Amid mounting political pressure to address widespread government fraud, Minnesota Gov. Tim Walz on Friday announced the appointment of an official tasked with creating fraud prevention measures across state government agencies.

Tim O’Malley, superintendent of the Minnesota Bureau of Criminal Apprehension under Gov. Tim Pawlenty, will serve as director of program integrity.

O’Malley is a former FBI agent and interim chief judge for the state Court of Administrative hearings, and for a decade handled allegations of sexual misconduct by clergy in the Archdiocese of St. Paul and Minneapolis.

Tim O’Malley, who will serve as director of program integrity for Gov. Tim Walz, speaks to reporters in the governor’s reception room at the Capitol in St. Paul on Friday, Dec. 12, 2025. O’Malley is interim chief judge of the Minnesota Court of Administrative Hearings and was superintendent of the Bureau of Criminal Apprehension under Gov. Tim Pawlenty. (Alex Derosier / Pioneer Press)

As Walz’s fraud czar, O’Malley will oversee state efforts to strengthen fraud prevention efforts across state government agencies. He will work with an outside financial audit firm, WayPoint, to implement fraud-prevention measures.

“No one has any tolerance for fraud. It’s a widespread problem in Minnesota and across our country. It erodes trust and must be addressed head-on,” O’Malley told reporters at a Friday Capitol news conference announcing his appointment.

Hundreds of millions of dollars

Minnesota has at least lost hundreds of millions of dollars to fraud in federal programs in recent years, prosecutors have found. Former acting Minnesota U.S. Attorney Joe Thompson, who said the state is “drowning in fraud,” estimated the total cost could top $1 billion — though this has not yet been confirmed.

Pressure has been mounting on Walz to address the problem. Recognizing it as a weakness for the second-term Democratic-Farmer-Labor governor, Republican challengers have pushed the issue to the center in the 2026 gubernatorial election.

Minnesota State Medicare Director John Connolly, from left, Shireen Gandhi, temporary commissioner for the Minnesota Department of Human Services, and Josiah Lamb, a forensic accountant and owner of WayPoint, a financial investigations firm hired by the state of Minnesota, attend a news conference on new anti-fraud measures at the state Capitol i n St. Paul on Friday, Dec. 12, 2025. (Alex Derosier / Pioneer Press)

O’Malley’s hiring is the latest in a series of moves Walz has made to address the issue. Earlier this year, he directed the creation of a fraud investigation unit at the BCA. The Department of Human Services moved to shut down a Medicaid-funded housing stabilization program beset by fraud after news emerged in July of a federal investigation into several providers.

WayPoint will build a “consistent framework” for all Minnesota agencies to prevent fraud in the governor’s office, according to BCA Superintendent Drew Evans, who said the state could extend the current  $200,000 contract if more work is needed.

It is the second third-party firm Minnesota has hired to address fraud problems. In October, the Department of Human Services, which oversees the Medicaid-funded programs that have seen significant fraud, hired health care company Optum to audit 14 “high-risk” programs. Results are expected early next year.

“We are going to continue to be a generous state that helps folks,” Walz said. “But we’re going to do so with a skepticism that they haven’t seen … ever through any administration.”

Despite being appointed by Walz, O’Malley told reporters he would operate independently of the governor.

“While I’m honored that Governor Walz has asked me to assist in combating fraud here, know that I’m not here to serve him,” he said. “I’m not here to serve any individual, and I’m not here to serve a political party. I’m here to serve Minnesotans.”

GOP statement

Republican legislators questioned how a person appointed by the governor could function independently. In a statement, Senate Republicans called Walz’s hiring of O’Malley and another third-party group to handle fraud “another flurry of action with no real changes.”

“A statewide director of program integrity isn’t something you need when your commissioners are doing their jobs well in the first place,” said Sen. Jordan Rasmusson, R-Fergus Falls. “Governor Walz had seven years to improve program integrity but failed in multiple agencies across dozens of programs.”

Seventy-eight people alone have been federally charged in the Feeding Our Future case, where prosecutors say scammers took $250 million in federal pandemic aid money from the state for meals they never served to needy children.

A significant number of fraud defendants have come from the state’s Somali immigrant community. In recent weeks, this has attracted the attention of President Donald Trump, who, in response, has escalated immigration enforcement in Minnesota.

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That move, and Trump’s disparaging comments about Somalis have drawn condemnation from immigrant advocates and state leaders, who have said the president is demonizing a largely law-abiding community that is largely made up of U.S. citizens.

Fraud cases continue to emerge. In September, several were charged in connection to millions of theft from a Medicaid-funded housing program for people with disabilities and addiction.