Officials in Hennepin County, Minnesota, shut down a $2 million relief fund for businesses claiming to be affected by federal immigration enforcement after officials discovered widespread fraud among applicants, forcing them to end the program. The county board created the fund to help businesses "harmed" by Operation Metro Surge, the federal immigration enforcement operation that began in December 2025. Federal agents shot and killed two U.S. citizens, Renee Good and Alex Pretti, in Minneapolis in January, turning it into one of the most scrutinized immigration enforcement actions in the country.

Of about 300 applications submitted, only 82 were deemed legitimate. Officials distributed only $500,000 before shutting the program down.

County officials found the problem ran deeper than a few opportunists padding their paperwork. Site visits revealed businesses listed on applications that did not exist. Investigators found the same AI-generated language pasted into dozens of unrelated applications with little variation.

Hennepin County Commissioner Jeff Lunde said the fraud reflected a broader breakdown. "The fact that people, after all this fraud, felt that they could apply and get away with it, I think it's a problem because clearly there's no fear out there," Lunde said. "Until we get it where people fear things, then they're gonna keep doing it."

Lunde described watching the numbers deteriorate in real time. "Then at a certain point we're like, 'OK, we're getting declining results on that.' And so we said it's time to stop the program. So we just stopped processing at that point," he said. He described the bulk of the applications as fraudulent outright, a flood of fabricated claims rather than a handful of bad actors slipping through the cracks.

Neither Hennepin County nor Walz's office responded to Fox News' requests for comment.

Independent journalist Nick Shirley kicked off Minnesota's fraud reckoning with a viral December video accusing several Somali-run daycare centers of billing the state for children who were never there, a claim he put at more than $110 million in fraudulent billing. The FBI previously dismantled a $250 million fraud scheme involving the nonprofit Feeding Our Future, which falsely claimed to have served millions of meals to children during the pandemic.

President Trump has spent much of the past year aiming his rhetoric about Minnesota's fraud problem at the state's Somali population, pointing to a string of prosecutions involving nonexistent or dormant businesses and nonprofits used to drain government aid programs.

Walz testified before the House Oversight and Government Reform Committee in Washington, D.C., on March 4, over the alleged misuse of federal funds across Minnesota's social services and Medicaid programs. Vice President JD Vance referred Walz and state Attorney General Keith Ellison to the National Fraud Enforcement Division earlier this year for a potential criminal investigation. Republicans argue the two enabled a fraud scandal that has metastasized across the state's welfare system. Walz and Ellison acknowledge that taxpayer money was misused but insist Republicans are inflating the scope for political gain.

That fraud division is now a Senate vote away from becoming a permanent fixture at the Department of Justice. The House passed the bill 352 to 72 on Wednesday, with every "no" vote coming from Democrats. More than 140 House Democrats, including Minority Leader Hakeem Jeffries, joined every Republican in support. Democrats voted to give permanent status to the very fraud division Vance had already used against their own governor, suggesting Minnesota's fraud problem is harder to spin from inside the caucus than from a podium in St. Paul.

Rep. Harriet Hageman (R-Wyo.) didn't hold back on what Minnesota has revealed. "What has come [out of Minnesota] over the last year, what has been exposed, is absolutely criminal in nature," Hageman said, adding that fraud in other Democrat-run cities and states is likely "higher by an order of magnitude."

Hennepin County just handed her something better than a talking point. A program built to comfort the supposed victims of immigration enforcement collapsed under the exact kind of fraud Minnesota's leadership spent a year dismissing as a right-wing conspiracy theory.