Republican state senators in New York are calling on Democrat Governor Kathy Hochul to authorize an independent investigation into potential fraud involving publicly funded programs, citing sweeping revelations recently uncovered in Minnesota.
A letter signed by 12 Republican state senators reads:
“We write to you concerning disturbing reports of widespread fraud involving taxpayer dollars in the state of Minnesota, including schemes that reportedly involved sham daycare centers and other illegitimate entities.”
The lawmakers said Minnesota’s Somali-led fraud “revelations raise serious concerns about the vulnerability of publicly funded programs to abuse.”
The letter urges Hochul to “immediately retain an independent private professional services firm to conduct a comprehensive audit of comparable programs in New York State.”
The senators wrote that such a review is necessary “to ensure that public funds are being distributed solely to legitimate organizations and eligible individuals and to identify and address any instances of fraud, waste, or abuse.”
“Given that New York administers comparable programs involving billions of taxpayer dollars, it is imperative that proactive measures be taken to ensure similar abuses are not occurring here,” the letter added.
The Republicans also noted a July announcement from the U.S. Department of Justice involving $68 million in Medicaid fraud tied to a Brooklyn operator of social adult daycare centers.
“At a time when resources are strained, it is essential that available funds are protected and directed exclusively to those who truly need assistance,” they wrote.
The senators said that as Hochul’s office prepares to advance a universal pre-kindergarten proposal in the next legislative session, “ensuring these programs are efficient, transparent, and free from fraud should be a shared priority for all New Yorkers.”
The letter follows widening action in Minnesota, where the Small Business Administration announced that it has suspended 6,900 borrowers after uncovering what it described as widespread suspected fraud.
SBA Administrator Kelly Loeffler told Minnesota’s Democrat Governor Tim Walz in a December 23 letter that the agency would “halt” more than $5.5 million in annual support to SBA resource partners in the state “until further notice.”
“I am notifying you that, effective immediately and until further notice, the SBA is halting the disbursement of federal funds to SBA resource partners operating in the state of Minnesota, totaling over $5.5 million in annual support,” Loeffler wrote.
The SBA said at least $2.5 million in PPP and EIDL funding issued during the pandemic was tied to a Somali fraud network based in Minneapolis.
Loeffler further said that $430 million in PPP funds connected to roughly 13,000 loans were flagged as potentially fraudulent.
However, they were still funded anyway, including some later forgiven during the Biden administration.
“The volume and concentration of potential fraud is staggering, matched in its egregiousness only by your response to those who attempted to stop it,” she wrote.
Hochul’s office dismissed the GOP request in a statement, calling it “a rich political stunt coming from the lawmaker who spent months fighting the Governor’s efforts to route out waste, fraud, and abuse in the state’s Medicaid program,” referring to Republican State Sen. Robert Ortt.
“Instead of suggesting we spend taxpayer dollars to do the jobs of the State Comptroller and State Inspector General, the Minority Leader should focus on supporting the many longstanding initiatives that the Governor has advanced to stop fraud and protect taxpayers,” the statement said.
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