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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_.

I'm very amenable to the argument made in the blog post, but the tone and sidecars attached made it feel quite off, like if I looked into it, it'd turn out there was a rush to get the main idea down so we could get the sidecars attached.

Spent about 30 minutes consulting the report you mention, OP's post, and your reply, and there's clearly issues.

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." (this should have been a tell)

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

Those are completely different claims. "An investigator 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.

FoF claimed to supply meals at the same physical locations as CCAP and paid the same owners. As mentioned, one of nine of the operators profiled, who was previously raided in an investigation into alleged overbilling of CCAP, received $1.5M from FoF. FoF is in fact not a federal nutrition program but actually the name of a non-profit which received grants from a federal nutrition program for forwarding to third parties. CCAP is also funded by federal block funding.

The operator overlap is real, and the correction that FoF is a non-profit rather than a federal program is fair. I'll take both points.

But look at what's happened across this exchange:

Essay: Industrial-scale CCAP fraud is "beyond intellectually serious dispute." The evidence: the OLA report shows investigators believed 50%+ of reimbursements were fraudulent.

When challenged that the OLA explicitly could not substantiate $100M and proven fraud was $5-6M: you retreat to "my citation that investigators believed this is absolutely true and is in the report as claimed."

When challenged that "investigators believed X" ≠ "X is beyond intellectually serious dispute" — especially when the same report documents the IG saying "I do not trust the allegation," DHS leadership calling $100M "not credible," investigators having "varying levels of certainty" with some having "not enough experience to have an opinion," and the OLA itself saying "we cannot offer a reliable estimate": you pivot to FoF operator overlap.

You still haven't addressed the actual critique. The overlap proves that some fraudsters work across programs. Not disputed, not surprising, and consistent with your essay's point about fraud lifecycles. What it doesn't do is retroactively substantiate Swanson's 50% CCAP figure. His methodology, spelled out in the very email the OLA appended, counted all payments to any center where children were poorly supervised as 100% fraudulent, a standard he himself distinguished from "the kind of proof needed in a criminal or administrative proceeding." FoF fraud was fabricating meal claims for meals never served. CCAP fraud is billing for children not present. Different programs, different billing mechanisms, different oversight bodies (MDE vs. DHS), different proven scales by orders of magnitude. That some of the same people ran both doesn't collapse the distinction.

"CCAP is also funded by federal block funding" seems designed to blur a line that matters. Many programs are federally funded. That doesn't make convictions in one program evidence of the fraud rate in another.

Here's what's frustrating: I think the essay's core argument is genuinely strong, and it doesn't need the overclaim. The OLA report is already damning on its own honest terms: proven fraud of $5-6M in a program with paper sign-in sheets prosecutors called "almost comical," no electronic attendance verification, 60-day billing windows, a certification statement removed from billing forms in 2013, and the investigators themselves saying centers "open faster than they can close the existing ones down." The report makes it clear fraud was likely substantially higher than proven convictions. That's already a devastating indictment of program oversight. Your argument about base rates, weak controls, and Shirley fishing in a troubled pond all follows from that, from the report as it actually reads.

But "likely substantially higher than $5-6M, in a program with terrible controls" is a very different claim than "50%+ fraud, beyond intellectually serious dispute." Your essay presents the latter. The report supports the former. And the gap matters, because the essay is being read right now, today. in a context where the president is calling Somalis "garbage," prosecutors are throwing out $9 billion estimates in press conferences, and five states just had billions in child care funding frozen. Overstating what the evidence supports isn't a minor rhetorical choice in that environment. It's exactly the kind of epistemic failure the essay warns about when it talks about "irresponsible demagogues" filling the vacuum.

The thing which is beyond intellectually serious dispute is industrial-scaled fraud.

You keep wanting to make me "own" the CCAP's estimate. I will not reciprocally try to make you "own" $5 million, because I am charitable and because history has been unkind to the officials who made it.

I do ask you to own: "Minnesota HAS NOT suffered industrial-scale fraud across several social programs." Otherwise this is judging a high school debate competition, and I've had better.

Of course Minnesota has suffered industrial-scale fraud. FoF alone clears that bar. I've never said otherwise.

But your essay doesn't just claim fraud exists: it presents the 50% figure as the evidence that "staggers the imagination" and makes the case "beyond intellectually serious dispute." That's not parenthetical color. The paragraph is load-bearing on that number.

You charitably won't make me own $5M. I never claimed it. I've said in every reply the real number is likely substantially higher. My point has been the same throughout: you presented a disputed estimate as settled, from a report that explicitly could not settle it - in which the IG rejected it, DHS leadership called it not credible, the OLA said it "cannot offer a reliable estimate.", and the source themself named their lack of a standard beyond a vibe.

The essay is 5,000 words on why epistemic standards matter in fraud investigation. The critique is the essay's own standard, applied to the essay. You should apologize for the high school debate comment.

The essay reads to me as 5000 words on why epistemic standards should be lowered for effective fraud investigation. Requiring retrospective evidence - the highest epistemic standard - is too slow and expensive, so the government needs to copy the private sector's epistemic standards where a collection of solid heuristics and smart observations is sufficient to preemptively block payment.

It's an insightful point, but it seems consistent with those epistemic standards that it's unimportant whether the 50% figure is valid in retrospect. The observation of "industrial-scale fraud" is sufficient to act, it doesn't need a retrospectively validated 50% figure and he would like you to get all the way off his back about it.

The charged language (“get all the way off his back”) is unnecessary. You are responding as if I am attacking him personally or the post in general.

I am not. I am repeatedly enthused about it. You are in fact, parroting positive things I am saying about it.

I am on Hacker News, responding to him responding to a critic on a particular point.

Sorry I meant that humorously in the vein of Ryan George's comedy YouTube series "Pitch Meeting" where one of his catch phrases is "I'm gonna need you to get all the way off my back on that"

This is genuinely pathetic, Patrick. You want to say it so bad but can’t!

No notes on the fraudsters pardoned by this current admin of course.

Fraudsters pardoned by the current administration don't make public service and welfare fraud in Minnesota any less grave or important, and it's super weird that people across this thread keep implying otherwise.

The political sidecars attached are unnecessary.

OP didn't claim you of misrepresenting facts in the document directly; OP claimed you of grossly mischaracterizing those facts in order to support claims the document does not support. The document is cited as supporting massive fraud "beyond intellectually serious dispute" while the scale of the fraud is disputed in the cited document.

But, on the other hand, I suppose intellectually serious dispute requires both sides to be intellectually serious. One good step in that direction would be to arrange one's citations such that they are supporting the claims you are citing them for.

I will also remark, as others have, that it's odd to make a big deal about this particular fraud when there's a lot more fraud happening a lot more obviously in a lot more of the nation. This is not to question Minnesota officials who are, rightly and appropriately, investigating suspected fraud in their zone of investigation; but it is worth questioning voices who have, apropos of nothing I can discern, made decisions about what's important to talk about and what isn't, and further made decisions to misrepresent allegations in alignment with people who very aggressively lie for evil reasons. As others have pointed out, the essay's core is seemingly cromulent, and it doesn't need you to do that.

<LLC voice> We have reviewed your feedback on our editorial choices, and are comfortable that we have characterized the claims in the report accurately. We stand by "Minnesota has suffered a decade-long campaign of industrial-scale fraud against several social programs. This is beyond intellectually serious dispute." This is editorial analysis, informed—as is stated in the plain text—by the experience of several programs. Feeding our Future, for example, is cited in the piece, with analysis. It has resulted in dozens of convictions and guilty pleas, and federal prosecutors characterize it as having defrauded the public of nine figures.

You are welcome to your own opinion as to what could motivate a publication which routinely writes about fraud and finance to write about fraud and finance. Past issues you may enjoy include a year-long investigation into a single incident of fraud in NYC, a topological look at the fraud supply chain in credit cards, discussions of how the FTX fraud was uniquely enabled by their partner bank failing to properly configure their AML engine, and similar. </LLC voice>

Seriously, it's beyond amazing how much mud this thread has been flinging at you. If the analysis you've offered is somehow not above board, it seems impossible to point out the clear facts of the matter in a way that nobody would object to.

Agreed. I thought the article was an interesting look at how fraud in many ways acts like a real business, and how one can use fraudsters' tendencies in order to catch them. The discussion in this thread has been 90% partisan slap fights while ignoring the substance of the article. It's absolutely shameful.

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.

I'm kind of surprised how the political and legal network around Feeding Our Future, for example, has gone so unnoticed and underreported.

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>cryptoracist

He hates cryptographers?

The man has nothing nice to say about Bigfoot.

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

Seems to be a bad use of "racist".

Oh I agree. I’m mostly just being facetious.

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

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.)

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.

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.

Tammany hall got people murdered [https://en.wikipedia.org/wiki/Tammany_Hall].

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.

Hmm. Do you think that kristjansson was using it just to mean state-backed thugs, or were they also claiming some Russia link?

(They haven't responded, and I've been downvoted for even asking the question. I am genuinely confused. I'll admit I don't follow this all very closely, but I want to understand what the phrase means here.)

Your original question was a bit of a challenge to accept earnestly. It’s a pretty charged situation; joking about ETs led me to discount it and may have led others to downvote.

That said, I described them as such because I considered the comparison to a masked and armed force of nebulous origin and ambiguous intention apt.

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> 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.

This is a poor example though, because I don't think anyone got away with it? And it was viral, but not organized.

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/

Much better bangers about fraud:

Dead Prez - Hell yeah: https://youtu.be/kGjSq4HqP9Y?si=_z6jb0Vfo7_PiITQ&t=82

Maxo Kream - 5200: https://www.youtube.com/watch?v=7kC9j6Zp-kg

Maxo was actually arrested for racketeering, though not due to this song specifically (I don't think).

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...

Very related Key & Peele sketch: https://www.youtube.com/watch?v=14WE3A0PwVs

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

I never understood why we have public schools but not public kindergartens.

Everywhere I have ever lived in the U.S. has had public Kindergarten. I assume this is probably a regional difference in terms, though? In the U.S. Kindergarten is just the grade before 1st grade. Any schooling/day care before that is usually called "preschool" and is often funded to some extent at the state level but if so is usually limited only to low income individuals.

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

> 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.

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.

Oddly enough starting an article with a defense of Nick Shirley leads to the comments on an article being about that.

I mean, I wouldn't have led off that way either, but I know what Patrick is talking about and I read the article. I genuinely believe the current administration is the worst in the history of the country, and I also believe that to oppose it effectively we need every government body we run to be completely on the ball, so it's really dispiriting to see people reflexively defend misconduct and incompetence. That shouldn't be a habit we share with the party we oppose.

(I can't speak for Patrick's politics, only for mine.)

No government body is run completely on the ball, which is why it's such an effective bad-faith demand.

I don't even know where this belief comes from. I'm certainly not aware of any historical scenario where authoritarian regimes end when their opponents finally embody perfect behavior above reproach.

It would be a bad-faith demand if I was asking people to assume every blue-state government was bad. But I'm not: I'm simply asking to recognize one that clearly is.

You don't need to ask people to assume every blue-state government was bad, Nick "name a Democrat city that's prospering right now" Shirley will do that after you, you just have to tee him up by saying the first part: "we need every government body we run to be completely on the ball".

I doubt you yourself are engaging in bad faith (of course I recognize your username) but it's still a bad-faith demand to expect "completely on the ball" behavior above reproach and your intentions don't matter when you echo the demand.

For the author, it wasn't enough to simply recognize a failure to prosecute fraud fast enough, such a failure must be characterized as the cause of the irresponsible demagoguery that followed. Then turns around and wonders why his article isn't treated as the apolitical dissection of fraud that he claims it to be.

I don't understand this at all. The DFL-controlled government of Minnesota royally fucked up and allowed fraud against a social services program on an industrial scale. That fraud isn't a small crime; it's a grave crime, victimizing the most vulnerable people in our society. It's a very big deal. This is a technical post discussing a variety of different ways in which program administrators could hope to prevent something like it from happening in the future.

How are people finding ways to downplay or dunk on this? I just don't understand. What do I care how "apolitical" it is? I don't care. I do not care. The fraud is what we should care about. That's what the post is about.

You don't have to care how apolitical it is but the partisan political nature of the post, which it starts and ends with, is why the HN thread is reacting to and discussing partisan politics. What makes it partisan is the shift from admonishing the government to justifying the partisan "irresponsible demagogues" that are currently brutalizing Minnesota by pointing to the blue-state government's slow prosecution of Somali immigrants.

When Charlie Hebdo was bombed and shot, I suppose what people should have been writing is a technical post about the poor quality of their work with tips on how to convey the same artistic point in a way that doesn't invite fanatics to bomb and shoot them, concluding that by not reining in their bad work they have ceded the field to people who will not be gentle in their proposals. Then you can comment things like "What do I care how apolitical it is? The art is what we should care about. That's what the post is about".

Edit: maybe a better analogy would be 9/11 with the US and Al Qaeda, where the US would be less innocent in your political sensibility than Charlie Hebdo and the dynamic I hypothesized was more real.

The partisan politics of this story are off-topic for the site! We're supposed to be discussing the substance of the story!

The partisan politics are in the story and part of its substance (and really how could it not be? what he's suggesting has substantial political consequences even setting aside the naked partisan jabs). The presence of technical details doesn't negate that, many polemics have technical details.

That is not a plausible objection to this article and as someone actively involved in Democratic politics and a compulsive HN participant I find this whole thread really embarrassing.

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.

The way I phrased that point was "The investigators allege repeatedly visiting daycare centers which did not, factually, have children physically present at the facility despite reimbursement paperwork identifying specific children being present at that specific time. The investigators demonstrated these lies on timestamped video, and perhaps in another life would have been YouTube stars."

[flagged]

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.

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>How many legit daycares have you ever seen where the staff is all men? And aggressive men at that.

None in my entire life. They're all ladies. Any guys are dads coming through.

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.

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.)

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.

> Your premise is that a YouTube video published Dec 26, 2025 somehow motivated a federal law enforcement action that commenced on Dec 4, 2025.

The surge of ~2,000 officers only happened around Jan 5-6, 2026. And this happened after the video in question was reposted by J.D. Vance and referenced by Kash Patel.

It's true that Operation Metro Surge as a whole started a month earlier. But, zooming out from that specific video, the operation was from the start motivated by the fraud scandal, according to reliable sources [1]. Official statements around this time of the later surge also referenced the fraud scandal [2]. Meanwhile, Trump delivered several speeches during this time complaining in racist terms about Somalis in general.

It's also true that the actual activity of Operation Metro Surge is mostly unrelated to the fraud. But that's the whole point! The administration seized on the fraud, and later seized on that specific video, as an excuse to send in ICE and CBP agents to do something completely different. As the parent said, this probably did not "make it more [..] likely that we'll be able to investigate and resolve the fraud situation in MN". Or if it did, it did so very inefficiently compared to other possible approaches such as getting the FBI to focus on it (which also happened). The surge did focus public attention on the issue, which might encourage local officials to resolve it. But it also massively poisoned the well. How much you want to talk about the fraud issue is now a proxy for how much you _don't_ want to talk about what liberals see as the much larger issue of abuses by ICE/CBP.

[1] https://www.nytimes.com/2025/12/02/us/politics/ice-somali-mi...

[2] https://x.com/KristiNoem/status/2005687345895645204

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.

False dichotomies like that are easy mistakes to make. Consider Reddit, no conspiracy, and yet overwhelmingly of some opinions. Coordination requiring conspiracies is naïve, but forgivable among novices of epistemology.

Observers of this exchange will note the main point, the base rate fallacy, has not been addressed. Instead, a nit about rhetorical punctuation was indulged.

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

Did you see any articles about the scam that attempted to educate about fraud prevention generally in the way that McKenzie does?

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 ...

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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?”

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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.

Now go on X.com and see whether this blog post is being shared and discussed amongst the MAGA Silicon Valley executive class. Taken at face value, this topic is completely irrelevant to them and you should see no mention of it whatsoever and therefore I am hallucinating things. But if you do see it discussed, then you'll also see a subtext of "See, Trump was right to send ICE to MN!", and thus patio has done his job well in the way I described.

This is not a reasonable way to understand the world. It does not matter if facts are inconvenient on Twitter (why do you care about what's being said on Twitter to begin with? stop now.)

This attitude, that if reactionary tech execs are sharing something on Twitter it must be bad to talk about it, is poison.

It's an extremely unfortunate and shockingly stupid way to understand the world, but not unreasonable, because it's a accurate reflection of how the world works at the moment.

Take a look at the situation "room" at Mar A Lago during the Venezuelan coup: https://www.buzzfeed.com/mjs538/trump-situation-room-photos

What's the main thing up in the screen? Fucking Twitter, because that's what the US government cares about and that's what drives their decisions. The Vice President follows an exquisitely curated set of groypers whom he endlessly tries to impress, the Secretary of "War" is obsessed with impressing Twitter losers with his "lethality" TED talks, they all get giddy seeing citizens executed on the streets, it just doesn't stop. Patio knows exactly the crowd he's playing to.

None of this has anything to do with the article.

I'm afraid the executions will continue until you see that it does and this is how support is formed and maintained.

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.

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.

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.

It's wild how distorted everyone's bubble is. If you go to conservative news sites or r/Conservative, you'd think this daycare business was the biggest problem that has ever faced the United States since 9/11. Every other article is about daycare and Somalis. Like, really? This is the big story of 2025???

In the real world, this maybe makes page 3 of the "crime" section of the newspaper for a single day.

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.

> 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.

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

My bicicle got stolen a long time ago and I never recovered it. The perpetrator was never caught.

From this we can conclude many things. Maybe the thief was very crafty. Maybe the local police are incompetent. Maybe everyone is trying their best and the job of going after bike thieves is very hard.

But you cannot ever convince me that an appropriate conclussion could be "your bicicle didn't actually get stolen". I saw it. I can't identify the thief, there will never be a conviction, but don't tell me it didn't happen.

A conviction in a court of law is very important to be able to confidently say "so-and-so has committed fraud". But requiring a criminal conviction just to be able to say that fraud has happened is lunacy.

Yes, but we're not talking about whether or not bike thefts happen, or medicare frauds, we're talking about what actions we're going to take in the future.

I too have had a bike stolen and it was an incredibly awful experience, but I'm not going to vote for a law requiring us to execute people accused of bike theft.

This is what is so incredibly frustrating about these types of conversations because so frequently you have one side proposing fact based strategies developed via reaearch and experiments and historical analysis and so forth, but that makes them quite complicated to explain in 30 seconds on tv, and on the other side you have some asshole going "all these problems are caused by <subgroup> and if you give me power I'll be cruel to them and everything will be better".

The latter's simplicity seems to be highly appealing and attempting to argue against it using facts and logic requires A) the listeners to actually respect facts and logic and B) and lot more effort to research/cite/develop the facts and logic.

So again, it sounds like fraud happened. This is bad. Some people were imprisoned because of it. Now what?

I keep asking this basic question because that's whats actually missing from the article.

Is there a specific person who should be in prison but isn't? Is there a law that could be passed to make fraud harder? What, specifically should be done?

That's literally what the article is about.

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?

My take-away from the article is a bunch of fraud-identifying and fraud-thwarting tips.

Ideally, state programs should:

1. not pay out until a beneficiary's bona-fides are first verified. Paying out first, with no verification, and only retrospectively trying to claw back fraudulent claims, only after expensive investigations, is ruinous on the state budget.

2. work with private industry to identify alleged fraudsters

3. require much more verification of alleged fraudsters before agreeing to pay anything out

4. snoop around to find fraudsters' abettors because they're easier to find than the fraudsters

Other than one section saying that fraud investigators should expect to find ethnic clusters (because fraudsters of all ethnicities use their families and friends), there's nothing about ethnicity being a "flag". The biggest flag is that the same person previously committed fraud, and the article laments that civic government often gives a "clean sheet" to known fraudsters, in a way that the finance industry never would.

There was also the point about lack of granularity and follow-through.

The government has the power to ruin your whole life, so it's reasonable that they have high standards of evidence to ruin your life. But if they can't secure a conviction they do nothing, they'll let you open another NGO and apply for another government grant as if nothing happened.

A business has the power to inconvenience you by refusing to do business with you. That's less ruinuous than what the government does so it's OK that their standards of evidence are lower.

But perhaps there should be something that the government can do in between nothing at all and ruining your life. Otherwise the same frauds will happen again and again.

I agree, but you've already mentioned the issues with the government having a punishment system that isn't based on the courts. We all know how great the secret no-fly list is.

> 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

This is not a fair or reasonable conclusion from what the article actually says.

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.

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> (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.

I can't help but notice that said other person's profile claims "out of here"; and before this thread, had not commented since October 2024 — in that case also to get in an extended political argument with you specifically. That's quite a grudge to hold.

What can I say? People love me.

Eh, that part's not so weird. Not weird to forget that HN is weird in this particular way. I just wanted to clarify it for myself & for anyone reading.

Two hours, I believe. But they can't be deleted if they have been replied to.

The only thing I get for my abnormally high amount of karma is the right to veto one YC startup out of every batch.

Sarcasm, right, I hope? Or do you actually work with YC in some capacity?

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

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

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.

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...

> beyond some vague allusions that perhaps racial/ethnic profiling should make a comeback.

It suggests nothing of the sort, and in fact explicitly attempts to establish that none of this is intrinsic to any affinity group. The point isn't that the fraudsters in this case were of a particular ethnicity; it's that they shared an ethnicity, which enables the kind of internal social trust that fraud rings require.

Further, it suggests many clear heuristics that are nothing to do with ethnicity. The suggestions are clear and explicit; they just happen to involve occasionally denying services without proof of already-committed fraud, which you apparently consider unacceptable. But here is an experienced person telling you from expertise, with abundant citations and evidence, that nothing else really works, and furthermore that this is common knowledge in a well established industry specifically devoted to the problem.

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.

I don't think that's indirect at all. It's pretty clearly what did in fact happen in Minnesota. I don't read the author as claiming it's endemic to liberal values, any more than the isomorphic pathologies are endemic to the finance industry (which Patrick also writes about), or the defense industry. Again: it's easy to find Democratic sources saying the same thing.

Why is it so difficult for people to acknowledge that Minnesota fucked this up badly? What is that going to cost us? The attempts to downplay it seem pretty delusive.

Well, we live in a world where someone ran for president on the basis of "stopping welfare fraud" that turned out to be mostly a myth, so, you know, context is a thing.

As the article literally says, a whole bunch of people got sent to prison, that seems like pretty solid evidence.

The question is: now what?

Run the rest of them down? Figure out the total scope of the fraud, so we can enact countermeasures to prevent anything like it from happening again?

Fraud targeting social welfare programs is a grave crime; it strikes at public support for those programs. It enriches criminals very specifically at the expense of those people who would most benefit from the program.

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.

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?

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.

Posts like this make it clearer to me every day why Trump won twice

can you explain that please?

as far as i can tell trump is all about not trusting people but aggressively enforcing arbitrary rules no matter the cost. exactly what i am criticizing.

Reality makes some people angry and listening to trump lie makes then feel good again.

This is a very funny reply, given how distant from the truth your posts have been here

This is not a reasonable characterization of the text. The proposed action is not at all fascist.

McKenzie uses paraphrases to avoid writing certain keywords. For example, he never writes "DOGE" or "Elon Musk" in this article. Instead, he writes "We had a poorly-calibrated federal initiative led by a charismatic tech entrepreneur."

If you've been reading the news then you can decode these paraphrases, but they do make his articles significantly harder to read.

I'm tempted to ask an LLM to replace them with more straightforward references.

Yeah that part was a bit weird. Is he trying to avoid being sued or something?

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

> [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.

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

If a tree falls and no human hears it did it make a noise?

When an asteroid strikes Earth, its kinetic power is rapidly transferred primarily to the atmosphere, surface, and subsurface in the forms of thermal energy (heating and vaporization), mechanical energy (crater formation and ejecta), and seismic energy (earthquakes and waves).

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).

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".

> The reason why risk departments all inevitably reinvent Maoism is because the only effective enforcement mechanism they have is to refuse service.

How is it Maoist to refuse service???

> This calculus falls apart for the government.

It really doesn't. The judicial process is expensive and jail time isn't at all proportional to the amount defrauded (especially not when there is no political appetite for locking up a disproportionately "racialized" set of culprits, never mind the facts); nor does it solve the problem of recovering those funds. Further, the projections on the amount of fraud uncovered make it seem rather likely that a high percentage of those responsible are going free.

> We don't need to repeatedly reinvestigate the same people for the same crime "just in case".

The entire point of the system you're calling "Risk Maoism" is that it does not involve reinvestigation; it involves a presumption that reinvestigation would be a waste of time.

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.

He literally writes about how the claims of racism and profiling were in bad faith, intended to frighten the state investigators, and that this is known from email communications revealed in discovery on some of these prosecutions where the fraud participants discuss the strategies they will employ to maximize the impact of their bad faith allegations of racism and racial profiling. There is no ambiguity here so I don’t understand why you still want to carry water for these fraudsters.

Just to clarify, are these the ones who got arrested and sent to prison?

The particular people patio11 is referencing are in jail and charged but not yet convicted. The emails have been entered into evidence and thus made public as part of the trial.