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Take a look at the actual 2019 OLA report McKenzie cites. This characterization is wrong in ways that matter.

The "50% fraud" claim? It comes from one investigator (Swanson) using what the OLA explicitly calls "a higher level view, a view that does not require the kind of proof needed in a criminal or administrative proceeding." His methodology? If kids are poorly supervised, "running from room to room while adult employees spend hours in hallways chatting".... he counts the entire payment as fraud. That's not "billing for phantom children" it's "I don't like how this daycare is run."

The OLA's actual finding: "We did not find evidence to substantiate the allegation that the level of CCAP fraud in Minnesota is $100 million annually." Proven fraud over several years was $5-6 million.

Terrorism? "We were unable to substantiate the allegation that individuals in Minnesota sent CCAP fraud money to a foreign country where a terrorist organization obtained and used the money." They checked with the U.S. Attorney's Office.. none of Minnesota's terrorism cases involved CCAP money.

McKenzie writes "beyond intellectually serious dispute" about claims the primary source he cites explicitly could not substantiate.

Meanwhile the president is posting videos of the Obamas as apes and calling Somalis "garbage", having federal prosecutors throwing out arbitrary $9 billion estimates in press conferences.

See for yourself: https://www.auditor.leg.state.mn.us/sreview/ccap.pdf

The Swanson memo memorializes the consensus of his investigatory group and, put to question by OLA and legislators, they stick with that story:

Page 14 of PDF:

[The OLA] did not find evidence to substantiate Stillman’s allegation that there is $100 million in CCAP fraud annually. We did, on the other hand, find that the state’s CCAP fraud investigators generally agree with Stillman’s opinions about the level of CCAP fraud, as well as why it is so pervasive.

(Stillman is a line level investigator who gave a media statement which was explosive. Swanson, who authored in the internal memo, was his manager.)

I do mention that other officials only agreed to characterize as fraud fraud which had resulted in convictions. We now, years later, have nine figures just from the convictions (and guilty pleas). These officials pointedly refuse to put any number on fraud other than the number incident to convictions.

Moreover: you should be very clearly correct if you accuse someone of citing a document as making claims it does not say. That is a serious accusation. BAM's citation of this piece is "the state’s own investigators believed that, over the past several years, greater than fifty percent of all reimbursements to daycare centers were fraudulent." This is _absolutely true_ and _is in the report as claimed_.

Spent about 30 minutes, and it looks like your defense further validates OP.

In the essay, you wrote that industrial-scale fraud is "beyond intellectually serious dispute," cited the OLA report, and presented the 50% figure as the finding that "staggers the imagination."

When challenged, you retreat to: "My citation that investigators believed this is absolutely true."

Those are completely different claims. "Some investigators believed X" is not "X is beyond intellectually serious dispute" — especially when the same report on the same pages says:

- The OLA itself: "We did not find evidence to substantiate the allegation" (p. 5)

- The DHS Inspector General: "I do not trust the allegation that 50 percent of CCAP money is being paid fraudulently" (p. 12)

- The investigators themselves had "varying levels of certainty — some thought it could be less, and some said they did not have enough experience to have an opinion" (p. 9)

- Swanson explicitly used "a view that does not require the kind of proof needed in a criminal or administrative proceeding" (p. 10) — counting the entire payment to any center with poorly-supervised kids as "fraud"

That's not "beyond intellectually serious dispute." It is, literally, a documented dispute, inside the very report you cite as settling the matter.

And "nine figures from convictions"? That's Feeding Our Future, a federal food nutrition program. The OLA report is about CCAP, a state childcare program. Proven CCAP fraud remains at $5-6 million. You're retroactively validating a CCAP claim with convictions from a different program.

Instead of giving parents vouchers, that they then use at a fraudulent daycare, in exchange for a fake job, while they take care of their children at home, parents should just get money, so that they can stay home taking care of their children if they prefer that.

Or get a proper kindergarten run by the government. Radical idea, I know

Patrick is too polite to mention it, but frauds work much better if the fraudsters are also fully integrated into the political machine of the people nominally investigating the fraud.

I don't think that's in evidence. Institutionalized and ideologically-driven apathy towards the fraud, sure, but that's not uncommon (see: the defense industry; the finance industry).

A distinction without a difference imo. I think most people rightfully surmise the defense and financial industries are rife with, if not outright fraud, at least waste and abuse. We could use better language perhaps.

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The man has nothing nice to say about Bigfoot.

The alternative explanation that he is against cryptocurrency actually is true.

https://en.wiktionary.org/wiki/cryptoracist

Crypto[insult] is just a shorthand for saying "I don't actually have evidence to support my accusation."

No, it’s a term for a particular brand of racism -

Like complimenting someone for being ‘articulate,’ or ‘one of the good ones.’ Sounds innocent enough, until you understand the racist underpinnings.

See above, where it is being used as an insult without any evidence to back it up. This is the most common usage, and usage defines the true meaning of the word.

So it's a made up term from people who want to discredit people they don't like by calling them "secret racist" without having any proof.

I should warn you that the user you are replying to is a crypto-paedophile. Be careful. There is no evidence to describe how he might retaliate.

All terms are made up by humans

Yeah but calling someone a racist is a serious accusation, you better bring receipts or be liable for defamation. Calling them a "secret racist" instead isn't the workaround that absolves you from this.

> Yeah but calling someone a racist is a serious accusation, you better bring receipts or be liable for defamation

There are a large number of countries with their own systems of law, and its possible that in one of them calling someone a racist might be subject to defamation law, but in most I am aware of that's going to be a problem because its not even a well-enough-defined fact claim to be legally true or false.

You cannot in fact be made liable for defamation for calling someone a racist.

(Patrick, a close friend I have known for many years, is not a racist.)

Its hilarious how short human memory is. To me Minnesota just seems like a replay of Tammany Hall in NYC

Then I think you need to read more about Tammany Hall, because it was not simply a widespread pattern of fraud in social services.

There was few social services at the time. It was a patronage system. Different rewards but buying votes all the same. My point is that patronage is a long storied American tradition so I don’t know why people are al shocked that such schemes are still ongoing. Republican and anti castro cubans is or was a similar patronage system.

> They will sometimes organize recruitment very openly, using the same channels you use for recruiting at any other time: open Facebook groups, Reddit threads, and similar. They will film TikTok videos flashing their ill-gotten gains, and explaining steps in order for how you, too, can get paid.

> As a fraud investigator, you are allowed and encouraged to read Facebook at work.

I tend to believe this, but it would be a lot more compelling with links to a case where Facebook/TikTok posts were useful evidence.

There are tons of these out there.

In late 2024 there was the whole "Infinite money glitch" tiktok trend that was just check fraud.

https://www.bbc.com/news/articles/c4gzp7y8e7vo

Good example, though my impression was that was a quasi-viral TikTok trend that caught up random fools, not organized fraud?

Is that contradictory? Seems like organized fraud would need a supply of random fools, and a viral trend, if you can manage one, isn’t a bad way to get that.

Organized fraud preys on disorganized fools, but this fraud didn't require or benefit from organization. You could just go do it on your own, and pocket the money until you got a visit from the cops.

You need a central actor who is benefitting from all the fools

Yeah, I fail to see the organization.

Here's a rap video, the entirety of which bragging about fraud against the government:

https://www.youtube.com/watch?v=K0ck7hTsug8

"I just been swipin' for EDD

Go to the bank, get a stack at least

This ** here better than sellin' Ps

I made some racks that I couldn't believe

Ten cards, that's two-hunnid large"

(For context, "EDD" is California’s Employment Development Department.)

With Google I can find out that he was prosecuted after his video came out. I'll count it. https://abc7.com/post/nuke-bizzle-rapper-edd-fraud/12024561/

It's interesting to note that some states restrict the use of rap music lyrics as evidence:

https://legalclarity.org/using-rap-lyrics-as-evidence-in-cri...

On Shirely, and the reaction: there's a markedly different valence to a fraud 'investigation' seeking to arrest, try, convict, and imprison _fraudsters_ vs one seeking (through a thin veil) to mar an entire community and bring about their violent dispossession at the hands of unaccountable little green men. It would not be an unreasonable person that strongly supports the former and opposes the latter.

Hmm, you completely lost me at "little green men". What/who is this referring to? Extraterrestrials?

The last time I heard about "little green men" (other than ETs) was to describe obviously-but-unofficially Russian soldiers who invaded Crimea in 2014 and claimed to be natives who wanted Russia to annex the region.

https://en.wikipedia.org/wiki/Russian_occupation_of_Crimea

I guess it's now being used as pejorative against groups of vaguely military style. Like the DHS agents conducting Metro Surge.

> Responsible actors in civil society have a mandate to aggressively detect and interdict fraud. If they do not, they cede the field to irresponsible demagogues. They will not be careful in their conclusions. They will not be gentle in their proposals. They will not carefully weigh consequences upon the innocent. But they will be telling a truth that the great and the good are not.

Leaving this to the conclusion does the piece a disservice. One can quibble (and it would be good to here) the extent to which the government isn't pursuing the sorts of fraud discussed, but this as a thesis makes clearer the argument throughout for earlier and more aggressive pursuit.

All I remember hearing about this is how creepy and racist it was to look for kids at a black-owned daycare. It was a scam the whole time?

According to OP, there is substantial evidence indicating about 50% of the daycares are scams. I've seen Nick Shirley's video, I don't think he demonstrated any concrete about any of the sites he visited (he's not a very good investigator), but if the 50% number is correct... well, the broken clock was probably right at least a couple of times that day.

The 2019 OLA report "Child Care Assistance Program: Assessment of Fraud Allegations" is what makes the claim that greater than 50% of reimbursements to child care providers under these specific programs were fraudulent. That estimate is broadly and bipartisanly considered to be directionally true.

Have you read the document? I often find these things that we believe to be true wind up being a game of telephone. We further have no prior (is the metric of this sort of like how everyone has committed a crime given sufficient prosecutorial attention)?

I've also never heard of this report before this year as someone quite attuned to what happens in Minnesota.

One document contributor contends, notably, that if "adult “employees” spend hours in hallways chatting with other adults [...] the entire amount paid to that provider in a given year is the fraud amount."

I'll leave the assessment of that definition to readers. https://www.auditor.leg.state.mn.us/sreview/ccap.pdf

Under "In which we briefly return to Minnesota":

> And I think journalism and civil society should do some genuine soul-searching on how we knew—knew—the state of that pond, but didn’t consider it particularly important or newsworthy until someone started fishing on camera.

In... the same section where he cites all of the evidence the government has put together against the fraudsters. What is the issue? That these investigations should have been more prominently featured in the mainstream news? Would that have helped or hurt investigations?

> Of course, as the New York Times very carefully wordsmithed recently:

>> Minnesota officials said in early January that the state conducted compliance checks at nine child-care centers after Mr. Shirley posted his video and found them “operating as expected,” although it had “ongoing investigations” at four of them. One of the centers, which Mr. Shirley singled out because it misspelled the word “Learning” on its sign, has since voluntarily closed.

> An inattentive reader might conclude from this paragraph that the Times disputes Shirley’s reporting.

The New York Times is literally quoting what the Minnesota officials said. What were they supposed to do, add on "but a kid on YouTube says differently"?

I don't think the serious response to Nick Shirley's "journalism" is that there was no fraud; rather, it's that he came into the situation with a thinly veiled agenda and fed his audience exactly what they wanted to hear. Did his video make it more or less likely that we'll be able to investigate and resolve the fraud situation in MN? I guess that depends on how serious you think the laughably corrupt Trump administration is, but the fact that they seized on this as an excuse to send in 3000 ICE agents is not exactly promising.

The report to the government about a more than 50% fraud rate was from six years ago. The Minnesota government was not serious about dealing with problem. Most businesses would not last that long with a 50% customer fraud rate.

Yes, there were some investigations and convictions, but nothing to on a scale that would deal with problem, nor any systematic change to a level paying huge amounts of money to scammers.

He cites the 50% number from Jay Swanson, a CCAP Investigations Unit manager, and then dismisses criticism of the number by saying the criticism requires an unreasonable standard (only criminal convictions).

But if you read the cited source of how Swanson came up with that number he said it wasn't just for over-billing (claiming more kids than the places actually had).

Instead, by his estimation, the employees working are not actually working because 'children are unsupervised, running from room to room while adult “employees” spend hours in hallways chatting with other adults' and so all of the funds to those providers are fraudulent. [1]

I think it's pretty easy to criticize the logic for that 50% fraud rate number without requiring criminal convictions.

[1] https://www.auditor.leg.state.mn.us/sreview/ccap.pdf#page=16

This is a great argument. I wish this is what we were discussing rather than Nick Shirley and the partisan politics of the issue.

5 years ago. And it looks like the state was actually taking pretty aggressive moves against the fraud including ongoing investigations and legislation to shut down the fraud. [1]

There was active prosecution ongoing literally right up until Shirly's video. That's taking the matter seriously.

[1] https://en.wikipedia.org/wiki/2020s_Minnesota_fraud_scandals

>There was active prosecution ongoing literally right up until Shirly's video

Oh yeah, the prosecution was sooo active that all the daycares listed as operational and receiving funding, had no kids in them, had blacked out or boarded up windows, misspelled signs, and if you went in to ask for enrollment 3 angry men would come out shouting at you. How many legit daycares have you seen that look like that?

Yes, because when I enroll a child in a daycare I start by wandering around the facilities with a camera man and then I demand to see the children. But sure is suspicious that this place has no kids in it when I visit it outside it's posted operation hours.

Nick did a day worth of shooting, didn't follow up, and didn't check basic things like hours of operation.

Right, everybody, especially the author of this piece, agrees that what Shirley did was bad and stupid. And also unnecessary, because we had documentary evidence from the Minnesota government itself showing the scale of the fraud here.

I doubt Patrick is the world's biggest Nick Shirley fan, but that's not really how it's conveyed in the article.

Shirley gets acknowledged to have "poor epistemic standards" (which is an almost euphemistic way of describing his approach) but Patrick goes on to say that "the journalism develops one bit of evidence...." and even appears to insinuate the NYT erred in reporting it in the context of the Minnesota government's response that the state's own compliance checks had found them open shortly afterwards but that some of them were under investigation.

There's an interesting point to be made that detailed, bipartisan evidence collected by suitably qualified officials that some daycenters were closed at times they were claimed to be open gets less attention than a YouTuber with an agenda rocking up at nurseries at what may or may not have been their opening times, but that's not how it's actually expressed. Rather it seems to be arguing for face value judgements of his video and against journalists that felt compelled to point out that whilst evidence of daycare fraud by Somalis in Minnesota definitely existed, Shirley's videos probably shouldn't be considered part of it.

> journalists that felt compelled to point out that whilst evidence of daycare fraud by Somalis in Minnesota definitely existed, Shirley's videos probably shouldn't be considered part of it.

I see they pulled out the ol'reliable 'This wasn't "real journalism" so everyone please ignore it!'.

Of course so called journalists in the legacy mainstream media(all owned by billionaires with political connections) would be compelled to say that, because people like Nick SHirley are a threat to their business and their jobs(see recent WA Post layoffs), so their only defence to save face on how this happened under their noses while they failed to report on it, when investigating and reporting stuff like this is their literal job, is to slander those indie journos like Nick SHirley who exposed their incompetence and threaten their multi billion dollar media empire who wishes to retain the monopoly on what's considered "the truth" and what's "real journalism".

The usual cope to this is 'but the "real journalists" already reported once about the fraud six years ago, what more do you want?'. And my answer to that would be Oh, so the fraud was knowingly going on for six years already and the authorities still hadn't done anything about it?! After how many years of ongoing fraud is it just incompetence, complacency and accessory to crime? This isn't even a partisan issue, it's literally your tax money being stolen by scammers while politicians and the mainstream media looked the other way.

The mainstream media was reporting on it 6 years ago. They reported on the 50 convictions too, which people whose information environment is YouTube tend to be unaware of.

Of all the things that threaten the future of mainstream reporting, YouTubers running round Ohio for an hour trying to find people who think Haitians are eatinng the local pets isn't one of them.

He does not in fact call what Shirley did "bad and stupid". He calls him a journalist!

>I start by wandering around the facilities with a camera man

How does one wandering around with a camera affect the fact that the daycares had blacked out or boarded up windows, misspelled signs, and if you went in to ask for enrollment then 3 angry men would come out shouting at you?

Do you even hear yourself? Are they Schrodinger's daycares? Do they become compliant the moment you stop filming them?

Tell you what, go get a camera man and go visit your local daycare center. Post on youtube how they respond.

I predict that they would not spontaneously board up the windows and introduce spelling errors into their signage.

You're beating it around the bush going offtopic and ignoring my question:

How does having a camera impact the daycare having a misspelled sign and boarded up windows?

> You're beating it around the bush going offtopic and ignoring my question:

No I'm not, you just don't like the answer. But at least you've edited to remove the "3 guys yelling at you" portion as I think even you can see how that might be a reasonable thing to do to a creep going around you business filming everything.

> daycare having a misspelled sign and boarded up windows?

The answer to this question is simple, a poor one. And I suspect that a daycare that primarily gets it's funds from people using government welfare likely isn't rolling in the dough. Broken windows are expensive to fix, boards are cheap. A misspelled sign is embarrassing but again could easily be something that the owner of the facilities just wasn't assed to pay to replace and properly fix.

My spouse worked for years in that sort of daycare which is why it's unsurprising to me that a daycare in that state exists. She, for example, did a full summer in Utah without AC while the kids were fed baloney sandwiches every day. Her's wasn't a daycare committing fraud, it was just an owner that was cutting costs at every corner to make sure their own personal wealth wasn't impacted.

A shitty daycare isn't an indicator of fraud. It's an indicator that the state has low regulation standards for daycares. Lots of states have that, and a lot of these places end up staying in operation because states decide that keeping open an F grade daycare is cheap and better for the community vs closing it because it's crap quality. They certainly don't often want to take control of such a business and they know a competently ran one isn't likely to replace it if it is shutdown.

>My spouse worked for years in that sort of daycare

Was your spouse also one of the all-male crews that those totally-not-a-scam MN daycares typically have?

How many legit daycares have you ever seen where the staff is all men? And aggressive men at that. Just think about it for 3 seconds.

Now you are going off topic. I suspect because you don't like a reasonable answer that doesn't fit your fraud narrative.

Men can work at daycares but also we have no clue what those guys relationship to the business was.

Just think about it for 3 seconds.

>Now you are going off topic. [...] Men can work at daycares

No mate, YOU are going offtopic. I never said men CAN'T work daycares, I asked you "How many legit daycares have you ever seen where the staff is ALL-MEN?". This is the n'th time in this thread you misread what I say, to the point I can confidently say you're intentionally doing this in bad faith to derail the conversation, which is why this will be my last reply to you.

> also we have no clue what those guys relationship to the business was.

Except they also interviewed MN citizens who live in the area who also said they never saw any kids or women at that daycare with the misspelled "Learing" sign.

How many more points on the graph that form a line do you need to admit that it's an obvious scam?

>I suspect because you don't like a reasonable answer that doesn't fit your fraud narrative.

I just look at the evidence and use critical thinking to judge. You're the one not bringing any evidence to support your not-a-scam narrative and intentionally misreading my questions to give bad faith offtopic answers.

>Just think about it for 3 seconds.

Parroting someone is flattering but not a sign of good arguing skills.

The volume of prosecution that had occurred or was slated to occur was laughable compared to the amount of fraud known or reasonably believed to have occurred. When it is done at scale, prosecution is inefficient and much less effective than reforming processes so as to preempt fraud, which is not something that happened, as evidenced by the continuing fraud after the initial round of prosecution.

FTA:

> So-called “pay-and-chase”, where we put the burden on the government to disallow payments for violations retrospectively, has been enormously expensive and ineffective. Civil liability bounces off of exists-only-to-defraud LLC. Criminal prosecutions, among the most expensive kinds of intervention the government is capable of doing short of kinetic war, result in only a ~20% reduction in fraudulent behavior. Rearchitecting the process to require prior authorization resulted in an “immediate and permanent” 68% reduction. (I commend to you this research on Medicare fraud regarding dialysis transport. And yes, the team did some interesting work to distinguish fraudulent from legitimate usage of the program. Non-emergency transport for dialysis specifically had exploded in reimbursements—see Figure 1— not because American kidneys suddenly got worse but because fraudsters adversarially targeted an identified weakness in Medicare.)

To put it mildly I don't think there's a consensus among Minnesota DFL-types who paid attention to this that the state at any point took the matter seriously in proportion to its severity. There's a lot of evidence that they did the opposite thing. I try to avoid openly identifying my partisan commitments (see this whole thread for why) but: this shit is what we Democrats constantly dunk on the GOP for doing, and we're not acquitting ourselves well here.

It's annoying that we're talking about this in these terms, because the article is about public services fraud, and it's mostly technical, and it's an interesting subject. We shouldn't have to debate Tim Walz to engage with it.

First: assuming your goal is to stop the fraud, does making deliberately inflammatory YouTube videos get you closer to that goal? I think the government's response clearly shows that they're more interested in the optics of "blue state full of scammer immigrants" than any actual resolution.

Second: I think one of the points Patrick misses is that fraud did indisputably occur, but that doesn't mean we need to treat Shirley as a neutral observer who simply cares about fiscal responsibility. (If I'm wrong, I eagerly away his next video on red state fraud.)

He's not treating Shirley as a neutral observer; he's lamenting Shirley's involvement, which has impeded efforts to clean this up.

> What is the issue? That these investigations should have been more prominently featured in the mainstream news?

Important points throughout the article include: relatively little prosecution or enforcement occurred despite the awareness of rampant fraud; officials were naive to the common wisdom in fraud-prevention circles that people committing fraud in the past correlates strongly with the same individuals committing fraud in the future; "pay-and-chase" policies don't preempt funding flows to individuals suspected of fraud until it's established and feel the need to account for every fraudulent dollar instead of just blacklisting known bad actors the way that actual financial institutions do. FTA in particular, all emphasis FTA:

> For example, the primary evidence of a child attending a day-care was a handwritten sign-in sheet of minimal probative value. Prosecutors referred to them as “almost comical” and “useless.” They were routinely fraudulently filled out by a 17 year old “signing” for dozens of parents sequentially in the same handwriting, excepting cases where they were simply empty.

> To refute this “evidence”, the state forced itself to do weeks of stakeouts, producing hundreds of hours of video recording, after which it laboriously reconstructed exact counts of children seen entering/exiting a facility, compared it with the billing records, and then invoiced the centers only for proven overbilling.

> On general industry knowledge, if you are selected for examination in e.g. your credit card processing account, and your submission of evidence is “Oh yeah, those transactions are ones we customarily paperwork with a 17 year old committing obvious fraud”, your account will be swiftly closed. The financial institution doesn’t have to reach a conclusion about every dollar which has ever flowed through your account. What actual purpose would there be in shutting the barn door after the horse has left? The only interesting question is what you’ll be doing tomorrow, and clearly what you intend to do tomorrow is fraud.

Moving on,

> I don't think the serious response to Nick Shirley's "journalism" is that there was no fraud; rather, it's that he came into the situation with a thinly veiled agenda and fed his audience exactly what they wanted to hear.

My take is that there's no good reason to suspect that, except for holding an opposed thinly veiled agenda. And there is no serious dispute of the fact that billions of dollars of fraud occurred.

> Did his video make it more or less likely that we'll be able to investigate and resolve the fraud situation in MN?

It clearly made it more likely, as demonstrated by federal senate hearings that have extensively referenced the video (I've seen a segment where a senator literally had a prop photo of the "Quality Learing Center").

> the fact that they seized on this as an excuse to send in 3000 ICE agents is not exactly promising.

Your premise is that a YouTube video published Dec 26, 2025 somehow motivated a federal law enforcement action that commenced on Dec 4, 2025. Also, this claim conflates ICE with CBP. Also, per Wikipedia, out of thousands of arrests, only 23 have been of Somalis; and it's been abundantly clear in all the press functions that the targets have overwhelmingly been Hispanic — because they're overwhelmingly represented among illegal immigrants in the US, including in MN.

Look, this is a mostly reasonable, if slightly vague, article about investigating fraud and mechanisms by which you do so.

What it lacks is any concrete suggestion as to what should change, beyond some vague allusions that perhaps racial/ethnic profiling should make a comeback.

The real problem here though is that the entire article ignores the duty[1] the government owes its citizens.

It's "fine"[2] if stripe or visa or whoever flips a coin and if it's tails they decide this person isn't allowed to be a customer of their company. The company loses any profit they might have made and life goes on.

It's considerably more problematic when the government refuses to serve a citizen (or even worse, levies an accusation).

There's some famous quotes about how many innocent people are appropriate to harm in the pursuit of the guilty but I'll leave those up to the reader.

[1] duty feels like too weak of a word here. Obligation? Requirement? The only reason the government even exists is to benefit the citizens.

[2] it becomes rapidly less fine when the company essentially has a monopoly over a system requires to participate in modern life, but that's a different topic...

This article isn't vague at all. It references various sources, and uses precise language (if you can recognize it) to convey its message. Yes, innocent until proven guilty, but the fact that the government has "lesser" educated Fraud analysts, chooses to ask for reimbursement of overbilling, and many more nuanced topics talked about in the article is not vague.

It's very indirect. The message is "the government is soft on fraud, partially because of liberal values", but the author does everything possible to not actually say it.

It references sources that don’t claim what it says they do. Notably the Minnesota report alleging 50% fraud does not say that.

So what is supposed to change based on that? Pay more for better fraud investigators? Accept a lower burden of proof like stripe et al do? What's the take away here?

If you want a TLDR; style take-away, the last paragraph is a good place to start:

>"Responsible actors in civil society have a mandate to aggressively detect and interdict fraud. If they do not, they cede the field to irresponsible demagogues. They will not be careful in their conclusions. They will not be gentle in their proposals. They will not carefully weigh consequences upon the innocent. But they will be telling a truth that the great and the good are not.

The public will believe them, because the public believes its lying eyes."

Ahh, reminds me of the classic appeal.

"If you don't do <fascist thing> now, the real fascists will take over!"

Is auditing state-subsidized service providers fascistic?

From this piece, it seems like the state auditor detected some fraud, but there was little follow-up from either the state or 'responsible journalists', so the sensationalists came in with a (predictably) extreme take, after which everyone started slinging mud. The sensationalism could have been forestalled by better auditing by the state, or journalism by large-scale media. I am not sure what part of this is fascist.

to aggressively detect and interdict fraud

is fascistic, because being aggressive hurts those that want to do it right but are not trusted. an aspect of fascism is to not trust its own people.

Except the article does mention a whole bunch of people who were investigated, arrested and convicted.

So again, now what? Are they supposed to hire more investigators? Work harder? Require less evidence? What part of the system is supposed to change and how?

> [2] it becomes rapidly less fine when the company essentially has a monopoly over a system requires to participate in modern life, but that's a different topic...

That's the real thing here. Concentrated power is scary-- whether it's the federal government, Visa/Mastercard, Google, etc.

At least power concentrated under the control of a government might be held accountable to the people. With private, concentrated power: fat chance.

I'm working on making it a thing, but my theory is that power can't be destroyed, merely transferred, and in most cases I'd rather have the power be vested in a democratic government.

The best option is it being decentralized and diffuse and operating through market mechanisms.

If that leads to bad outcomes, then government is a next best choice.

(Of course, all the special cases, natural monopoly, etc etc etc-- government has a role in addressing the bad outcomes associated with those).

Suppose an asteroid strikes the Earth and all human life becomes extinct. What power, specifically, has been transferred, and to where?

I've called the phenomenon of private corporations refusing service the "Maoists in the Risk Department" in the past.

The reason why risk departments all inevitably reinvent Maoism is because the only effective enforcement mechanism they have is to refuse service. Fraudsters are fundamentally illegible to businesses of this size. And as the article stated, recidivism rates in fraud are high enough that someone caught doing fraud should never be given the time of day ever again. So the easiest strategy is to pick some heuristics that catch recidivist fraudsters and keep them a jealously guarded secret.

This calculus falls apart for the government. If someone rips the government off, they can arrest them, compel the production of documents from every third party they've interacted with, and throw them in jail where they won't be able to rip anyone else off for decades. Obviously, if we gave the Risk Department Maoists these same permissions, we'd be living under tyranny.

Well, more tyranny than we already live under.

But at the same time, the fact that we have these legal powers makes Risk Maoism largely obsolete. We don't need to repeatedly reinvestigate the same people for the same crime "just in case".

My take is that we lack granular punishments.

Right now we have either some form of fine, and while this can be incredibly painful, usually is not, then we go straight to like multiyear prison sentences, with perhaps a few suspended sentences in between there.

I dunno, maybe a world where "you did a small bank fraud so now you have some kind of antifraud system attached to you" is genuinely worse than the one we live in now, but the idea of being able to target more specific aspects of someone rather than just prison/not prison seems interesting.

I guess we have stuff like "not allowed to use a computer for 5 years" (thanks hackers movie!), dunno how effective or practical that is.

The reason that "the left" is rolling eyes at the fuss being made over this fraud is:

1. The fraud is in fact being investigated, people are being charged and convicted. Despite this, rightwing media institutions are acting as if fraud is being ignored and maybe even covered up and encouraged because

2. This is just another example of the decades long project by those who have lots of money and don't want to see it go to takes to paint social programs as a money-pipe from good hardworking people to fraud and waste.

Fair enough. But the reason that "the right" is not letting go of the story is:

1. The fraud was not in fact being investigated seriously enough until this kid, even while lacking the basics of journalism as Patrick describes here, forced the issue.

2. This is just another example of the decades long trend where more and more bad patterns and outcomes can persist for far too long because the normal checks are fended off with spurious accusations of racism.

There's some variation on how "the right" would handle (2). The center-right wants to shore up our culture of color-blindness to patch these vulnerabilities. The far-right wants to do away with egalitarianism altogether, and just go back to plain old racism. If we can't figure out the former, we might well end up with the latter.

(My reading is that Patrick falls squarely in the "center-right" here, fwiw. Then again, it can be hard to decode his exact subtext from under all the polite circumlocutions. Reading his stuff is something of an acquired skill and/or taste.)

> The fraud is in fact being investigated, people are being charged and convicted.

And as explained in TFA, this is inefficient and ineffective even in theory:

> So-called “pay-and-chase”, where we put the burden on the government to disallow payments for violations retrospectively, has been enormously expensive and ineffective. Civil liability bounces off of exists-only-to-defraud LLC. Criminal prosecutions, among the most expensive kinds of intervention the government is capable of doing short of kinetic war, result in only a ~20% reduction in fraudulent behavior. Rearchitecting the process to require prior authorization resulted in an “immediate and permanent” 68% reduction.

> Despite this, rightwing media institutions are acting as if fraud is being ignored and maybe even covered up and encouraged because

Which is a reasonable characterization of the situation given the scale of the fraud and the fact that it's still going on, in such a blatant manner.

We're talking about total fraud on the order of $10b, and some significant fraction of that money has presumably been sent back to Somalia. We're talking here about amounts that would represent a significant percentage of Somalia's entire GDP (https://en.wikipedia.org/wiki/Somalia#Economy).

> This is just another example of the decades long project by those who have lots of money and don't want to see it go to takes to paint social programs as a money-pipe from good hardworking people to fraud and waste.

"The left" clearly has a vested interest in that not happening; therefore, it is also in their interest to take appropriate actions against fraud as they might learn about from the financial industry.

He was able to show all the evidence David had. The evidence had to be leaked out of the government of MN because it was silent whistleblowers that had been turned down after doing internal investigations. The government of MN may be complicit in all of this. It could be that they were trying to be anti-racist, which is why a lot of the fraud is specifically being performed by Somalians. But it can also be pay for vote fraud - where the leaders of the Somalian communities tell everyone who to vote for, and they are doing this because Walz (or some other people) are shielding the daycares from being shut down.

There is literally nothing wrong with stating this, we ought not be political about this. There may also be conservatives being elevated from Fraud as well, all of it should be routed.

At this point it definitely warrants deep investigations, not more articles trying to destroy a 23 year old that went viral.

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Yeah, the fraud’s been around for a while and the Biden DoJ was investigating it. One of the guys got fingered trying to bribe a juror¹ but he stole half the bribe money.

The politicization of the issue means that Democratic Party aligned people continually flag any reference to the scam on HN though. If anyone else said that someone broke in and stole all the records from a daycare days after it was accused of fraud it would be considered a bald-faced lie but because of the political alignment (this is VP candidate Walz’s state) everyone is forced to pretend there’s no scam.

¹ Paradoxically the one honest juror who reported the bribe was removed from the case. No others reported any bribe which obviously must mean they received none.

Rather than stating, without data, that Democratic Party alignment led to flagging of the story here on HN, one can look at the numerous overt statements by some of the most active users. These users claim they spend significant time flagging all political stories not tied to computing or science.

These statements are trivially found using https://hn.algolia.com.

Typing “Trump” into that trivially reveals disparate outcomes. Then again perhaps “Trump says Maduro captured” is computing and science to these people. I have no peer-reviewed evidence that they don’t think that so I must admit it as equally likely as anything else.

It is a common error to misunderstand the base rate of an event. In this case, the frequency of media articles about Trump dwarf other political subjects.

Or one could assume a vast conspiracy to explain the phenomenon.

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I don't recall Brett Favre's scam in MS on HN

Or Rick Scott's Medicare fraud lmao

Trump has pardoned literally dozens of Medicare fraudsters [0] (Lawrence Duran and Philip Esformes are two of the biggest ones, but there are a bunch more smaller ones), and also fired ~20 people who were attempting to investigate Medicare fraud.

I haven't seen any HN articles about this, never mind getting to the HN front page twice a day, so I'll take your retraction and apology now.

[0]: https://tennesseelookout.com/2025/04/02/trump-says-hell-stop...

> I haven't seen any HN articles about this

Okay, now there is one:

https://news.ycombinator.com/item?id=46916593

Maybe you'd want to upvote it?

As the book says, better to light a single candle ...

>so I'll take your retraction and apology now

For what? There's critical anti-Trump articles on HN daily most of them justified.

But not much on Dem crimes.

Are we now required to ignore the majority of trump related crimes just so we can we report an equal number or something?

Isn’t that just a case of “reality has a well-known liberal bias?”

Let's recall some of the things that have happened in the US over the past year:

1. Executive steals congressionally-appropriated money and uses them for their own purposes

2. Presidential pardons are for sale

3. Naked bribery of the executive via ballrooms, crypto, chunks of gold etc

4. Open market manipulation via tariff pump and dump schemes.

5. Endless personal profiteering, including things like using the military to steal foreign assets and deposit them in personal bank accounts.

Any of them far more interesting and immensely consequential to the future of the country, but of course, none of this is to be found on Patio's blog. People like him are an essential pillar of any authoritarian dictatorship - like the mainstream media's endless passive-voice sane-washing of Trumps statements and actions, his job is to use his existing credibility to give credence to lies, half truths and distractions. After reading his blog, readers can rest easy knowing that Trumps actions in MN are perfectly fine and justified.

None of this has anything to do with what he wrote, which is about the largest fraud scheme in the history of the midwest. Fraud is part of BAM's beat.

Choosing what to pay attention to says a lot about who you are and what you think. The largest fraud in the history of the country is unfolding in Washington, there is endless potential BAM content that would be of incredible consequence, but you won't find any mention of anything like that on his blog. Anybody that knows who patio is knows where his bread gets buttered understands very well why he would never say anything on those topics. As it stands this article is the only 'politica' post he has over the last year.

This is essentially gish-gallop or Banon's flood but for an audience that thinks itself sophisticated. As long as you are only focused on discussing the minutia of carefully selected technical materials, you won't have to focus on anything else going on.

No, to all of this. Talking about the largest fraud scheme in the history of the midwest without taking on all of Washington corruption doesn't make you a "gish gallop" or "Banon's flood" (whatever that is). In fact, it's kind of the opposite of a gish gallop. It's a single coherent argument. If you can rebut it, do so.

"the history of the midwest" seems awfully specific and easy to redefine as required.

That being said, it was a fairly interesting article about fraud in general, but if this is the only fraud article he wrote, why is that? There's lots of public frauds going on right now, is he going to write about them next?

Give it any reasonable definition you like, it'll probably still hold! This is extremely not the only fraud article he's written, and if you don't know that, why are you offering any opinions on his site at all? It's fine not to know anything about it! Just don't pretend otherwise and you'll be OK.

https://en.wikipedia.org/wiki/Flood_the_zone

A critical part of media literacy is not just evaluating a piece of work at face value, but considering who wrote it, why they wrote it, why they wrote it now, what they didn't write etc. The article itself is actually not really interesting, but why this person wrote this article now is interesting.

Please speak plainly, and show your work. In your own words, who do you believe "this person" is, and why is that significant? Why do you suppose he wrote "this article", "now", and what is your reason for believing thus? What other articles by the same author are you aware of, and how does that square with the bias you are trying to allege?

Reread my OP, I was pretty clear upfront and it answers all your questions.

I have reread it and I strongly disagree with that assessment.

Notably there's no smoking gun proof for any of the claims, and equivalent stuff on the other side is dismissed as whataboutism. Clinton Foundation? Never heard of that Pokémon.

> To the extent that Bits about Money has an editorial line on that controversy, it is this: if you fish in a pond known to have 50% blue fish, and pull out nine fish, you will appear to be a savant-like catcher of blue fish, and people claiming that it is unlikely you have identified a blue fish will swiftly be made to look like fools. But the interesting bit of the observation is, almost entirely, the base rate of the pond. And I think journalism and civil society should do some genuine soul-searching on how we knew—knew—the state of that pond, but didn’t consider it particularly important or newsworthy until someone started fishing on camera.

Does Patrick want to address the fact that this happened during school break and that Nick Shirley didn't prove much of anything?

No? He dunks on Shirley. His point is that professional investigators found and documented much worse things.

As if: https://news.ycombinator.com/item?id=46916838

What if this article is just the rationalist version of the Nick Shirley hit piece?

Except for the part where when asked for proof he laughed off the idea of using convictions as a measure of accuracy.

The entire story of what happened in Minnesota, as agreed on by basically everybody involved including significant chunks of the government of Minnesota, is that convictions are not a reasonable measure of accuracy here. The story is that they didn't pursue fraud prosecutions in proportion to their severity. Responding to that with "but there weren't convictions" is literally just begging the question.

It's very annoying that I feel like I have to say this but: I'm a committed Democrat, and I feel like my anti-Trump anti-racism bona fides, including on this site, are quite solid. The Minnesota thing happened. We can debate the scale, but it happened.

My ultimate take on the article is "so what?"

Yes, fraud is bad. I agreed before I read the article.

I've learned (from the article) that there was apparently some fraud in Minnesota, some of which was successfully prosecuted and, possibly, some that wasn't.

If pressed, I would say the take away from the article is that the fraud investigators should have been more willing to use race/ethnicity and accept a lower standard of evidence before taking action.

Is there something I'm missing?

That's what I'm getting from this article too. It's giving "Nick Shirley in the style of lots of extra words".

Did you read the actual report? The part about how a single investigator didn't like how some daycares were run, the level of supervision, and then used that to extrapolate a hypothetical invalidation of all payments to those facilities as "fraudulent"?

Democrats have rationalized much worse things than this, for example the ethnic cleansing (genocide) in Gaza. So with all due respect frankly I'm not at all assuaged by your caveat.

For the record, your "anti-racism bona fides" are not in anyway "quite solid". I'm on record for pointing out the shocking racism in the ways you have denigrated Palestinians on this site, for a couple years now! I can link to multiple examples of this, its not hidden and you did not stop (unless you have gone back and deleted the comments, haven't checked yet!), on the contrary you had dang threaten to ban me. Also worth pointing out 1) that the shared the religion of many of these Somalis and Palestinians definitely makes me wonder about your own feelings here 2) the person whose article under discussion, which is very much a white wash of a racist provocateur who is not a "journalist", is one of your own former business partners. You are free to whine to dang again and get me banned now, but I repeat, you are not in any way someone who should get to stand on your "anti-racism bona fides" especially when the people in question are brown muslims. As I posted in my last comment to you, and dang, I approached your racism exactly how you ostensibly would want, I gently encouraged you to reconsider, to examine other sources, etc. Hasn't really seemed to have any effect! You still post genocide propaganda and out and out racism, like "All Palestinians actually should just live in Jordan".

> (unless you have gone back and deleted the comments, haven't checked yet!)

Minor point: I'm pretty sure that HN comments cannot be deleted/edited after about an hour. Very different from most web forums in this regard, and worth keeping in mind when digging into past discussions! Maybe the rules are different for a superuser like tptacek here with lots of karma, but I doubt it.

Correct me if I'm wrong.

Nobody can go back and delete comments the way that person is claiming. What a weird thing for him to have said.

Great article, ties in neatly with observations among many that fraud, grifting, and devolution of the social contract has escalated greatly since 2020.

I don't think anything in the article, or in Patrick's general work, makes strong claims about a trend. Fraud may be getting worse as you say, but that is not his beat. He tends to depict fraud as eternal, and wants to shed light on it as a technical problem to solve.

Also, there are real dangers to blackpilling about fraud. "Everybody is doing it" is exactly what one says before doing fraud oneself. In reality, there are a lot of people out there doing the right thing every day.