Washington, D.C. – The U.S. Department of Agriculture announced an immediate suspension of federal financial awards to both the State of Minnesota and the City of Minneapolis following revelations of widespread fraud in federally funded food and business aid programs.
In a sharply worded letter dated January 9, 2026, U.S. Secretary of Agriculture Brooke Rollins informed Governor Tim Walz and Minneapolis Mayor Jacob Frey that the USDA would pause all new federal financial assistance until the state and city demonstrate “sufficient proof” that systemic fraud and misuse of funds have been addressed. The suspension comes amid fallout from the “Feeding Our Future” case, described by prosecutors as the largest COVID-19 relief fraud scheme in the nation.
Federal investigators say the Minneapolis-based nonprofit and its partners stole nearly $250 million intended for child nutrition programs, including the Child and Adult Care Food Program and the Summer Food Service Program. Seventy-eight defendants have been charged in connection with the case, which the U.S. Department of Justice labeled as “industrial-scale fraud.”
Secretary Rollins’ letter cited failures by both the Minnesota Department of Education and city oversight agencies, claiming they “demonstrate an inability to handle federal resources without additional oversight and accountability measures in place.” The USDA’s move freezes new financial awards but does not affect ongoing payments tied to verified, compliant programs.
On social media, Rollins defended the decision, posting that “enough is enough,” and accusing Minnesota leaders of having “zero plan to fix” the corruption. “No more handouts to thieves,” Rollins wrote. “Time to drain the Minnesota swamp and put American taxpayers first.”
The USDA action follows years of scrutiny over pandemic-era programs in Minnesota. In addition to the Feeding Our Future investigation, federal authorities have pointed to alleged fraud in Paycheck Protection Program loans and housing aid funds distributed through state channels.
The Minnesota Department of Education has previously stated it cooperated fully with federal investigators and implemented new fraud-prevention safeguards following the Feeding Our Future indictments.
The suspension of federal funds marks a rare and sweeping move by the USDA against an entire state and municipal government, signaling a broader crackdown on post-pandemic relief fraud nationwide.
