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Minnesota Governor Tim Walz has fired and reportedly fired the head of the state agency that oversees the payment of funds for social services programs such as Medicaid and housing assistance, after a fire that dragged on for months over hundreds of millions in lost fraud.
The Minnesota Department of Human Services was put on the national scene after citizen reporters discovered a large, extensive network of alleged fraud linked to the Somali community in Minneapolis, where businesses were taking state funds without proof of actual child care or other services being provided.
MNDHS Commissioner, Shireen Gandhi, was removed from her leadership position on Monday, one day before she faces official confirmation hearing local reports described as “corruption,” due to the massive fraud that has plagued the agency.
Gandhi had been involved since early 2025, until Walz took over as the official head of MNDHS in February.
‘DEDICATED PROGRAMS ON TOP OF PROGRAMS’: $1B HUMAN SERVICES FRAUD DOMINATES MINNESOTA’S SOMALIA COMMUNITY INVESTIGATION
After being reinstated as deputy commissioner at MNDHS, Gandhi oversaw an agency that quickly drew the agency’s attention after allegations of fraud involving him and other Walz administration departments broke.
Under Gandhi’s leadership, MNDHS closed its Housing Stabilization Services (HSS) program in October as ballooning payments each year led to the discovery of fraud, with providers using the names of eligible beneficiaries to obtain money through inflated or bogus reimbursement claims, according to a Minnesota House investigation.
Originally estimated to cost less than $3 million, the HSS rollout totaled more than $100 million by 2024, which government officials considered “a lot” of fraud.
The state auditor also alleged that MNDHS created old documents or created them back before Gandhi became commissioner, fueling the kindergarten scandals. In an interview with NBC’s Minneapolis affiliate, Gandhi acknowledged that MNDHS did not act quickly enough to end the HSS scandal.
Gandhi also appeared to criticize federal Medicaid administrator Dr. Mehmet Oz and administration after MNDHS created a fake “fact-checking” website that the Washington Examiner reported sometimes tried to deny the existence of a fraud problem in the state.
After his demotion, Walz publicly lashed out at the White House, accusing Oz and President Donald Trump of playing “politics and health care for Minnesotans.”
“[W]focused on stability and results,” Walz told the Minneapolis-based FOX affiliate.
“Today, we’re building on our success by putting an even stronger structure in place; adding leadership, improving oversight, and making sure these programs are run with the discipline and accountability Minnesotans expect. That’s how we protect care and deliver families,” Walz told the outlet.
TIM WALZ RETURNS TO WORLD ACCUSED BY TRUMP OF ‘IMPROPERTY,’ DODGES LIABILITY FOR FRAUD IN MINNESOTA
Minnesota Gov. Tim Walz testifies during a House Oversight and Government Reform Committee hearing at the US Capitol in Washington, DC, on March 4, 2026. The hearing examined allegations of misuse of federal funds for Minnesota’s social services and Medicaid programs. (Anna Moneymaker/Getty Images)
In one exception, Gandhi said he remains honored to lead the agency under Walz and to oversee “aggressive and proactive work to protect Minnesota’s Medicaid program for Minnesota’s most at-risk residents, detect and prevent fraud, prevent federal cuts in funding, and improve the internal culture of this agency.”
Fox News Digital has reached out to Walz and MNDHS for further comment.
When Walz became commissioner in February, he called it “the toughest job” in the state and said Gandhi could have decided to retire but didn’t.
Minnesota Republicans also responded by blasting Walz for messing up the platform and providing “steady leadership” in fighting the scourge of fraud across the country.
“We could have avoided this entire circus if Gov. Walz had carefully considered who was best equipped to lead DHS in the first place; someone who denies fraud was never qualified to lead an agency that is experiencing the most fraud our country has ever seen,” said Sen. Paul Utke, R-Park Rapids, in a statement.
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“To save [Gandhi] on the board as a deputy commissioner he did a disservice to all taxpayers who lost money due to the fraud he failed to correct.”
MNDHS deputy administrator for Medicaid, John Connolly, will fill Gandhi’s old role.
