Yet, it’s on the verge of becoming yesterday’s news! 

Can you name the three biggest financial scams of the past 25 years?

If you guessed Enron (around $60 billion), WorldCom (around $165 billion), and Lehman (around $65 billion), you guessed correctly.

The details of these scams, which were big news in 2002, 2008, and 2001, are clearly remembered today by the small percentage of Americans who invested in them (probably in the low millions). But for most people, they simply evoke the vaguest of memories about rich people losing some of their money by betting on fraudulent companies.

However, if I asked you to name two scam artists who ripped off innocent people of billions of dollars in recent years, you would probably remember Bernie Madoff and Sam Bankman-Fried.

Those stories hit harder, I think, for one very good reason: The rip-offs were conceived of and conducted by individuals, rather than faceless financial corporations. 
 
And if I asked you how big those rip-offs were, you might remember that they were both in the $50 billion to $60 billion range – an amount that seems almost inconceivable, given that they were pulled off by scumbags that had no reputable associations to give them credibility, no government-verified annual reports, and no real, traceable numbers to establish their false claims.
 
You may even be wondering, “Why haven’t I seen a detailed explanation of how they managed to steal so much money from wealthy, sophisticated investors and even respectable financial institutions?”
 
Well, the answer is interesting. 
 
Consider that Madoff’s $64 billion “greatest Ponzi scheme in history” shrank down to single-digit billions in unrecovered principal, thanks to clawbacks and Justice Dept. distributions that paid back around 94% of verified claims. 
 
And, in fact, the same thing is true of all of these huge scams: Investors incurred enormous losses thanks to inflated valuations and fake statements. But if you dig down to the hard cash that actually went in and wasn’t ever recovered, the numbers drop dramatically. (Understand, I’m not making light of those losses. They caused real pain for a lot of people. But it wasn’t what the headlines implied.) 
 
I bring this up because all of it is a prelude to a different kind of financial scandal – one that could eventually dwarf the others in terms of money taken not only from the pockets of wealthy and sophisticated investors, but from tens of millions of ordinary American taxpayers who will never see that money again.
 
It’s a big story – the story of a massive criminal enterprise that involves not only the scamsters themselves, but the political systems in which they operated, including local bureaucracies, the federal government, and the media.
 
Finally – and this may be the most interesting part – it is a story about culture and immigration and the manipulation of the American dream.
 
A Factual Expose:
The Largest Welfare Fraud in US History –
Why Are So Few People Talking About It?
 
You may have seen a fleeting headline or two about “Feeding Our Future,” the Minnesota nonprofit accused of siphoning off roughly a quarter‑billion dollars in federal child‑nutrition reimbursements during the pandemic. Federal indictments include descriptions of fake meal sites, fabricated attendance logs, and money spent on luxury cars and homes instead of food for children. 
 
The case involved approximately $250 million in allegedly fraudulent federal child-nutrition reimbursements, according to Justice Dept. filings. That alone made it one of the biggest welfare fraud cases in recent years. But when federal prosecutors dug into it, the numbers they came up with were much larger.
 
According to federal and state officials that reviewed the findings, the total fraud money paid out to scammers since 2018 across 14 Medicaid and human-services categories is somewhere between $9 billion and $18 billion.
 
And that’s just in Minnesota. The same scam and the same group of operators have now been discovered in New York and California.
 
Especially interesting is how all of this was brought to light. Because it wasn’t uncovered by a famous reporter or a major news outlet. This massive case of fraud was pushed into the national conversation by a 20-something, self-titled citizen investigator named Nick Shirley, who went on YouTube to reveal what he had discovered about empty Somali-run daycare centers billing the state for full-time care. Supplying spreadsheets, emails, and videos of altercations he’d had with those running the daycare centers, Shirley did what mainstream media was unable or unwilling to do.
 
Internal staff and state auditors had been complaining for years about suspicious billing patterns. The Minnesota Dept. of Education had referred Feeding Our Future to the FBI during the pandemic, and sloppy contracts were flagged by whistleblowers long before Shirley’s story went viral. 
 
But because the state’s Somali population was implicated in the fraudulent activity, the issue became a politically charged hot potato. Early reports about it were called fake news, and the early voices that expressed outrage over it were labeled xenophobic and racist.
 
Just the Facts: 
Why It’s Called the Somali Scandal 
 
Minnesota is home to approximately 94,000 people of Somali ancestry. It is one of the biggest Somali communities in the country, but it remains a relatively small share of the overall state population of roughly 5.7 million. 
 
Yet the demographic distribution of defendants charged in Minnesota fraud cases tied to welfare, Medicaid, and other child-assistance programs has been striking. 
 
As of early 2026, 98 individuals had been charged – and of those, 85 were Somali American, according to federal sources. (Independent demographic research shows that among Somali-headed households in Minnesota, approximately 54% receive SNAP benefits, 73% have Medicaid participation, and nearly 89% of households with children receive some form of means-tested welfare assistance.)
 
The Somali Fraud in Historical Perspective 
 
What does this all mean? 
 
If you’re measuring scandals by headlines, Bernie Madoff wins. If you’re measuring by suggested wealth destroyed, the big corporate scandals top the list. 
 
But if you measure by something relatable to every one of us in terms of real dollars leaving taxpayers’ wallets that will never be reclaimed, the so-called Somali Scandal was larger, by far, than any scheme ever that bilked taxpayers through government-legislated social services.
 
What is perhaps more disturbing than the size of the scam is how many Somalis were involved in it. It wasn’t merely several dozen con artists stealing money surreptitiously. It was the thousands – possibly tens of thousands – of Somali parents that were playing the con from the other side by getting cash payments to enroll their children in daycare programs that they knew were fraudulent because their children never used them.
 
And for me, at least, there is another level of shame and culpability here. It is the politicians and media that didn’t put an end to it for years and years, despite numerous warnings from whistleblowers. 
 
The list of corrupt pols went from local bureaucrats right up to the governor and the government bureau chiefs who stifled whatever investigations the whistleblowing started and continued the funding and distribution of these billions of dollars of stolen money.
 
And if all that is not sickening enough, when the story was finally brought out by Nick Shirley, the mainstream media began a campaign to discredit him. And when that didn’t work, to accuse him and anyone else who called for justice to be xenophobic racists.
 
And guess what? The defenders of the largest government/private financial scam in my lifetime has all but disappeared from political and social policy discussions.
 
It’s now more than four months since Nick Shirley’s vlog went viral. And apart from some “racist” conservatives that want to see more than a dozen or so minor players in the scheme go to jail, nobody in the media – not even the conservative media – is talking about it.
 
Culture, Clans, and Human Values 

Ayaan Hirsi Ali is a Somali-born Dutch American writer, activist, and former politician. According to her, Somalia’s core organizing principle is clan allegiance. In Somalia, every child is taught their lineage and who they “fight and die for.” And when 100,000–150,000 Somalis move to a place like Minnesota, you inevitably get transplanted clan dynamics.

Politics, trust, and conflicts are all filtered through something called “amoral familism,” she says, a term coined by Edward C. Banfield in his 1958 book The Moral Basis of a Backward Society. It describes a social system where loyalty to the family takes precedence over everything else.

Hirsi Ali writes about it here in The Free Press.

And speaks about it here.

If you’d told me 20 years ago that the Southern Poverty Law Center would be sitting under an 11-count federal indictment for fraud and money laundering, I would have laughed it off. Back then, in my mind, they were one of the good guys. They went after the bad guys – businesses, municipalities, and individuals that were actively and obviously suppressing the rights of impoverished Black Americans.

I haven’t followed the SPLC closely, but over the last decade it’s been hard not to notice the drift. The mission expanded. The targets changed. And the tone began to feel less like courtroom advocacy and more like political positioning.

For example: They broadened their “Hate Map” to include mainstream conservative and religious organizations like the Family Research Council and Alliance Defending Freedom. They published a 2016 “Field Guide” labeling a range of commentators as “anti-Muslim extremists.” And they increasingly weighed in on issues like immigration, gender politics, and parental rights – territory that looked a long way from their original civil rights brief.

Still, I was stunned by the latest accusations. According to the indictment announced by acting Attorney General Todd Blanche, the SPLC is alleged to have funneled more than $3 million in donor money to individuals tied to groups like the Ku Klux Klan and neo-Nazi organizations between 2014 and 2023 – using fake business names to do it.

Now, an indictment isn’t a conviction. And in today’s political climate, both sides have shown a willingness to weaponize institutions when it suits them. Some widely reported stories in recent years haven’t aged especially well.

The Trump-Russia “collusion” story drove headlines for years without establishing a criminal conspiracy. The “Bountygate” story about Russian payments to Taliban fighters later came under serious doubt. And the Hunter Biden laptop story was initially dismissed as disinformation before key elements were verified.

So yes, skepticism is warranted.

But then there are the things we already know.

Take Maajid Nawaz, a former Islamist who became a prominent critic of extremism. The SPLC labeled him an extremist anyway. He sued – and won a $3.4 million settlement and a public apology. That’s not a gray-area outcome. That’s a clean loss.

Others, like Daniel Pipes and David Horowitz, were swept into similar categories, raising a basic question about whether the definition of “extremism” had quietly expanded to include inconvenient opinions.

The most troubling allegation now is the idea that the SPLC may have had a financial incentive to amplify the very threats they warned about. After the Charlottesville rally, for example, revenue reportedly jumped from about $50 million to $132 million in a single year. Donations poured in. The business of fighting hate was booming.

That kind of feedback loop isn’t unique. In financial publishing, conservative newsletters tend to sell best under Democratic administrations, and the reverse is also true. Fear sharpens attention. Attention drives revenue.

But if the indictment is even partly accurate, this goes well beyond that. It suggests not just benefiting from the cycle but feeding it.

Again, we don’t know how this ends. But I can say this without hesitation: Ten years ago, I would have dismissed accusations like these outright. Today, after watching the SPLC evolve into something that looks less like a civil rights law firm and more like a well-funded political brand with a blacklist attached, I read them and think, “That’s not crazy.”

Just the Facts 

* A federal grand jury in Montgomery charged the SPLC with wire fraud, bank fraud, and money laundering, alleging over $3 million in payments to members of the KKK, Aryan Nations, and similar groups using fictitious entities. (grand jury indictment, 2026; reporting summarized in second article)

* Prosecutors claim the SPLC paid $140,000 to a former National Alliance chairman, $70,000 to a National Socialist Party leader, and $19,000 to an American Front figure. (indictment details cited in Matt Taibbi article, 2026)

* One SPLC-paid source (“F-37”) is accused of participating in planning for the 2017 Charlottesville rally while receiving roughly $270,000 over several years. (grand jury indictment summary; second article)

* The SPLC paid $3.4 million and issued a public apology after labeling Maajid Nawaz an extremist – one of the most high-profile retractions in its history. (settlement, 2018; widely reported)

* Individuals like Ayaan Hirsi Ali were labeled “anti-Muslim extremists” despite documented threats against their lives from jihadist groups. (second article; SPLC “Field Guide,” 2016)

* A Pulitzer-nominated 1992 series in the Montgomery Advertiser concluded that SPLC’s primary activity had become fundraising, often tied to expanding “hate group” classifications. (Montgomery Advertiser, 1992; referenced in Taibbi article)

* Reports have cited millions held in offshore accounts (e.g., Cayman Islands, Bermuda), while CharityWatch (a nonprofit watchdog organization) previously gave the SPLC a failing grade for hoarding funds rather than deploying them. (CharityWatch; tax filings reported 2017; second article)

* Following Charlottesville, SPLC revenue reportedly surged from about $50 million to $132 million in one year, with major corporate donations from firms like Apple and JPMorgan. (second article; donation disclosures)

* In 2012, attacker Floyd Lee Corkins targeted the Family Research Council after reportedly using the SPLC’s map. A security guard was shot. (FBI statements; widely reported case, 2012)

* Journalists like Ken Silverstein (Harper’s, 2000) and later critics have argued the SPLC inflated threats to sustain fundraising, a pattern echoed in recent “hate inflation” critiques. (Harper’s; Taibbi, 2026)

I don’t know if you have heard of Ayaan Hirsi Ali, but she is a Somali-born Dutch American public intellectual, a former member of the Dutch Parliament, and a research fellow at institutions like the Harvard Kennedy School. She has spent much of her adult life doing something that is both rare and dangerous: criticizing radical Islamist ideology from the inside, using facts, personal experience, and a fair amount of courage.

Her credibility on the subject isn’t academic in the abstract. It’s personal. In 2004, her collaborator, Theo van Gogh, was murdered in Amsterdam by an Islamist extremist. A death threat was pinned to his body – addressed to her. She has lived under armed protection ever since.

In 2016, the SPLC placed her on a list of “anti-Muslim extremists.”

Think about the timing. ISIS was still active. Terror attacks had hit Paris, Brussels, and elsewhere. Writers and cartoonists were being targeted. And in that environment, the SPLC chose to publicly categorize a woman under constant threat from jihadists as part of the problem.

No apology was issued to her.

If you want a single example that captures how far the organization may have drifted from its original purpose, it’s hard to do better than that one.

In the April 9 issue, I wrote about how AI is invading the music industry at a rate and to a degree that, even accounting for my alarmist feelings about AI, is shocking. Since then, I’ve been spending a bit of my reading/research time each day checking out what’s new in AI music. And there’s quite a bit.

One of the things we discussed at the Cigar Bar on Friday was a story I’d read in The Free Press. It was about Murphy Campbell, a singer-songwriter and banjo player from North Carolina who was eking out a modest living videotaping herself sitting on a log or a rocking chair and performing her original compositions. Her fan base was steadily increasing when, a few months ago, she noticed that songs were appearing on her Spotify page that were attributed to her, but were not hers. She hadn’t written them. She hadn’t performed them. And yet, they sounded eerily familiar.
 
She eventually realized that they were AI-generated, probably created by someone who was feeding an AI with snippets of her published songs and asking it to create other songs that were similar.
 
Understandably, this irked her. But when she received a notice that she was “sharing” royalties for these counterfeits that were being played on platforms all over the world, she was flummoxed. Who was selling this music? And what, if anything, could she do about it?
 
A few of the people in our little group on Friday had heard of this scam going on in the music industry. “It’s a new thing,” said B, “so it’s not well known. But it isn’t rare either. It’s not a huge issue right now, but it could easily become one.”
 
The problem, B explained, is that if you know what you are doing, you can feed in any sort of music you want and generate a troop of AI singer-songwriters producing and performing “original” music for you. And all you have to do is a bit of video cutting and pasting and using an AI to create a royalty-sharing contract, either with the Murphy Campbells of the world or even with your own AI avatars.
 
The conversation moved on to the potential of this – good and bad.
 
On the good side is the possibility that the music industry could grow geometrically as millions of kinda-like songs and singers are produced and promoted by thousands of AI agents working in their basements or kitchens. 
 
On the bad side is the eventual (but not that eventual) collapse of the music culture we enjoy now, with human-generated music becoming, at best, a personal hobby with very little monetizable value, and where 80% to 90% of the money made will go to musicians and dealmakers that insert themselves into the AI music industry now and figure out what needs to be done.
 
I know a few musicians and would-be musicians that either make a living or hope to make a living composing and performing their own music. Most of them are hanging on to the hope that AI will never be able to capture a large swath of the marketplace by selling fake music to real people. 
 
And maybe they will be proven right. 
 
But what if they are wrong? What will they be left with? 
 
If you are in the music industry now or would like to be in the future, you need to hedge your bet by continuing to do your own thing while learning about and even testing out AI music. You’ve got nothing but a bit of time to lose… and you’ve got an exciting and remunerative future to win.

And Eventually Replace Human Musicians? 

Since I’m on this subject for the second time in a month, I thought I would give you some outside perspectives on the questions I’ve been indirectly asking.

Four Articles Worth Reading 

* The Atlantic on how AI, algorithms, and streaming are reshaping music

* The Economist on how AI systems are generating music at scale

* The New Yorker on how major labels are experimenting with AI while trying to protect artists

* Time magazine on how AI could undermine authenticity and replace human artists if unchecked

Four Video Commentaries Worth Watching

* “AI Will Destroy the Music Industry.”

* “The Music Industry Is Turning on AI Producers.”

* “The Music Industry’s AI Takeover.”

* “Is AI music going to overshadow human music?” 

KK Isn’t Worried About AI… Here’s Why 

After reading my April 9 post on the AI music debate, KK, a longtime friend and regular reader, wrote to cheer me up with this positive take on it:

“Nice to see you writing about music, a subject near and dear to my ear. My take on AI is it will not have a formative effect on the industry. Why? Because most bands today make the bulk of their money from live shows, especially touring, ticket sales, and merchandise sold at concerts. Streaming, royalties, and licensing can add income, but they usually pay less than performances for most active bands. Gone are the days of gold records creating fortunes.

“I think of AI as an invasive plant, needing herbicides only when it’s encroached to the point of intolerance. How things eventually level out will most likely be seen by people other than you and me.

“Still, my biggest concern is AI’s use by the criminally intent. I believe the combination of Quantum computing and AI will render encryption and the blockchain obsolete (bitcoin).

“Soon to be entering my 77th year, I can only say maybe we will see it.”

My Response: KK, I understand how you feel about AI music and how it may inform your hopes for the future. I used to have the same feelings and thoughts about AI writing.

Your point about the economics of the music industry is a good one. But consider the success of The Sphere in Las Vegas, and the fact that AI music producers will be able to generate and own all the rights to their creations. All that is missing is the emotional attachment.

I was feeling something for that second AI avatar I mentioned in the April 9 issue: Morgan Luna. In my future vision, I’ll be able to send her fan mail, which she’ll respond to, letting me know that she’d like to have a chat with me online. That will become a several-weeks-long (or several-months-long) romance, if I am so inclined. And then finally – if she becomes as popular as I think she might – I’ll be able to order a robotic version of her through Amazon and have her delivered to my hotel room in 24 hours!

The downside, of course, could be unimaginably bad…

I’ve been writing a lot about AI lately.

One of the many predictions I’ve made is that one of the first business sectors that would be smashed by AI would be anything and everything related to visual media, because AIs have proven to be very good at not only replicating complex images instantly, but editing and emending them so that the end product could look as good as an analog visual, but at a small fraction of the cost.

What I didn’t anticipate, however, is how good and how quickly AI was going to get in terms of creating creative content.

I saw the following news item online yesterday:

Is This the End of Music as We Know It?

The AI-generated song “How Was I Supposed to Know?” hit #20 on BillBoard’s Hot R&B Songs chart last year. It was made using Suno, an AI music-generator platform. The popularity of the platform has catapulted Suno’s 39-year-old CEO, Mikey Shulman, into the music industry’s elite – and made him enemy number one in some circles.

You can read more about it here.

“Really?” I thought. “It hit the charts?”

I could imagine – possibly – that AI could generate a decent hip-hop or rap number. Perhaps a corny Country Western ballad. But rhythm and blues?

So, I checked it out… and I was blown away.

You can see it for yourself here – a video of the song being performed by an AI avatar who goes by the name of Xania Monet.

Xania Monet

Well, what did you think?

You can’t honestly say that it is a bad song – i.e., that the music is lame, or the singing is not spirited, or the lyrics are not as good as 90% of other R&B lyrics. I’m hardly an aficionado of the genre, but I like it and have listened to a lot of it over the years. And my impression is that while this is not Whitney Houston or Luther Vandross, it’s certainly at least “pretty good.”

Is Xania Monet Just Another Hyped-Up One-Off? 

That’s a fair question. I did a bit of searching and, in less than 30 seconds, I came upon a music video featuring a woman named Morgan Luna that, once again, blew me away. Since I wasn’t specifically searching for AI singers, my first impression was that this woman and this song must be real.

Morgan Luna

I mean, her facial expressions and the sound of her voice – they just seemed so real to me. And I wanted her to be real, because, aside from her talent, she is stunningly beautiful. In a way that is reminiscent of other beautiful Black singers that flickered through my mind.

Again, you can see it for yourself here.

Here’s the thing – what’s keeping me up at night. Had you asked me if this was possible a year ago, I would have scoffed at the idea. Had you asked me six months ago, when I started looking into the AI story in earnest, I might have said, “It might be possible, but probably not in my lifetime.”

And now, here we are.

Yes, I do think the music industry will survive. But not like it is today. It will be transformed, like almost every other aspect of our lives, in a radical way that will leave the world divided between those that lock in an inside position on the transformation and everyone else – including future Whitney Houstons – forever.

Postscript: 

This is why AI is accelerating faster than it seems.

Here are some positive possibilities.

But this is why there’s cause for concern.