Good morning.  And happy birthday’s eve to our editor, Brian. This is the last edition until Wednesday to give the team a holiday breather before a convention weekend.

Gov. Tim Walz won’t be going to the DFL state party convention in Rochester, at least not in person. Chalk it up to scheduling problems but Walz explained that he’s trying to give space to candidates who are running as well. “It’s time for me to step off the stage,” he said. Listen to Politics Friday to hear Walz talk about the newest federal fraud charges, the sentencing of Aimee Bock, his view of the Minnesota U.S. Senate race, how Democrats should approach redistricting and what’s next for him. We taped it on Thursday. The show airs at noon and you can find it in your podcast feed later. 

Several Trump administration officials were in town yesterday to announce criminal charges in Minnesota related to $90 million in allegedly stolen Medicaid funding. Seven state-managed Medicaid programs were “systematically pilfered” by people who used them “as their personal piggy bank,” said Colin McDonald, assistant attorney general in the Justice Department’s national fraud enforcement division. He said it was the “beginning of our work in Minnesota” and announced the expansion of a fraud strike force team in the Midwest. The news conference comes a day after federal prosecutors filed a fresh batch of social service program fraud charges. Mehmet Oz, administrator for the Centers for Medicare and Medicaid Services, noted that $350 million in Medicaid funds for Minnesota have been deferred amid concerns about fraud. He said the money would remain deferred until the state can justify the spending. 

The ringleader of the Feeding Our Future scandal faces an almost 42-year sentence. The founder of a nonprofit that’s become synonymous with fraud in Minnesota was sentenced Thursday to 500 months in prison and ordered to pay $243 million in restitution, our colleague Matt Sepic reports. After more than five weeks of testimony in early 2025, jurors took just five hours to convict Bock on all seven counts of wire fraud and bribery. Federal prosecutors had sought 50 years in prison for Aimee Bock, who founded and led Feeding Our Future. Last year, a jury convicted Bock of orchestrating what investigators say was the nation’s largest COVID-era fraud scheme.

Political leaders were quick to weigh in on both the sentence and the new charges. Democrats said the state had worked with the feds in the investigations and were glad to see the charges brought forward. They also said a set of new guardrails — including an Office of the Inspector General — would prevent similar misuses of state-managed programs in the future. “Feeding Our Future happened in that gap,” without an independent watchdog office, said Sen. Heather Gustfason, DFL-Vadnais Heights. “Minnesota has now closed it.” Republicans also took credit for the creation of the new office as well as other safeguards, and they faulted the Walz administration for allowing fraud to persist on his watch. “Let’s be clear: Minnesota’s fraud crisis exploded on the watch of Gov. Walz and legislative Democrats. They were never serious about stopping fraud, and it was not until House Republicans ended Democrats’ trifecta in 2024 that we were able to make sure action was taken on this crisis in St. Paul,” said House GOP Leader Harry Niska, R-Ramsey.

A federal judge has set a July 1 hearing on a possible injunction to stop Minnesota's ban on prediction markets. U.S. District Court Judge Laura M. Provinzino, who is based in Minneapolis, expects to decide whether to halt the law before it takes effect on Aug. 1. A federal entity, the Commodity Futures Trading Commission, sued to stop it. The new law bans the organization or advertising of prediction markets like Kalshi or Polymarket in Minnesota. The CFTC argues Minnesota has overstepped its authority. It cited agricultural-based weather trades as a concern. A bill to revise the new law also passed. It would allow for weather-related wagers. 

Who you gonna call? The Legislature approved funding to combat “ghost student” fraudsters. College administrators say "ghost students" are fraudsters, often overseas, who enroll in schools using fake or stolen identities to steal student benefits or financial aid. Craig Munson, the chief information security officer for Minnesota State Colleges and Universities, told lawmakers this session that his school system experiences “thousands” of these attempted scams. "Fraudsters conduct these attacks at scale, often attempting to enroll hundreds and even thousands of students, fake students, at once," Munson said in the House Higher Education Committee. Munson said the problem has been on the rise since the expansion of online learning that came with the pandemic and advancements in AI. “We are experiencing an artificial intelligence battleground.” Though his school system stops many attempted scams and uses a variety of fraud detection tools, the “gold standard” is implementing automated identity proofing systems that use biometrics and document verification to verify students. He said those systems will “dramatically” speed up and improve fraud detection. The Legislature approved $3 million for the Minnesota State school system to implement these systems across its 33 schools over the next several years.

The Republican Attorneys General Association says Minnesota is on its list of states where it plans to book TV ads ahead of the November election. The group says it’s reserving $11 million across six states that it views as particularly competitive. “These early TV reservations and direct candidate investments are merely a down payment on the resources RAGA will marshal this fall,” the association’s Executive Director Adam Piper said. “Democrats should understand that Republican AGs are not playing defense. We are taking the fight directly to them, and we are going to make sure voters know exactly what is at stake in these races.” Two-term DFL Attorney General Keith Ellison is running for reelection and is expected to face Republican attorney Ron Schutz.

The Democratic Lieutenant Governors Association is focusing its first ad in Minnesota’s Senate race on the immigration agent operation this winter. Liam Ramos, the boy detained along with his father, is mentioned. DLGA supports Lt. Gov. Peggy Flanagan over U.S. Rep. Angie Craig. We reported earlier on a buy that stretches through the summer ahead of the August primary. DLGA says it had made an initial $2 million buy that is spread across TV and digital platforms. At least one group is already active on Craig’s behalf. Neither Craig nor Flanagan has gone up on TV herself.