WASHINGTON—Vice President JD Vance announced new efforts to combat fraud nationwide during a news conference on Feb. 25 in the Eisenhower Executive Office Building with Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services.

The federal government is temporarily deferring $259 million in Medicaid payments to the state of Minnesota, citing widespread fraud. Minnesota Gov. Tim Walz has 60 days to respond.

“What we’re doing is we are stopping the federal payments that will go to the state government until the state government takes its obligations seriously to stop the fraud that’s being perpetrated against the American taxpayer,” said Vance, chairman of the White House anti-fraud task force.

Minnesota already paid providers using state funds, but federal reimbursements are now on hold.

Vance described schemes uncovered in Minnesota in which individuals “set up sham businesses ... [and] set up sham clients.”

“A lot of people are getting rich off the generosity of American taxpayers,” he said.

“But more fundamentally and more importantly than that, it means that there are kids in Minnesota who deserve these services, who need these services, and they’re not going to those kids; they’re going to fraudsters in Minneapolis,” Vance said. “That’s unacceptable, and that’s the sort of thing that we’re cutting off with this action today.”

He said President Donald Trump’s administration has prioritized the elimination of waste and abuse nationwide.

“And we are going to start very aggressively in the administration, cracking down on the people and the organizations that are defrauding Americans,” Vance said.

Oz said the action targeting Minnesota is meant to spur compliance, with announcements regarding other states coming soon.

“This quarter-billion-dollar deferment is hopefully going to get on the radar screen of the state of Minnesota and make sure they are responsive to our requests,” he said.

Walz strongly objected to the federal action, charging the Trump administration in a post on X with subjecting states under the control of Democrats to punitive treatment.

“This has nothing to do with fraud,” he said. “This is a campaign of retribution. Trump is weaponizing the entirety of the federal government to punish blue states like Minnesota.”

The administrator also announced a six-month moratorium on all new enrollments nationwide for durable medical equipment supplies, including prosthetics and orthotics, among other items.

Oz said the move is needed to curb widespread fraud and abuse in the industry. Southern Florida is currently a hotbed for illegitimate medical supply billing, he said, with twice as many durable medical suppliers as McDonald’s locations in the region.

A single investigation netted $23 billion in fraudulent billing, according to Oz, savings that will benefit American seniors by about $132 each this year.

The estimated cost to taxpayers of fraud across the country totals approximately $300 billion annually, according to officials.

“We have to take these crimes seriously and treat them as seriously as if they were bank robberies, because they’re more dangerous than bank robberies,” Oz said. “People get hurt during them.”

Dr. Mehmet Oz, administrator for the Centers for Medicare and Medicaid Services, speaks at a news conference in the library of the Eisenhower Executive Office Building in Washington on Feb. 25, 2026. (Travis Gillmore/The Epoch Times)

He cautioned against relying on prison sentences as sufficient to address the issue, saying that many of the offenders are foreign nationals who flee the country.

“Instead, we’re launching the largest action against fraud that we’ve ever taken,“ Oz said. ”The money is not going to ever leave the building again. We’re going to start draining the swamp of the crooks that have inhabited it and are defrauding us.”

With supplies and resources limited as a result of the fraudulent activity, he emphasized that Americans in need are missing out on opportunities.

Oz described one scheme in which parents were paid $1,000 per child to falsely enroll them as autism patients, as a result of which the federal government paid millions of dollars for services that were never provided.

Another instance involved a provider that submitted claims for 450 days in which the provider billed for more than 24 hours per day.

The announcement comes a day after Trump singled out the states of California, Maine, and Minnesota for allowing rampant fraud and abuse to occur.

Administration officials are also asking the public to help identify potential fraud and wasteful spending affecting the federal government. Anyone with information is asked to call 1-800-HHS-TIPS or visit CMS.gov/fraud.