'Beachhead of criminality': Trump admin urges Walz to resign in light of 'ghost students' fraud scheme

Minnesota appears to be a magnet for fraudsters, particularly from Somalia.

While the problem has hardly been a secret — scores of bad actors have been charged and/or convicted in connection with various fraud schemes in the state — the Trump administration has recently taken a special interest, exploring just how bad the graft has gotten on Democratic-Farmer-Labor Gov. Tim Walz's watch.

Much of the focus has so far been on the alleged fraud committed by members of the Somali community in relation to coronavirus pandemic relief funding. However, Education Secretary Linda McMahon hammered Walz in a letter on Monday over student aid fraud in the Gopher State, calling on him to resign.

'Minnesota's political elite has turned a blind eye and even helped facilitate the laundering of money.'

"At the beginning of this year, the U.S. Department of Education became aware that fraudulent college applicants, especially concentrated in Minnesota, were gaming the federal postsecondary education system to collect money that was intended for young Americans to help them afford college," wrote McMahon.

The education secretary referred to these fraudsters as "ghost students" because "they were not ID-verified and often did not live in the United States, or they simply did not exist."

According to McMahon, 1,834 so-called ghost students were found to have received $12.5 million in taxpayer-funded grants and loans in Walz's state.

In June, the Education Department flagged Riverland Community College and Century College in White Bear Lake as two of the institutions in Minnesota that were impacted by the fraud scheme.

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Photo by Celal Gunes/Anadolu via Getty Images

The Rochester Post Bulletin reported in April that Riverland had apparently averaged more than 100 potentially fraudulent applications per year for the previous two financial aid periods.

A history instructor at Century College reportedly told state lawmakers earlier this year that he discovered in 2023 that 15% of his students were "basically an organized crime ring."

Minnesota State College Southeast was similarly impacted, having discovered that the spike in its 2025 spring enrollment numbers was driven by 84 ghost students. While some of the apparent fraudsters at these and other institutions were locals, most were reportedly from other countries.

Ghost students will reportedly engage remotely and do the bare minimum of classwork until financial aid funds are doled out around 10 days into the semester. Once their payday arrives, they usually vanish.

"They collected checks from the federal government, shared a small portion of the money with the college, and pocketed the rest — without attending the college at all," said McMahon. "Our new fraud prevention system has now blocked more than $1 billion in attempted financial aid theft by fraudsters, including coordinated international fraud rings and AI bots pretending to be students."

The education secretary stressed that Walz's "careless lack of oversight and abuse of the welfare system has attracted fraudsters from around the world, especially from Somalia, to establish a beachhead of criminality in our country."

McMahon further suggested that Walz has done "nothing as governor to stop this criminal behavior" such that scammers have "gotten rich off federal housing, education, food stamp, and small business programs — even defrauding assistance for elder care and autistic children."

After suggesting that "Minnesota's political elite has turned a blind eye and even helped facilitate the laundering of money that was meant to help America's least fortunate," McMahon accused Walz of benefiting from the sordid state of play and implored him to resign.

Republican Majority Whip Tom Emmer (Minn.) said that McMahon's assessment of Walz's "catastrophic failures" was "spot on," adding that "it's time for Walz to take accountability and make way for real leadership to clean up this mess."

Walz plans to seek a third term next year.

Former health care executive and Army veteran Kendall Qualls won the non-binding Minnesota GOP gubernatorial straw poll on Saturday, winning three more votes from delegates than Minnesota House Speaker Lisa Demuth.

While a September poll found that Walz had a significant edge over Qualls, it appears Minnesotans are fast losing faith in their governor and his ability to curb fraud in the state.

A recent KSTP-TV/SurveyUSA poll of 578 registered voters found that 69% believe Walz needs to do more to stop fraud in Minnesota. According to the poll, Walz's disapproval rating is 48%.

"It's pretty obvious," Walz said during a press conference on Friday. "Fraud happened. We need to take accountability — ultimately me."

"I take responsibility for everything," added the governor.

Blaze News has reached out to the governor's office for comment.

McMahon's letter comes just weeks after Small Business Administration Sec. Kelly Loeffler announced an investigation "into the network of Somali organizations and executives implicated" in the $1 billion Minnesota COVID fraud scandal, particularly those who received SBA PPP loans.

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