What Minnesota reveals about the future of fraud prevention

A long-simmering fraud scandal in Minnesota boiled over recently, leading to political turmoil, increased federal scrutiny, and an intense debate about who is to blame. 

What happened should surprise no one. For years, people inside and outside the government saw the warning signs, raised concerns, and tried to force change. Too often, they were pushing a boulder uphill. Systems stayed the same, incentives were misaligned, accountability was scattered, and meaningful reform stalled. 

In that environment, early fraud signals were easy to dismiss and hard to act on. When small failures go unaddressed, they stack. What could have been corrected early became embedded, expensive, and public. 

Here’s the reality: Minnesota is not an anomaly — what’s happening there is also happening in almost every other state. Fraud is not a “blue state” or “red state” problem. Today, fraudsters, including nation-states and organized criminal networks, systematically attack government programs. 

Modern fraud relies on fragmentation, not sophistication. Disconnected programs, slow decision cycles, and the diffusion of accountability create space for abuse to scale quietly and quickly. The Government Accountability Office puts annual fraud losses at hundreds of billions of dollars, with no clear ceiling in sight. The lesson is simple: when risk moves faster than action, fraud wins.

Now, state leaders will need to address how they are working to prevent fraud, what systems they have in place, and how they are keeping up with increasingly sophisticated fraudsters. The time for little action, or even worse, half-measures, is over. 

A New Fraud Playbook 

Public sector fraud often boils down to the same underlying issue: the inability to accurately verify that someone is who they claim to be online and their eligibility for the service in question.

Today’s fraudsters are not acting alone. They are organized, coordinated and operating at scale. These are criminal networks that study how our systems work, exploit weak identity checks, like knowledge-based questions and static data, and move quickly across states and programs before anyone notices. Fragmented identity infrastructure gives them room to operate. AI has only widened that gap, turning impersonation into an industrial process and fraud into a repeatable business model.

The fraud playbook has changed, and yet, government agencies have been slow to adapt. This is often because of inflexible bureaucracy, fragmented ownership, and an overreliance on legacy systems never designed to confront modern, large-scale fraud in the first place.

Fraud Prevention Starts with Stronger Digital Identity 

As our world has become more digital, so have our government services. Government agencies have embraced a digital-first approach to service delivery, reducing the need to show up in-person to apply for assistance. 

At the same time, fraudsters have evolved. Data breaches reveal personally identifiable information that can be used to fool knowledge-based verification questions. AI has lowered the barrier to entry for fraud, making it easier to create fraudulent documents, stitch together synthetic identities, and hit programs at scale. In some cases, once a fraudulent identity is in a system, it can be used across state lines and within multiple programs before anyone even realizes what is happening. 

The good news is that states are not powerless — and they are not limited to the tools of the past. 

First, modern identity and fraud prevention shift agencies from static checks to real-time risk assessment. Instead of asking if someone passed a test once, these systems evaluate identity in context, continuously and dynamically. They detect manipulation, reuse and emerging fraud patterns as they happen, while staying invisible to legitimate applicants who need fast access to essential services.

Second, modern approaches treat identity as shared infrastructure, not a series of disconnected program controls. Fraud thrives in silos. When identity intelligence is isolated, bad actors can move from one program to the next with the same credentials. Networked approaches break that cycle by recognizing risk once and acting on it everywhere, stopping fraud from scaling across agencies and programs.

Third, modern systems give leaders visibility they have never had before. Instead of reacting to headlines, agencies can see where fraud is being blocked, where risk is rising, and which programs are under pressure. That transparency creates accountability and gives leaders the evidence they need to explain results to taxpayers, auditors, and lawmakers.

State leaders face a choice. They can stay reactive, explaining fraud only after it becomes visible, expensive, and politically unavoidable. Or they can get off the sidelines and act early, investing in modern identity and fraud controls and clearly explaining how they are protecting taxpayer dollars. Standing still is no longer neutral. It is a decision with consequences.

The next headline does not have to be about another scandal. It can be about a state that decided to get identity right – and made fraud a lot harder in the process.

Jordan Burris is Head of Public Sector at digital identity company Socure and a former chief of staff to the federal CIO.