USDA suspended $129 million in Minnesota, Minneapolis award payments over fraud allegations

On Friday, January 9, 2026, U.S. Secretary of Agriculture Brooke Rollins announced she was halting disbursement of all current and future USDA award payments to Minnesota and the city of Minneapolis, citing the state's "staggering, wide-reaching fraud scandal." As of that evening, the suspended funding totaled just over $129 million, spanning three areas: nonprofit funding connected to the federally prosecuted Feeding Our Future fraud scheme, the state's Housing Stabilization Services program, and daycare-center operating funds. In a letter posted to social media and addressed to Gov. Tim Walz and Minneapolis Mayor Jacob Frey, Rollins wrote that their "Administrations refuse to provide basic information or take common sense measures to stop fraud," and conditioned continued and future payments on the state supplying documentation justifying all federal spending back to January 20, 2025, within 30 days.

Minnesota Attorney General Keith Ellison responded on the record: "I will not allow you to take from Minnesotans in need. I'll see you in court." A Minneapolis city spokesperson said officials were "communicating with state partners to understand the impacts of such a blanket cut to funding meant for residents most in need," and called the city "the latest target of the Trump administration -- willing to harm Americans in service to its perceived political gain." The suspension reached well beyond the nonprofit funding tied to the Feeding Our Future scheme -- itself the subject of a separate, already-prosecuted federal fraud case -- to housing-stabilization and daycare funding with no documented fraud connection of their own, and landed the same week a federal court separately blocked a related Trump administration freeze on childcare and family-assistance funding to several Democratic-led states, including Minnesota. It also arrived amid the administration's broader public campaign against Minnesota's Somali immigrant community, including President Trump's earlier termination of Somali immigrants' legal protections and public attacks on U.S. Rep. Ilhan Omar.

Updates

2026-01-14 — Federal judge barred USDA from cutting off the suspended funds [3][4]

On January 14, 2026, U.S. District Court Judge Laura Provinzino granted Minnesota a preliminary injunction barring the USDA from cutting off any funds to the state, including the $129 million Rollins had announced on January 9. The injunction was issued in a separate, earlier lawsuit Attorney General Ellison filed December 23, 2025 over USDA's demand that Minnesota re-verify roughly 100,000 SNAP households' eligibility within 30 days; at the January 14 hearing, USDA officials disclosed they had already moved to cut off the state's SNAP administrative funds, and the court's order blocked that action too. "We have won yet another battle in the Trump administration's war on Minnesota," Ellison said.