be about $9 billion. And I I [00:01:11] don't think that's and I think the [00:01:13] reason I believe that's true is in each [00:01:15] audit that the legislative auditor [00:01:17] produces we measure right level in the [00:01:19] samples and of what they have done 20 [00:01:22] now 20 to 80% of each one of they're [00:01:24] unable to prove that the dollars were [00:01:27] actually gone have gone to the programs [00:01:29] in which they were indicated [00:01:31] >> $9 billion how how much of this money [00:01:34] has left Minnesota for overseas [00:01:36] >> well in I I arrived in 2017 the child [00:01:40] care assistance program fraud um for [00:01:42] which the program I believe is $130 [00:01:44] million. The whistleblowers proved to or [00:01:47] showed us that they believe a hundred [00:01:48] million of that was fraudulent. We had a [00:01:51] whistleblower come forward um actually [00:01:53] publicly and at that time we also [00:01:55] discovered something new to me which is [00:01:56] the hala process of the movement of cash [00:01:58] through our airports in in Minneapolis [00:02:00] St. Paul and what I've learned come to [00:02:03] learn in that year it was just [00:02:04] coincidentally $100 million in fraud [00:02:06] suspected fraud and $100 million went [00:02:08] out in cash through the Minneapolis St. [00:02:11] airport. I've I've learned that [00:02:13] >> worked. Tell us how that worked. $100 [00:02:14] million in cash through the airport [00:02:16] >> in suitcases. A mill back then it was a [00:02:18] million out of crack. And so I've [00:02:20] learned that in the year before it was [00:02:22] about $74 million. Secretary Bessant [00:02:25] just I've tried for two and a half years [00:02:26] to get that number because I wanted to [00:02:28] get a view of um how many how many [00:02:30] excess dollars are sent out from the [00:02:32] program from from the community that's [00:02:34] sending them. And in the last 2 years, [00:02:37] it was $340 million each year. And so if [00:02:40] you look at it, it's about a 25% [00:02:43] increase over this period from 2017. [00:02:45] That's 1.8 billion in cash. And I don't [00:02:48] think the average citizen who's works [00:02:50] for their money understands how [00:02:53] complicated it is to ship or to obtain 6 [00:02:56] to7 million of cash every single week of [00:02:59] every of the year. Um that's and and our [00:03:03] federal government certainly must have [00:03:04] been aware of it and has done nothing to [00:03:06] to look at it. But that's just all but [00:03:09] about 130 million I think is originated [00:03:11] out of Minnesota. [00:03:12] >> You know the but what every American [00:03:14] taxpayer absolutely understands is their [00:03:16] federal tax money being taken on [00:03:17] suitcases out of this country to go [00:03:19] heaven knows where. I mean if that's not [00:03:22] infuriating I don't know what is. And [00:03:24] the fact that it is systemic in [00:03:26] Minnesota and probably to your testimony [00:03:28] Mr. tuck of probably systemic in a lot [00:03:30] of other places. I mean millions of [00:03:33] dollars in suitcases out of an airport [00:03:35] and that's just one means of shipping [00:03:38] this money around. I mean it's [00:03:39] absolutely unbelievable. I want to come [00:03:41] back to you Mr. Telkov. You testified [00:03:44] that about a trillion dollars you think [00:03:46] is lost in fraud every year. Where where [00:03:48] is this money going? I mean we know [00:03:49] where some of it's going in Minnesota. [00:03:51] It went overseas. It went to Somalia. It [00:03:53] went to it went to NGO fronts. We know [00:03:55] where it's gone in some other states. [00:03:56] California gave away million billions of [00:03:58] dollars to a pro- Hamas [00:04:01] NGO. [00:04:03] >> Uh where but a trillion dollars [00:04:04] nationally. Where's this money going to? [00:04:06] >> I I appreciate that question because [00:04:07] most people don't ask that question. It [00:04:10] goes to terrorism. It goes to child [00:04:12] trafficking. It goes to drugs. It goes [00:04:16] to terrorism. [00:04:17] And then it's used to purchase luxury [00:04:20] items, cars, purses, homes. That's all [00:04:24] funded by people like me that pay taxes. [00:04:28] >> So it's you're telling me that the [00:04:30] electrician who goes to work every day [00:04:33] and clocks in and works his butt off and [00:04:35] tries to earn just enough to be able to, [00:04:38] you know, make his rent, maybe have a [00:04:40] kid or two, put food on the table. His [00:04:43] tax money is being used to buy other [00:04:46] people luxury items, cars, yachts, [00:04:48] whatever else, and is going to fund [00:04:50] terrorism and child trafficking. [00:04:51] >> Yes, sir. a trillion dollars a year on [00:04:54] this stuff. [00:04:55] >> $115 million an hour. [00:04:58] >> $115 million an hour. How do they get [00:05:01] their hands on it? What what are we [00:05:03] talking about here? Trans, national [00:05:04] organizations, criminal networks. How do [00:05:06] they get their hands on this money? [00:05:07] >> They they take advantage of antiquated [00:05:10] government systems and processes. They [00:05:13] go into programs that they know elected [00:05:16] and appointed officials won't touch and [00:05:19] they can steal at scale. And what [00:05:22] happened really was during the pandemic [00:05:24] between the PPP loans and the [00:05:26] unemployment insurance they learned a [00:05:29] really valuable lesson. Government never [00:05:33] runs out of money and the probability of [00:05:36] getting caught is virtually zero. I have [00:05:39] it at onetenth of 1%. [00:05:42] >> So come back to the recommendations that [00:05:44] you mentioned in your opening statement. [00:05:46] What do we need to do to put a stop to [00:05:50] this hemorrhaging of people's [00:05:51] hard-earned money going overseas to [00:05:54] finance child trafficking and luxury [00:05:57] yachts? I What needs to happen here? [00:05:59] >> It's it's really simple. It's used every [00:06:02] single day in the commercial sector. [00:06:04] Front-end identity verification. You [00:06:07] just don't get to say I am who I say I [00:06:10] am. Second, reertification of all the [00:06:14] recipients. There is so much fraud right [00:06:16] now in the benefit programs all across [00:06:19] the country. We need to get a baseline. [00:06:22] Third, these is these this notion of a [00:06:25] third party independent audit. And [00:06:28] finally is involving federal law [00:06:30] enforcement like the Secret Service to [00:06:33] investigate it. The the the thing that [00:06:35] people don't understand is that most of [00:06:37] these beneficiaries, Senator, they're [00:06:40] not real. They're fake. There's [00:06:42] someone's stolen identity that is [00:06:45] getting used in all 50 states.