▶ 0:16:04Small business and entrepreneurship to order. When americans send their tax dollars to washington, they deserve to know the money they worked hard to earn will be carefully safeguarded and responsibly spent. Yet, fraudsters are ripping off $1.4 billion of taxpayer money every single day. That is a lot of money to go missing without anyone noticing.
▶ 0:16:32Like I've always said, if you cannot find waste, fraud, or abuse in washington, there can only be one reason, you were not looking. All around the country folks are now looking and what they are seeing is shocking.
▶ 0:16:48From they can dicker centers in minnesota to phony hospices in los angeles to bogus home care services in ohio, taxpayer dollars intended to care for children, the elderly, and the disabled, are being stolen by serial criminals and fraud tourists. The policing is often occurring in plain sight. There is even flawed influencers shamelessly sharing their scams on social media.
▶ 0:17:18One woman who describes herself as a "con artist" flaunted her pricey purchases and lavish lifestyle on tiktok and instagram, all financed by defrauding the small business administration and federal programs for the unemployed. An sba employee actually advertised and promoted her pyramid scheme on social media.
▶ 0:17:48She recruited accomplices online who were instructed how to submit bogus applications for small business assistance which she then used are insider access to approve in exchange for kickbacks. She got away with it for years, stealing more than 3.5 million dollars from four different programs.
▶ 0:18:13A rapper posted a music video on youtube bragging about he got rich quickly by filing over a million dollars worth of bogus unemployment claims and even flashing the checks in the video. Missing a rap video on youtube is one thing, but bureaucrats handing out benefits are also missing the extensive rap sheets of repeat offenders fraudulently applying for, and receiving, taxpayer money.
▶ 0:18:42More than 1300 companies owned by felons for a given financial support by the sba during a pandemic despite not being eligible for the support due to their criminal histories. Other fraudsters are not quite as blatant but just as obvious, like the quality learing center in minnesota.
▶ 0:19:05If you cannot even spell learning properly, it's a safe bet that not a lot of learning is actually happening there, but a whole lot of fraud might be. The absence of children at the childcare center should have been another dead giveaway. Yet, minnesota gave nearly $10 million to the now closed childcare center.
▶ 0:19:28I'm revealing today that the quality of learing center also received nearly a quarter million dollars from the sba during the pandemic including 221 thousand dollars from the paycheck protection program, and a $10,000 in entry disaster loan. I'm asking the sba office of inspector general to investigate these loans and recover every last cent.
▶ 0:19:55The con artist at the quality learing center are going to lear the hardware that from the longer pays. Cash from ppp was also handed out to other companies with names so outrageous no one could possibly believe they were real, such as satanic lives matter, and others so tasteless I cannot even say them out loud.
▶ 0:20:21Some submitted applications using the names of well-known celebrities and fictional characters, like charlie brown and nancy drew, and yet were still approved. In other cases, the bilking is being done by the very bureaucrats overseeing the benefits.
▶ 0:20:40Over the years, I've documented countless examples of government employees caught with their hands in the cookie jar, embezzling millions of dollars and abusing their positions for personal gain rather than public good. At the department of veterans affairs, for instance, a service representative who have been previously fired from a police department for extorting drivers at traffic stops, again, a police officer who was extorting
▶ 0:21:10Drivers at traffic stops was shaking down disabled veterans for bribes to "grease the wheels" to speed up the approval of languishing claims. This is the actual language, folks.
▶ 0:21:32Here is how a $3385 kickback paid to him via venmo was listed on the memo line. This makes my blood boil. I'm a veteran taking care of disabled veterans is something that we should do. But this is what the veteran submitted through the payment for venmo to this roster. Notice what it says, folks. I will say it out loud, so close your ears if you will be offended.
▶ 0:22:04Crooked shit. I know, it's appalling. It makes my blood boil. Government graft and graft is endless, but the public's patience isn't. So why is it allowed to continue? Civil servants flagging fraud in minnesota's meals program were told to look the other way for years.
▶ 0:22:35A 25-year employee of the state department of education said the abuse was "an open secret" and she would get her "hand slapped by management for bringing it up." as a result, fraudsters were literally allowed to take $250 million from the mouths of children.
▶ 0:22:56Today, we will hear from two longtime civil servants from minnesota who will share their own insight and stories of how the consequences for flagging fraud can be far greater then committing the actual fraud. These taxpayer heroes were bullied by the bureaucracy for doing their jobs too well and daring to call attention to abuses.
▶ 0:23:20While they faced retaliation, hundreds of their colleagues in minnesota's rodney riddle department of human services were rewarded with financial bonuses. We will also hear from an investigative journalist who used medicaid billing information provided by doge to go door to door on the ground in ohio to uncover fraudulent home care service providers that are serving no one other than themselves.
▶ 0:23:49When the daily wire broke this scandal just a few weeks ago, the state immediately pushed back, saying there are "extensive oversight mechanisms in place." that sounded a lot like the response in minnesota where the state insisted the questionable childcare centers exposed by youtuber nick shirley were "operating as expected." folks, that is exactly the problem. It is the grip that just keeps on giving.
▶ 0:24:20If someone cannot see all the red flags waving here, maybe it's because they are the ones -- they are one of the red flags. On an encouraging note, the vice president's task force to eliminate fraud is already protecting taxpayers by stopping payments to hundreds of suspicious service providers and chasing down criminals.
▶ 0:24:44Today's hearing will assist that effort by providing insights from our witnesses into how to spot the warning signs of ripoffs and coverups so that we can put the fraudfluencers and government grifters out of business. I now recognize ranking member markey for his opening statement.
▶ 0:25:14Sen. Markey: Just last month, we work together to pass legislation to give investigators more time to find and verify cases of fraud in sba programs while ensuring enforcement by the department of justice is carried out fairly. We did that together. We passed a bill on the senate floor.
▶ 0:25:39Sen. Markey: But there has been a far larger crime that has been committed against the american taxpayers, and you don't have to be sherlock holmes to figure out this crime. President trump has been engaged in unprecedented corruption and self-dealing since taking office, and yet, the massive, blatant, unprecedented fraud and corruption occurring at the white house is not on the agenda today nor is it on the agenda of
▶ 0:26:11Sen. Markey: Any republican shared committee in the house or senate. The scope and scale of trump's fraud boggles the mind. Since it would take much longer than my five minutes to cover everything that has happened during his second term, I'm just going to stick to the most recent updates. Over the weekend, we learned that during january through march of this year, trump made thousands of stock trades involving major companies that his administration deals with.
▶ 0:26:45Sen. Markey: These traits amounted to at least $220 million and resulted in enormous profits for trump. On monday of this week, we learned of trump settled his lawsuit against his own administration in exchange for a massive slush fund of taxpayer dollars to dole out checks for his maga loyalists including january 6 insurrectionists.
▶ 0:27:13Sen. Markey: Not to compensate the 150 police officers who were injured or died on that day, but to compensate the insurrectionists. That is how upside down this world is. When I went to law school, I was taught like every lawyer in america, that you cannot sue yourself, you cannot settle with yourself, and you cannot pilfer a legitimate victim compensation fund and turn it into a taxpayer-funded payoff scheme.
▶ 0:27:43Sen. Markey: But donald trump thinks that he can grift nearly $1.8 billion from taxpayers without consequences from congressional republicans or from his own department of justice. Congressional republicans are in a witness protection program trump's festival of fraud. They are nowhere to be found.
▶ 0:28:08Sen. Markey: To make matters worse, on tuesday morning, just yesterday, trump's department of justice also agreed in writing to tie its own hands so that the U.S. government cannot go after the shady financial dealings of trump, his children, his cronies, his corporations. And this is, plainly speaking, corruption on stilts.
▶ 0:28:40Sen. Markey: I would just hope republicans in the senate would join with congressman, republican congressman brian fitzpatrick of pennsylvania, who is asking the right questions about this fund. He said we have to figure out the sources of the fund. Is it an appropriation from last year? Where did the money come from? What are the limitations are put around the money? Are there constitutional questions, statutory questions? What falls within article one authority?
▶ 0:29:10Sen. Markey: These are all things we are trying to unpack right now. He said that he is now working to kill trump's 1.8 billion dollars slush fund through legislative and other sources. So I'll be waiting to hear republican speaking up because it is pretty obvious this is just one big slush fund for trump, his children, his cronies. With no guard rails, nothing around it.
▶ 0:29:40Sen. Markey: All of it under the jurisdiction of the united states congress. Now we have an additional feverish effort to hand over another $1 billion in taxpayer funds for the white house ballroom that trump said would cost nothing. That is just one week in trump's circus of corruption.
▶ 0:30:06Sen. Markey: It is clear that he lives by the saying, rules for the and not for me and my family. Trump will continue to use the department of justice to enrich himself and his maga loyalists. It is being reported that he is already considering issuing 250 pardons for the 250th anniversary of america, and if the past is any indication, many of those pardons will go to allies and convicted fraudsters.
▶ 0:30:34Sen. Markey: Trump's pardons for fraudsters have already wiped out more than a billion dollars in restitution and allowed criminals to keep stolen money. I agree, we should be doing more to prevent fraud, especially with this administration which is the grift that keeps on giving. That is fleecing the taxpayer and rewarding his friends with clemency, big contracts, and cash. We should also be focusing on the trump-sized hole in the american people's pockets.
▶ 0:31:04Sen. Markey: We should address rising gas prices, electricity costs, health care premiums, food prices, but instead the instances of fraud that congressional republicans in this administration choose to focus on are solely to score political points, demonizing communities of color and attacking blue states. Last week, trump said he doesn't think about economic pain americans are feeling due to the war in iran, not even a little bit, he said. That is a direct quote.
▶ 0:31:34Sen. Markey: Instead, he is focused on patting the pockets of himself and his family from money from gulf countries and other foreign entities. So let's not fall for trump's art of the steel, the fraud doing by far the most damage to the american people, taking place just down the street by the grifter in chief, donald trump, who is planning his next art of the steel right now. Thank you. I look forward to today.
▶ 0:31:59Chair Ernst: Thank you, ranking member markey. I want to extend a very warm welcome to all of our witnesses today. I'm thankful that you took your time to join us and share your expertise and insight with this committee. I will not introduce our majority witnesses. First, we have Ms. faye bernstein. Ms.
▶ 0:32:27Chair Ernst: Bernstein is a farm girl from castleton, north dakota, who left north dakota to pursue her bachelors and masters degree. Afterward, she earned her jd from hamline university school of law in st. Paul, minnesota before moving into public service. She worked at a mental health treatment center for 10 years, and since 2000 five, has worked for the minnesota department of human services, serving in key contract management and compliance roles. Next, Mr.
▶ 0:32:57Chair Ernst: Jay swanson is a retired criminal investigator for the minnesota department of human services office of inspector general, who oversaw investigations into the minnesota child care assistance program, scap. Prior to donated department come Mr. swanson was a minnesota state trooper for more than 34 years, retiring as captain in 2014. Thank you for your service, Mr. swanson.
▶ 0:33:26Chair Ernst: Both of the civil servants faced intimidation and bullying for fighting fraud. As someone who has learned the hard way that this doesn't make you many friends, I salute you for your integrity and thank you for your courage on behalf of all your wins and taxpayers across the country. We need more folks like you answering the call to public service. Our third witness, Mr.
▶ 0:33:49Chair Ernst: Luke rosiak, is an investigative reporter at the daily wire who has covered waste in the federal government for nearly 20 years. This month, he is using doge data and release news of a billion-dollar fraud scheme in ohio's medicaid reimbursement program. Nearly 100 businesses were listed at the same address, a building he visited and found mostly vacant. Many of these businesses also received sba assistance.
▶ 0:34:22Chair Ernst: Luke is an award-winning journalist who last year won the prestigious prize for excellence in investigative journalism. Fittingly, as the goat of government waste reporting, luke also has two pet goats. Thank you for your time, Mr. rosiak. I now recognize ranking member markey to introduce his witness.
▶ 0:34:44Sen. Markey: Thank you, madam chair. I'm proud to introduce donald sherman, one of our nation's leading expert in government ethics, rule of law, anticorruption policies having served as the key voice for democratic renewal and accountability outside of government and in senior positions in the house and senate, and in the executive branch. He has served as special assistant to the president at the white house.
▶ 0:35:12Sen. Markey: He has served as he no counsel for claire mccaskill in the senate. Before that, he worked as chief of staff and senior counsel for oversight and investigation in the office of general counsel at the U.S. department of housing and urban develop meant. He also served as chief oversight council for the house oversight committee.
▶ 0:35:33Sen. Markey: He began his career on capitol hill as counsel on the nonpartisan staff of the house ethics committee where he investigated alleged ethical violations of members of congress and house employees. He is an honors graduate of georgetown university and earned his juris doctorate from georgetown university law school. Thank you, Mr. sherman.
▶ 0:35:55Chair Ernst: Thank you. Briefly, I will take a moment just to explain the lighting system that is in front of you. There are green, yellow, and red lights. Green means go, yellow means you are running out of time, and red means to go ahead and conclude your remarks. I ask unanimous consent that the witnesses full statements be included into the record. Without objection, so ordered.
▶ 0:36:24Chair Ernst: As a written testimony had been a part of the record, the committee asks that you limit your oral remarks to five minutes. With that, Ms. bernstein, you are recognized for five minutes for your testimony.
▶ 0:36:35Ms. Bernstein: Thank you chair , ernst, ranking member markey, and distinguished members of the committee, thank you for the opportunity to testify today. My name is faye bernstein. I'm a 20-year employee of the minnesota department of human services, and I am a democrat.
▶ 0:36:53Ms. Bernstein: What that means to me is that I wholeheartedly support social service programs, and I'm willing to pay the taxes that are necessary to support those programs. But it also means that I cannot tolerate when there is theft from those programs because I come from a family that needed the support. There is no dignity in poverty.
▶ 0:37:21Ms. Bernstein: I watched the waltons as a child, and the waltons is an absolute lie. That is not what poverty looks like. In my life, poverty looked like going to bed many nights hungry, cold, and scared about the next outburst of violence that was going to happen in my home. And that is why I chose to work for the department of human services 20 years ago.
▶ 0:37:48Ms. Bernstein: But in 2019, I noticed contracting processes that were not acceptable, and I naïvely tried to get these problems are solved because I thought I should. It is not only that I should, state statute does not only permit me to talk about what I was seeing, but it actually requires me to talk about what I was seeing.
▶ 0:38:12Ms. Bernstein: What I saw and what I will describe in a moment our uncontroversial, they are clear-cut violations of law. For instance, conflicts of interest in contracts we were giving out. No guard rails for double billing on contracts. Contracts that were unfairly awarded. Large advances given before work had even begun.
▶ 0:38:41Ms. Bernstein: And money that was awarded with no rhyme or reason as to the dollar amount. So what happened to me when I spoke about these things? I was locked out of the building, down an embarrassingly long hallway with the director in front of me, deputy director behind me, and everyone staring at me. And the silence was so loud.
▶ 0:39:12Ms. Bernstein: I was trespassed from my own workplace. I was a victim of a smear campaign. I was investigated for being, of course, an incompetent employee, but I was investigated for plucking offices, and I was called racist. If anyone has ever been called racist, you will know that that is career suicide.
▶ 0:39:40Ms. Bernstein: It is professionally, and in my case personally, an extremely damaging statement. The environment of retaliation does two things in the workplace.
▶ 0:39:59Ms. Bernstein: Most work stops, legitimate work stops, because the environment is incredibly chaotic and everyone is just try to figure out who is going to be the next target, trying to avoid them being targeted. It also opens the door to fraud. In minnesota, we know that is what happened, the door was thrown open. In minnesota, we have an unknown amount of fraud. We will not know the dollar amount for years.
▶ 0:40:28Ms. Bernstein: But this fraud will impact families like I grew up in, for years and years to come. Our medicaid package, which right now to some that we brag about rightfully, it is expansive, it is fantastic, it serves so many people in so many ways, and it will have to be contracted.
▶ 0:40:53Ms. Bernstein: Whether it is $1 billion or $9 billion, I don't really care about those arguments on the exact dollar amount. To me, fraud is not a dollar, fraud is about real families such as I grew up in. It is not the waltons. It is not norman rockwell. We must all do everything that we can to prevent theft from these programs.
▶ 0:41:24Ms. Bernstein: Thank you.
▶ 0:41:25Chair Ernst: Thank you very much for that testimony. Next we will proceed to Mr. sherman. You are recognized for five minutes.
▶ 0:41:36Mr. Sherman: Chair ernst, senator markey, members of the committee, thank you for the opportunity to testify on the dangers that fraud poses to small business. My name is donald sherman. I am president and ceo of citizens for responsibility and ethics in washington, a nonpartisan organization dedicated to fighting corruption and promoting ethical government. Small business is the lifeblood of the american economy, accounting for nearly 46% of private sector employment.
▶ 0:42:08Mr. Sherman: Unfortunately, the trump administration's corruption continues to harm our economy especially small business. For example, the administration has routinely invoked special powers to award government contracts to president trump's preferred vendors. More than half of the contracts canceled by doge were held by small businesses, but the administration is fighting transparency.
▶ 0:42:35Mr. Sherman: When the president grants access to businesses that pay money to his companies, pacs, and pet projects, big business get a seat at the table that most small businesses cannot afford. Last week, corporate giants like meta, apple, and tesla, who contributed to trump's inauguration ballroom or super pac were part of the white house delegation to china. Yet, small businesses devastated by tariffs, including from china, did not get comparable representation.
▶ 0:43:06Mr. Sherman: Financial crimes like fraud invariably harms small businesses. In 2025, 72% of small businesses were hit by fraud, scams, or ransomware, costing them tens of billions. Small businesses typically have limited resources to invest in antifraud controls like external audits, fraud training, or to plants. Smaller but it's also make financial losses and recovery more difficult.
▶ 0:43:30Mr. Sherman: Recognizing these challenges, sba has historically provided resources for small businesses to identify fraud. Sba's office of inspector general ensures that federal funds designated for small businesses are not exploited, including by investigating those who have the front of the government of millions in kobithen relief funds and small business loans.
▶ 0:43:54Mr. Sherman: The unique vulnerabilities facing small business demand that the government take a holistic approach to fighting fraud. Unfortunately, this administration have been flagrantly unserious about tackling fraud and instead fervently committed to enabling fraudsters that put small business at risk. I want to briefly highlight three such concerns and my testimony today.
▶ 0:44:16Mr. Sherman: One, removal of oversight mechanisms including inspectors general, two, staffing cuts at agencies that combat fraud, and three, pardoning fraudsters with impunity. In his second term, president trump has decimated watchdogs and investigative fraud within the executive branch, firing numerous inspectors general such as sba ig, creating many vacancies that remain unfilled.
▶ 0:44:43Mr. Sherman: The white house has proposed cutting sba oig's budget and also hamstrung funding for the ig communities oversight body. As chair ernst said last year, ig's " serve a vital role in uncovering waste in washington and must be empowered to continue looking out for taxpayers." when ids are under attack, fraudsters wind, and small businesses lose.
▶ 0:45:09Mr. Sherman: The president's gutting of the federal workforce has also severely hindered agencies that combat fraud, like the sba. Of particular concern is the hollowing out of the justice department which lost around 10,000 employees and close over 900 cases of federal programs or procurement fraud in 2025.
▶ 0:45:33Mr. Sherman: In addition to undercutting fraud prevention, the president has enabled fraudsters and wiped out payments owed to fraud victim by pardoning his political allies and donors. In one egregious example, trump pardoned a donor who was convicted of an fraud and investors of millions, and whose company received 4.1 million dollars in ppp small business loans. The part and also prevents fraud victims from accessing restitution.
▶ 0:46:01Mr. Sherman: Another fraudster pardoned by the president illegally withheld 39 million dollars in payroll taxes in his nursing home businesses, harming patients and workers, and left small businesses with unpaid bills. In closing, fraud is a problem not limited to a single state or program, yet the administration's antifraud efforts have targeted disfavored states and programs while enabling politically elected fraudsters who harm small business.
▶ 0:46:32Mr. Sherman: Congress can advance the fight against fraud by adopting a holistic approach including supporting id independence, federal civil servants that investigate fraud, and legislation that prohibits the exchange of donations or pardons. Thank you. I look forward to your questions.
▶ 0:46:47Chair Ernst: Thank you come Mr. sherman. Next we will go to Mr. swanson. You are recognized for five minutes.
▶ 0:46:55Mr. Swanson: Chair ernst, ranking member markey, distant which senators, for five years, I was the manager of recipient and childcare investigations at the minnesota department of human services. My team and I investigated fraud committed by childcare centers receiving payments from the childcare assistance program. Our team of fraud investigators and bca agents had a front row to watch the fraud as it happened and became came face-to-face with people committing it on a regular basis.
▶ 0:47:26Mr. Swanson: Our team of investigators and supervisors were all retired police officers with decades of experience conducting and supervising criminal investigations. The childcare center we investigated were not legitimate businesses but were designed as a vehicle to steal as much money as possible as quickly as possible. We received tips from a wide variety of sources.
▶ 0:47:48Mr. Swanson: One day, we received a phone call from a ccap mother who stated a childcare center owner had stopped paying her the monthly cash kickback that they had agreed upon. Another day we received a call from a fire department inquiring if I childcare center was still operating because they had stopped numerous days to complete a fire safety inspection but there was never any staff or kids there.
▶ 0:48:13Mr. Swanson: I checked and learned the center was listed as open and had built approximately $1 million in the past 12 months. Despite our best efforts, we soon concluded the fraudulent centers were opening faster than we could close them down. Due to the volume of fraud tips, we had to restrict ourselves to only invest to getting centers receiving at least $700,000 a year in annual funding.
▶ 0:48:39Mr. Swanson: In august of 2018, I drafted a document in response to a request from the legislative auditor to provide a summary of the fraud trends in ccap. A senior dhs official became angry when they reviewed in the document and ordered me to delete a number of paragraphs where I described the scope of the fraud, saying this will make us look bad.
▶ 0:49:02Mr. Swanson: I advised of this official that I believed what you're telling me to do is illegal because minnesota law requires state employees to cooperate with the auditor and to provide information upon request. I soon learned that my refusal to hide this information from the auditor anchored a number of high-ranking officials, and within days, the same official told me "you better be ready for the blank storm that is coming your way." within weeks of that incident, do you just signed a $90,000 consulting contract with a firm
▶ 0:49:34Mr. Swanson: That has no experience in evaluating public benefit program integrity, internal control weaknesses in ccap. Whose mission was not to evaluate internal control weaknesses in ccap but to discredit the statements I made regarding the scope of the fraud. During a meeting with the consultants, they told me I have no basis for my claim of $100 million of annual fraud in ccap.
▶ 0:49:59Mr. Swanson: I advised them that they should be careful what they put in their report because if they minimized the fraud, the scale of this became public, their company would lose all credibility. I advised them that the fraud was so massive, one day, it would come to light. In late 2018, 2019, our unit was directed to undergo a continuous improvement plan, cip.
▶ 0:50:23Mr. Swanson: This process began with the lead cip official berating our team for roughly 30 minutes, telling us in essence that we were incompetent and terrible employees. A dhs assistant commissioner was in the room at the time. Over the next six months, we spent so much time in meetings with this official practically no investigative activity was completed. In june 2019, this official dictated the following changes in how our unit would operate.
▶ 0:50:50Mr. Swanson: First, the unit supervisor and I would no longer make the decision on which cases would be investigated. Instead, a committee of three would do this, two of which would be dhs officials with no experience in conducting financial fraud investigations. I would be the third committee member, although I would be clearly uploaded. Next, the amount of ccap funding received by a center would no longer be considered in prioritizing cases.
▶ 0:51:17Mr. Swanson: We were directed to spend 50% of our time on centers receiving small amounts of funding which resulted in 50% fewer hours than we spent invest in getting centers receiving over a million dollars a year. Our team would not be allowed to contact the bca agents working childcare fraud cases unless we received prior approval from a dhs official. The bca agents were advised to vacate their offices in our building where they had worked the past five years.
▶ 0:51:47Mr. Swanson: At this point, advise the team that I was not going to be party to what happened and I submitted my resignation and retired from office. Thank you.
▶ 0:51:56Chair Ernst: Thank you for your testimony. Next, we will go to Mr. rosiak. You are recognized for five minutes.
▶ 0:52:03Mr. Rosiak: Thank you, senator ernst, senator markey, committee members, it's an honor to be here to discuss the daily wire's investigation into medicaid home health waiver programs. In february, the department of health and human services released a database showing which corporations had been paid by medicaid. Medicaid is 15% of the federal budget, but until then, we had no idea where it went. Where there's no transparency, bad things can happen.
▶ 0:52:30Mr. Rosiak: Medicaid originally granted states waivers for in-home health care on the theory that sending nurses to people's houses was cheaper than a nursing home. Then the federal government permitted some states to have waivers adding what's called personal services, meaning not just nurses but people without a medical license to our four so-called chores like cooking and cleaning in private residences.
▶ 0:52:54Mr. Rosiak: Many of these aides are actually the family members of the people receiving services, and they can even bill for tasks like “conversation & companionship.” so in some cases, people are billing medicaid to hang out with her own family members at home, who are in some cases doing things, if the family member is sick, they would do anyway, as most of us would do for our family members for free.
▶ 0:53:22Mr. Rosiak: This program is highly susceptible to fraud because the government is paying invoices or things that happened between family members inside private residences. It is a mother going to tattle on her son for not vacuuming the carpet even though he billed medicaid for it? In other cases, a personal services able have multiple clients, not just their relatives. That is vulnerable to kickback schemes. These are people who may be just get a cut of what the provider is getting paid for by medicaid.
▶ 0:53:50Mr. Rosiak: Perhaps most importantly, there are people who are not actually very sick at all who find ways to get a doctor to sign off. The doctors are in on this scheme. I'd be interested to see a list of the doctors who have approved the most home health care authorizations. We have heard of pill mills. There are also paper mills, doctors who signed forms. Ohio's medicaid alone spends a billion dollars a year on home health care.
▶ 0:54:14Mr. Rosiak: More money was spent on personal services, not the nurses, but the regular people than any medical billing code , for which data is available. Including actual expense of medical stuff. So we go see the scale of how much this program has grown. The data in ohio shows extreme abnormalities. 15% of all home health care in the state of ohio, a pretty big state, occurs in a four-square-mile area in northeast columbus.
▶ 0:54:41Mr. Rosiak: When you drive down the street there, it seems like most businesses have closed down and then replaced by these medicare home health businesses. These are the middlemen that have the npi number two billed medicaid, and then they paid people who are at home with their families, while keeping a cut. Some of these companies based , out of tiny, empty offices in run-down strip malls, bill the government as much as $1 million a month.
▶ 0:55:10Mr. Rosiak: I first noticed that something was odd, actually, because of sba loans. Many of the people running these companies weren't people who had assumed, people dedicated to their careers, what they cared about. They actually have numerous different businesses in different industries. They might get an sba loan for a business such as a grocery store, default on the loan, open another business like trucking and get ppp loans, and then be running this medicaid business on the side.
▶ 0:55:40Mr. Rosiak: It is like a $1 million a year side hustle. One of these buildings in columbus had 94 medicaid companies that billed more than $66 million over the last few years. One landlord owned seven other buildings on the same street that have 300 medicaid companies billing more than a quarter billion dollars. That is just one landlord's tenets. When I went to the buildings, almost all the offices were empty. They had signs saying employees had stepped out to lunch, even if it was early in the morning or late in the afternoon.
▶ 0:56:10Mr. Rosiak: There was often times piles of mail at the bottom of the door showing they had not been there in months. Because of the new hhs dataset, the public could, for the first time, do basic research on who was behind these little storefronts that previously you might not have thought twice about. It didn't seem like anyone from the government had ever looked into these owners. When I looked them up, one of them, for example true home , healthcare llc, is owned by alieu conteh and his wife mamusu kanu.
▶ 0:56:39Mr. Rosiak: Conteh is a career criminal with numerous convictions for fraud and offenses like child endangerment. I talked to him. Conteh told me he was quote, “just too dumb to know what is law.” his wife was convicted of theft three times in three years. After she was arrested for felony malicious wounding in virginia, they went to ohio specifically to get into the medicaid business.
▶ 0:57:04Mr. Rosiak: The nursing board permanently barred the husband from working as a nurse in home health or because of his criminal record but medicaid authorized him to start his own business doing exactly that. When I asked him about this, he threatened my family. Another company, a janitor who renamed her company to be mental health, and then build $1000 in the first month.
▶ 0:57:31Mr. Rosiak: The original justification to save money compared to nursing homes doesn't hold water because in many of these communities, many people have worked with doctors to claim they are sick, and now when asked about why he robbed banks, because that is where the money is. In new york state, home health care aide is now the most common job in the state. I think it's a great time for congress to reevaluate how sick the people are and how to potentially reform these programs define fraud involving doctors and others. Thank you.
▶ 0:58:00Chair Ernst: Thank you very much for the testimony today. We will start our question and answer session. I will defer my questions until the end of all of our republican members. We will go ahead and start with senator john houston. Appreciate all of you being here today, doing some courageous work rooting out fraud in your states.
▶ 0:58:34Chair Ernst: The state in which I live. I thank you for that. This reminds me, madam chair, of a floor debate I heard one time in the legislature, where one individual implored her potty not to vote for -- party not to vote for a bill because it was full of their poor, not our pork. Eating sometimes we think fraud is bad when it is the other team's problem, but not when it is our problem. Well, it is all bad.
▶ 0:59:04Chair Ernst: It is all bad because it is stealing from the taxpayers and undermining the very programs that are designed to help those in need. That is why it's bad for everyone. I will tell you, as I listen to these conversations, Mr. rosiak, I love the fact that you got the data on medicaid.
▶ 0:59:27Chair Ernst: It was a product that I worked on in ohio called data.ohio.gov to put all of this information out there so that enterprising people like you could help to look through the data and sort through these things and make government more efficient. It is very rewarding to me to see that you used that tool for the research that you did. But I want you to explain how the fraud happens, exactly how they structure it.
▶ 0:59:59Chair Ernst: This is a scam across the country. People are learning how to do it, and then they are moving to states and then employing these tactics. Explain precisely how the fraud works and how you think we can fix it.
▶ 1:00:12Mr. Rosiak: Sure. It's a great question. There are organize groups, these middlemen companies that will knock on doors until they find people that have somebody who they think might qualify, a five-year-old mother-in-law that lives with them. They will tell that person to go to a particular doctor.
▶ 1:00:29Sen. Husted: Multi gene
▶ 1:00:35Sen. Husted: Multi g generational families already living together.
▶ 1:00:37Mr. Rosiak: They will tell them to go to a doctor, what symptoms to claim, and then the family members split the cost. Oftentimes, let's say the older generation, they are not actually being --
▶ 1:00:49Sen. Husted: The medicare provider gets part of the cut and the family member gets part of the cut if they all participate in the scheme.
▶ 1:00:55Mr. Rosiak: They have a certain number of hours per day. It might be $28. But if you are working 16-hour days, that adds up. Oftentimes, the older generation that is reportedly receiving care, there often the matriarchs of the family, the one doing all the cooking and cleaning. It is people who are not sick, don't need the hours, and it is just a small hourly wage at massive scale. Half the people in certain communities are on this program.
▶ 1:01:22Sen. Husted: So what is the solution? You could eliminate the services. I understand the case that people make. If it is actually a sick individual, the cost of long-term care is greater than the cost of this, so this is why the program is created. But it is now being abused. Other than eliminating it, is there any other way to crack down on the fraud?
▶ 1:01:45Mr. Rosiak: I think you have to look at who is at the top of this pyramid scheme, which is the doctors. This might seem, maybe there is bipartisan agreement on this, maybe the democrats would agree to bring some of this in house and make more government doctors in charge of authorizing these.
▶ 1:02:03Mr. Rosiak: I'm pretty concerned with congress delegated its power of the purse to private doctors because what you can do is doctor shop and find a doctor who is either just very lenient because they don't care, it doesn't cost them anything to sign the form, or is in on it taking kickbacks. If you look at the way the department of veteran affairs works, the veteran has to go to a government doctor to get that initial disability determination. That ensure the same criteria as applied to everyone across the board.
▶ 1:02:30Mr. Rosiak: If it is good enough for a veteran, it is good enough for a person on medicaid.
▶ 1:02:35Sen. Husted: In addition to that, what we are also seeing, e-verification tools, other things like that can be helpful but you still have to go after the root of the problem. The state to receive most of that money from the federal government sometimes don't have much of a financial incentive to crack down on it. Is that correct?
▶ 1:03:03Mr. Rosiak: Exactly right. It's a matter of incentives. The people on medicaid don't have an incentive not to sign up for these services because it doesn't cost them anything. The states don't have too much incentive to waste if it is wasted because 70% comes from the fed. The examples of criminals running these abound, red flags that don't reach criminal threshold are even longer.
▶ 1:03:25Mr. Rosiak: It would take a long time to put all of these people in jail, so you're on the right track, coupling policy reforms with that.
▶ 1:03:34Sen. Husted: I would just finish with this. In the working family tax-cut plan, we put provisions in there that said you have to do more frequent medicaid checks. Why? Because there are millions of people who were illegally on the roles who shouldn't be there because of lax federal standards in eligibility.
▶ 1:04:01Sen. Husted: Across the board, just upping the eligibility checks like we did in the working billing tax plan. Yes, more must be done, and we shouldn't tolerate it anywhere. It is a fraud that rips off from the taxpayers and jeopardizes the programs for people who are truly in need. I thank all of you for your work to try to root out the fraud. Thank you.
▶ 1:04:24Chair Ernst: Thank you, senator husted. Next, ranking member mark e.
▶ 1:04:29Sen. Markey: Mr. sherman, you noted in your testimony, it was concerning that today's hearing ignores the dismantling of federal oversight and fraud prevention, and the massive correction taking place right down the street.
▶ 1:04:48Sen. Markey: The federal judge overseeing trump's $10 billion lawsuit had actually been considering dismissing the case over concerns of collusion. Irs lawyers recommended to the justice department that the case be dismissed, not settled.
▶ 1:05:11Sen. Markey: The treasury department's top lawyer, brian morrissey, a trump appointee, resigned after the slush fund was announced on monday. Just today, two capitol hill police officers, harry dunn and daniel hodges, who defended the capital on january 6 -- thank you, officers -- filed suit against trump to dismiss the fund. Here is what their suit says.
▶ 1:05:40Sen. Markey: It correctly points out that the president's slush fund would endanger their and other police officers lives by encouraging violence and financing rioters under the assumption that they would be subsequently compensated by donald trump's slush fund. The president simply cannot go around the constitution to finance his henchmen and political machine by taking money from the american people. Mr.
▶ 1:06:06Sen. Markey: Sherman, what does the establishment of an almost $1.8 billion slush fund to reward political allies mean for the presidency and preventing corruption in politics in the government?
▶ 1:06:19Mr. Sherman: Thank you for the question, senator. The president's slush fund is unprecedented and a stunning example of correction. -- corruption. Particularly as everyday americans are struggling with groceries, small businesses are struggling to make ends meet.
▶ 1:06:41Mr. Sherman: The president is demonstrating that his priority is enabling individuals who engage in illegal activity to overturn an election, and as you said, this is not just an example of grift, but it is an example of grift that will enable political violence in the future.
▶ 1:07:02Sen. Markey: Thank you. In your testimony, I just want to highlight this for the committee. You noted in trump's second term alone, his pardons and commutation to conflicted rosters have wiped out over five -- 1.5 billion dollars in restitution's, fines, forfeitures, money, otherwise owed to fraud victims and american citizens. Many of these fraudsters have donated directly to trump and republican candidates.
▶ 1:07:31Sen. Markey: One year ago, trump computed the sentence of a florida health care executive convicted of the largest therapy related medicare fraud in history, stealing $205 million. It is now being reported to the president is considering issuing 250 pardons for the 250th anniversary of america and we should expect them to be doled out as favors to wealthy donors and political allies and to fraudsters who are friends with the president.
▶ 1:08:01Sen. Markey: Mr. sherman, when a president commutes a sentence or issues a part in that ends restitution obligations, what happens to those victims? Is there any way to recover what they are owed?
▶ 1:08:12Mr. Sherman: It is noteworthy that even if the president wanted to pardon these fraudsters, he didn't have to go so far as to allow these fraudsters to escape paying restitution. He went the extra mile for his political allies to the detriment of fraud victims across this country.
▶ 1:08:36Mr. Sherman: He enables fraud and sends a clear signal that, if you are engaged in fraud, you can get away with it, if you are rich enough to carry influence with the president.
▶ 1:08:45Sen. Markey: So you are saying that he could have just pardoned him and said you still have to pay the restitution. Instead he says I pardon you, and you don't have to pay back the people that you defrauded. That is coming out of the white house.
▶ 1:08:57Mr. Sherman: That's exactly right. It makes everyday americans, small businesses more vulnerable to fraud, because the president demonstrates time and again, he is willing to enable it.
▶ 1:09:09Sen. Markey: In your legal judgment, is that a legitimate exercise of executive power or something else?
▶ 1:09:15Mr. Sherman: It is an illegitimate use of power.
▶ 1:09:21Sen. Markey: Even in this fund that he has created, there will be a five-person oversight board, but every one of them can be removed by trump without cause. [laughter] there is no oversight over this fund, and it is all coming out of taxpayer dollars appropriated by the way by congress. We appropriate the money that goes into this fund. I'm waiting for those oversight hearings.
▶ 1:09:49Mr. Sherman: As am I.
▶ 1:09:51Sen. Markey: Are there any standards, constraints, restrictions -- by the way, it is an unlimited phone that can be dispensed. Now we are learning that there are no Mr. trump than what the justice department can put as the standards they are using to dispense this money. An invitation to fraud that donald trump is absolutely going to except with the greatest of joy. Thank you.
▶ 1:10:19Chair Ernst: I now recognize myself for five minutes of questions. Ms. bernstein, according to your testimony come in early 2019, while you were serving as the minnesota department of human services contract specialist, you raised concerns about risky contracting practices that would leave the department open to double dipping.
▶ 1:10:44Chair Ernst: Could you give us an example of this double dipping risk to the state, explain what kind of response you receive from your department had when you raised this potential issue?
▶ 1:10:57Ms. Bernstein: Thank you, chair. This was a group of contracts that I really thought about. I think it was important. It was a group totaling about $12 million settlement and it was for pregnant and parenting women who were addicted. That is a very important service.
▶ 1:11:17Chair Ernst: Ms. bernstein: Ms.
▶ 1:11:20Bernstein: Agreed. However, we had just put that in our medicaid package, so it wasn't billable to insurance. There was no reason we should be giving great dollars for it. Not only was there no reason for us to do it, but there was also no way for us to tell if the agency that we gave it to billed twice, the double dipping. There was no way for us to see that.
▶ 1:11:51Bernstein: I have thought about this one for probably about three or four months before it was finally assigned to a probationary employee, brand-new employee who did the contracts. Oddly enough, was promoted into my job when I was removed. The response I got from leadership was anywhere from, I don't understand what the problem is. We have always done this, faye.
▶ 1:12:20Bernstein: To just a complete dismissal, to try to get me to stop talking about it. And this again is one of those very uncontroversial, cut and dry situations. I do not know how someone can logically disagree with me.
▶ 1:12:39Chair Ernst: Are you aware of anyone else that was reprimanded, had any other personal action taken against them in this similar situation?
▶ 1:12:50Ms. Bernstein: Yes, it was very common for employees to be stifled, was the bar that was used against me, that I needed to be stifled. There were many efforts to do that. It worked in a lot of cases. There is much less public speaking now.
▶ 1:13:14Ms. Bernstein: There is a large group of anonymous tweeters who do communicate on this, but they are very rare instances where someone will come forward publicly.
▶ 1:13:23Chair Ernst: Just to reiterate, you were removed out of that equation because you question those contracts, but someone with much less experience than was given those contracts, didn't question it, and then was later promoted into your position.
▶ 1:13:42Ms. Bernstein: Correct.
▶ 1:13:43Chair Ernst: Just wanted to make sure I heard you correctly there. Mr. swanson, by now, everyone has heard of minnesota's infamous learing center, quality learing center. You were on the ground serving as a criminal investigator for minnesota's childcare assistance program and you were uncovering many of those similar fraud schemes.
▶ 1:14:07Chair Ernst: Can you briefly explain to us the kickback system that fraudsters use to enroll children at these childcare centers?
▶ 1:14:17Mr. Swanson: Madam chair, yes, in minnesota, other states have a program like this. The childcare centers can only bill for when their parents are on public assistance and the parents have to be engaged in either education or work related activity that would necessitate the need for child care.
▶ 1:14:45Mr. Swanson: What we saw time after time was that the fraudulent childcare centers would go around to immigrant communities and they would offer kickbacks to these mothers if they would tell their caseworker that I child is going to be going to this particular childcare center for five or six or seven days a week. Essentially, what they would do is tell the mothers, we don't want you to bring the kids to our childcare center.
▶ 1:15:14Mr. Swanson: You take care of your kids at home but we will pay you -- it started out with $200 a month per child. It went up to about $300 a month by the time I left. I saw a mother -- so another five children would be taking a $1000 a month.
▶ 1:15:33Mr. Swanson: To fulfill the education or work requirement, the childcare center would falsify employment documents so the mothers could take those to their caseworker and show them they were working at the childcare center.
▶ 1:15:48Chair Ernst: Mr. swanson, if you look at the front of the quality learning center right below the sign and above the entrance to the building, there is a video camera and a sign that states the premises are under 24 hour surveillance. So this sign right here. Are all childcare centers required have security cameras?
▶ 1:16:13Mr. Swanson: No, they are not.
▶ 1:16:16Chair Ernst: Do you think those videos would be archived so investigators could access them if they did have surveillance cameras like this one?
▶ 1:16:24Mr. Swanson: There were a few centers we investigated that had video cameras that were archived. We had staff in our digital forensics unit that were able to retrieve the footage, but in minnesota, no childcare center was required to have any sort of video surveillance system.
▶ 1:16:49Chair Ernst: Very interesting. As investigators, if you had availability to cameras, you would be able to go back and view that, correct?
▶ 1:17:03Mr. Swanson: That is correct.
▶ 1:17:04Chair Ernst: So right here at the learing center, do you think we would be able to give videotape and see if there were children coming and going?
▶ 1:17:15Mr. Swanson: If their system was set up and designed, you know, so we could retrieve the video archives from you could.
▶ 1:17:24Chair Ernst: Thank you very much. It is interesting we did not have children coming and going from that learing center even though there is video surveillance. My time has expired. We will go next to senator hawley.
▶ 1:17:40Sen. Hawley: Thank you very much. Thank you to the witnesses for being here. Ms. bernstein, you worked in the minnesota department of human services for 20 years or more? At the agency, he served in rules related to contract management and compliance? Several years ago, looking at your written testimony you say you started to notice some inconsistencies in contract that came across your desk.
▶ 1:18:08Sen. Hawley: Can you describe what those inconsistencies or irregularities were, what they look like?
▶ 1:18:13Ms. Bernstein: It was anything from obvious conflicts of interest to large advances being given. If the contract was for $3 million or $4 million, we were giving $1 million advances before any work had occurred. That is a very risky thing to do. A business can just close up and they have more money and they have not done a thing for you. There was --.
▶ 1:18:42Sen. Hawley: To whom were these advances going? What kind of entities are we talking about?
▶ 1:18:48Ms. Bernstein: States do not in general do their own social services. They do not do services for the residents of their state. They contract out that work to most often nonprofits convocation profits. Most often, nonprofits. And so's those art prints -- so those are considered grant contracts. Those contracts are well regulated and well defined in statute and we were doing many things.
▶ 1:19:20Ms. Bernstein: That were not compliant with statute. There would be a contract with a dollar amount that had no formula, nothing that I could find that would establish why that dollar amount was.
▶ 1:19:32Sen. Hawley: Could you detect a pattern in these inconsistencies?
▶ 1:19:37Ms. Bernstein: In general, no. But I did notice a slight preference for our tribes, our tribes were one situation where I saw contracts that no one could explain to me why they were the dollar amount they were.
▶ 1:19:58Sen. Hawley: What happen when you reported these inconsistencies to your superiors?
▶ 1:20:03Ms. Bernstein: I was called racist. And I was walked out. There was quite a smear campaign. I was investigated. I have about 400 pages of investigatory information about me.
▶ 1:20:23Sen. Hawley: You worked there for 20 years. You have a long track record as a civil servant. You bring it to the attention of your supervisors and it sounds like you are retaliated against. Is that fair to say?
▶ 1:20:37Ms. Bernstein: Absolutely.
▶ 1:20:41Sen. Hawley: How long can this go on?
▶ 1:20:42Ms. Bernstein: It still goes on. It started for me seven years ago but I'm still just shopper -- shuffled from one job to another. Your ago a supervisor said, well, we have to find something else to do. I have nine years of college and I put black marks on documents for media requests.
▶ 1:21:02Sen. Hawley: Do you think a lot of the revelations of widespread fraud and abuse in the state that maybe there is a systemic problem in state government that you exposed in part but probably extends far beyond you? Is that fair to say?
▶ 1:21:17Ms. Bernstein: There absolutely is. I now realize it was long before me.
▶ 1:21:23Sen. Hawley: Are you familiar with the case of keith ellison?
▶ 1:21:26Ms. Bernstein: Yes.
▶ 1:21:30Sen. Hawley: He testified under oath before a committee of this body not long ago and insisted to me he had never done anything wrong and did not know anything about any of the fraud and abuse. The only problem is, there are records, tape recordings of various fraudsters coming to see him associated with the scandals the chairman was just talking about a moment ago. Coming to see him complaining about people -- I think in your department. The fraudsters were saying, we are getting pushed back. Who knows, maybe it was you.
▶ 1:21:59Sen. Hawley: We are getting investigated, can you do something about it? Allison said, I'll see what I can do. They offered him campaign contributions and he took them. Unbelievably. We know this is true because he recorded it all. The whole thing is on tape. I can't think of a greater instance of abuse of public trust -- if you own attorney general is doing it, who knows how deep, far, why this fraud goes. I don't understand.
▶ 1:22:29Sen. Hawley: I want to applaud you for doing your job. I think it is absolutely shameful that you have been retaliated against and treated like sky when you are 20-year civil servant, proud minnesota and just doing your job. I don't know what your politics are. It doesn't matter. Meanwhile, people like ellison are vetted and lauded and he is a star at the party. It is unbelievable. He is a crook. It is exceptional.
▶ 1:22:59Sen. Hawley: We need more people like you who are doing their jobs and are fighting for the public and fighting for what is right and true and just. I want to thank you for coming forward.
▶ 1:23:09Chair Ernst: Now we will go back to ranking member markey. You are recognized. All right. Well, I have a few more questions. We want to thank our witnesses for being here today. Mr. swanson, I am just going to continue with some of the work that you have done.
▶ 1:23:31Chair Ernst: And your testimony, described preparing a report for the minnesota inspector general citing approximately $100 million or more in minnesota's care assistance program fraud. I hear your report was not warmly welcomed by your superiors. So would you share with the committee what happened after that?
▶ 1:23:56Chair Ernst: You touched upon it in your opening remarks but if you could just do a deep dive for us and understand when you raise concerns as an investigator, how is that received?
▶ 1:24:10Mr. Swanson: Madam chair, yes, the document I wrote was an answer to our request from the office of legislative auditor asking for a summary of fraud trends I saw. I prepared it and as soon I gave it to some higher officials in minnesota, the first official that received it became very angry and said, you can't send this.
▶ 1:24:39Mr. Swanson: This is going to make us look bad. I think my response was, we are losing over $100 billion a year just in this program alone. I think we probably deserve to look bad. And they demanded I redact the most damaging paragraphs from that document. And that is when I told them, I think what you're telling me to do is illegal. Under minnesota law, we have to cooperate with the legislative auditor.
▶ 1:25:10Mr. Swanson: A few days later, that official came back to my office and told me that your document is being transmitted to the legislative auditor but you better be ready for the storm that is coming. From that point on, our entire unit was harassed and nullified for what I put in that document.
▶ 1:25:38Mr. Swanson: Again, the continuous improvement project started with an entire -- our entire team, a head official and an assistant commissioner at the department of human services. And for approximately 30 minutes, we were verbally beat down, in essence, told we were incompetent and we were worthless employees.
▶ 1:26:08Mr. Swanson: And because of that, they were going to do a close look at how our unit operated and it would attempt to fix our unit. So we spent literally the next six months of meetings with this official where he would ask us questions repeatedly about how the investigative process worked. Then he would give us "homework assignments" that would take up a whole bunch of our time between the meetings and we would have to report back.
▶ 1:26:40Mr. Swanson: This went on for six months until june 2019. He came out with the changes that were going to be made to the system starting with the lead investigator, the supervisor of this unit and I, who between us we had 70 years of trouble investigative experience. We would no longer be making the decision what childcare centers would be investigated.
▶ 1:27:09Mr. Swanson: That would be done by a committee of three, two with no experience in this area and then myself. The second thing he directed was we would be focusing 50% of our time on childcare centers receiving very little funding, which meant we would be spending 50% less time on centers that received $1 million or more a year in funding.
▶ 1:27:41Mr. Swanson: Frankly, the cases we were choosing because we couldn't investigate all of the cases, we focus on the high dollar cases. We were fighting fraud and left with centers that were paying over $1 million a year to -- that we were paying over $1 million a year to. We could not fathom why someone would take 50% of our time away from that and focus on providers receiving less.
▶ 1:28:05Chair Ernst: Right. It is a real problem. As many of you stated or insinuated that any dollar taken away from valuable programs is a real problem for those families that expect to receive those services and those dollars. Thank you for the testimony. Mr. rosiak, does least data that allows anyone to follow the money. Anyone to follow the money.
▶ 1:28:35Chair Ernst: You followed it to what appeared to be a one billion other year medicaid fred -- fraud scheme and clubs, ohio. How hard was it for you to go out there and find what would be fishy looking buildings or something that did not seem right? Was it really difficult and it took you a lot of time to find these fraudsters?
▶ 1:29:01Mr. Rosiak: It was quite easy. Once the data is there, it is basic coding. What is remarkable is none of the other government bureaucrats have done it. Naturally doesn't have -- found things that government bureaucrats maybe weren't allowed to go see by their superiors or whatever reason they were never inspecting it. I think these agencies are collecting the data but never using it.
▶ 1:29:31Mr. Rosiak: Apparently have to actually get permission from hhs to mind your own data as a state, is crazy. Not all states have asked permission for that. So they are just recording who they are paying out to but never looking into it. You have pay and chase model but they are not even chasing it. You want to stop that money going out on the front and I also want to acknowledge as powerful as powerful estate is, fraudsters live. After due on these ground -- you have to do on the ground visits.
▶ 1:29:58Chair Ernst: Very good. I do want to thank everybody for coming out today. Ranking member markey, thank you very much, for participation today as well. I think we can acknowledge that our federal government has many good solid programs.
▶ 1:30:20Chair Ernst: Miss bernstein, I want to thank you for sharing your personal story as well because it shows how important these dollars are for the right usage in these programs. And many of them truly believed in these programs. We want to make sure those dollars are going for the right use within the programs. And if they are not, and we need to hold those folks accountable. I really do appreciate the discussion today.
▶ 1:30:48Chair Ernst: We appreciate the entire panel coming out and sharing their experiences. I will ask that unanimous consent that today's hearing for the record of today's hearing remain open for two weeks for members to submit questions. Revise and extend the remarks and submit additional information into the record. Without objection, so ordered.
▶ 1:31:14Chair Ernst: Further, I ask unanimous consent to enter into the record first a letter from my office dated may 20, 2026 requesting the sba office of inspector general thoroughly investigate the 28 companies cited in Mr. Mr.
▶ 1:31:30Rosiak: 's investigation that received liens of dollars -- millions of dollars in assistance. And second an article in the wall street journal titled "the covid talent agent bailout" authored by judge glock which documents many of the loopholes that led to fraud, waste, and abuse within the sba shuttered venue grant program.
▶ 1:31:54Rosiak: And lastly, an article in the minnesota star tribune titled "an open secret: new records reveal officials failed to act on fraud warnings showing how minnesota public servants flagged indications of fraud in the largest pandemic relief case ever that officials chose to look the other way." without objection, so ordered. With that, thank you all so much for your participation today.
▶ 1:32:23Rosiak: With that, the committee on small business and entrepreneurship stance adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]