Education Secretary McMahon calls for Walz resignation over fraud

Walz announces fraud prevention program

After millions of dollars of fraud has happened in Minnesota, Gov. Tim Walz announced a new fraud prevention program. FOX 9's Mike Manzoni has more.

ST. PAUL, Minn. (FOX 9) - U.S. Education Secretary Linda McMahon is calling for the resignation of Minnesota Gov. Tim Walz in response to the defrauded government programs that have taken place in the state. 

READ MORE: Fraud in Minnesota: Detailing the nearly $1 billion in schemes

Secretary of Education calls on Minnesota governor to resign

Investigation: Did MN fraudsters fund terrorism?

The federal government is looking into whether Minnesota fraudsters funded a terrorist group out of Somali. FOX 9's Corin Hoggard has more.

What they're saying:

The letter sent to Gov. Walz states that his "careless lack of oversight" led to "fraudsters from around the world, especially from Somalia, to establish a beachhead of criminality in our country."

Secretary McMahon then references "ghost students" that she says her department uncovered at the beginning of 2025, which are fraudsters that were not ID-verified, do not live in the United States or simply don't exist. The letter states that 1,834 "ghost students" were found in Minnesota and received about $12.5 million in taxpayer-funded grants and loans.

Other defrauded government programs were pointed out in the letter, including ones that provided housing, education, food assistance and small business assistance.

READ MORE: Feds announce ‘targeted review’ of Minnesota unemployment, nutrition fraud

Secretary McMahon also said "Minnesota's political elite has turned a blind eye" to the laundered money that funded terrorists overseas. Direct links to Al-Shabab in Somalia have not been confirmed.

The letter ends by saying, "Given your dereliction of the office entrusted to you by Minnesotans, I implore you to resign and make way for more capable leadership."

The full letter was posted on the secretary's social media.

Gov. Walz says he 'welcomes' fraud investigation

The Treasury Secretary is investigating claims that Minnesota state funding is being sent to terrorists overseas. Gov. Walz fired back Tuesday morning, saying he welcomes the investigation but called the president’s threats politically motivated. FOX 9’s Bill Keller reports.

Governor Walz responds

The other side:

The governor's office pointed out that the Walz administration has no role in federal student loans or relief. 

Part of the response from Walz's office states, "U.S. Department of Education Secretary Linda McMahon alleged "ghost student" fraud tied to federal student aid, while describing weaknesses in the Free Application for Federal Student Aid (FAFSA). Once a student fills out their FAFSA, there are verifications that happen at the campus level and the federal level. The Walz Administration has no role. She also referenced federal student loan relief, which again, is a federal program."

The Walz administration also pointed out that Trump administration officials are mistakenly blaming the governor after finding fraud in their own programs. 

The response from the governor's office continued by saying, "The Governor is fighting fraud day in and day out to protect taxpayer dollars – an effort that is comprehensive and time-intensive. Meanwhile, the Trump Administration has exposed a troubling lack of understanding of how to combat the fraud they’ve pointed out in their own programs. Sending a slew of letters and social media posts is not a sincere effort to solve a problem."