The Minnesota Day Care Fraud Story: Trump Says Fraud is a Big Problem When Black People Do It
January 6, 2026
Photo by Gautam Arora
At this point in his second term, Donald Trump has probably pardoned more fraudsters than all prior presidents combined. The list of people Trump pardoned, who were either convicted or plead guilty to fraud charges, is extensive. Clearly, fraud is something that is not a concern for the guy sitting in the White House.
The story of fraud in Medicaid and other government programs in Minnesota is also not really news. It was investigated years ago under Biden and has already resulted in more than 60 people pleading guilty or being convicted.
And Trump has been just fine with public sector fraud in the past. The largest single biggest rip-off in U.S. history occurred under the Paycheck Protection Program created during the pandemic in Trump’s first term. The Inspector General of the Small Business Administration (SBA) estimated that there may have been as much as $200 billion in fraudulent payments in the program, which was administered by the SBA.
Hannibal Ware, the Inspector General who uncovered the fraud, who is Black, was fired by Donald Trump at the start of his second term. Linda McMahon, the head of the SBA under Trump, who is white, was picked by Trump to head the Department of Education in his current term.
The reality is that there will always be some fraud in major government programs, just like there is fraud in the private sector. The old-timers here will remember Enron and Worldcom and more recently all the fraud in the financial industry that fueled the housing bubble, whose collapse gave us the Great Recession and financial crisis.
When there is big money to be stolen, people will be there to steal it, and that applies to both the public and private sector. We will likely have some great fraud stories when the AI bubble collapses. To paraphrase Warren Buffet’s great line: when the tide goes out, we find who was swimming naked.
The question that people need to be asking about the Minneapolis fraud is why the Trump administration is yelling about it now? There is an obvious answer: Jeffrey Epstein.
The files are proving to be an even bigger morass for Trump that anyone could have imagined. He clearly was closely tied to the child sex trafficker for decades. That would be a bad enough story in any case, but it is made worse by the fact that the Epstein child sex trafficking ring has been a major theme for the right-wing influencers for years.
They have been pushing stories that had Bill and Hillary Clinton and various other Democratic luminaries at the center of it. Now, it turns out that their hero was Epstein friend Number One. We may never know whether or not Trump did anything illegal in his associations with Epstein, but it’s clear his ties were long and extensive.
And the Justice Department effort to conceal the Trump-Epstein connection is drowning in incompetence, starting with Attorney General Bondi’s famous claim last February that she had the Epstein files sitting on her desk. Now that we know that there are more than a million documents in the Epstein files, Bondi’s claim doesn’t seem very credible.
Trump’s full-court press to block Congress from mandating the release of the file also didn’t help. Nor did the ridiculous and inconsistent efforts at redacting Trump’s name and face from the files.
So, when things are going bad, Trump goes for the racism card. And in this case, he even gets to pick on immigrant Blacks. From the Trump perspective, it doesn’t get better than that.
When people hear about Minnesota Medicaid or childcare fraud they should be thinking about the Epstein files. This is what the story is about. The fraud stories are old news and already well-reported and were being investigated by Biden’s Justice Department.
What needs to be reported now is why Trump is so desperate to push such blatant racism. It looks bad even from a Trumpian perspective.
This first appeared on Dean Baker’s Beat the Press blog.
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