While President Donald Trump’s administration hammers Maine over alleged Medicaid fraud, state prosecutors are frustrated by federal delays in two cases involving nearly $2 million in potential losses to taxpayers.
Attorney General Aaron Frey’s office has made “multiple inquiries” about the cases and was “awaiting an update,” according to a September report the office mistakenly sent to multiple news outlets Thursday. The federal investigators who once worked these cases are gone. A key Scarborough office closed by 2024, a Bangor Daily News review found.
The stalled cases and shrinking federal presence undercut the Trump administration’s monthslong campaign casting Maine as the next Minnesota, where federal prosecutors have charged dozens in sprawling Medicaid fraud schemes. But some of the state’s own fraud cases now depend on federal prosecutors deciding whether to act.
In a July letter to Frey, the agency’s inspector general, T. March Bell, faulted Maine for a drop in Medicaid fraud prosecutions, from four in fiscal year 2024 to none in 2025. He conceded “staffing limitations and vacancies in Maine” were part of the problem, although he said many of his investigators have good relationships with states where they have no presence.
A spokesperson for the inspector general’s office declined to comment.
On Friday, the Trump administration announced an audit of MaineCare. The stakes are significant for Maine. The federal government pays roughly 60% of the $4.7 billion MaineCare program, yet federal prosecutors have not filed a criminal healthcare fraud case in the state since 2019, according to court records reviewed by the BDN.
The inspector general’s Maine presence dates back to at least 2007, when the federal government leased space in a Scarborough office building, according to a lease agreement with the building’s management company on file with the town.
Blueprints from 2007 and 2017 identify it as the agency’s Maine field office. Agents worked there until at least 2023, federal court records show. In 2024, the town issued a new certificate of occupancy for the space to a business, according to Scarborough code enforcement records.
It is unclear when the last agent assigned to Maine left. One of them, Brian Pellerin, departed in 2023 to become chief deputy of the Cumberland County Sheriff’s Office.
The attorney general’s erroneously released report describes the two stalled investigations as part of a larger group of cases with similar allegations that federal prosecutors are weighing for possible civil or criminal action. It does not say how many cases are in that group or when they were referred and the office declined to comment.
The office of Maine U.S. Attorney Andrew Benson, a Trump appointee, also declined to comment on the cases. Federal regulations restrict state authorities from independently pursuing cases that may be of federal interest until state action has been approved.
The sharp federal criticism of Maine dates back at least to February, when Dr. Mehmet Oz, who leads the Centers for Medicare and Medicaid Services, wrote to Gov. Janet Mills asking how the state was addressing fraud. In a video, Oz warned that Maine could become “another Minnesota,” referring to the widespread fraud cases there.
Vice President JD Vance blamed Mills for failing to crack down during a May visit to Bangor. In August, Oz said 90% of Maine’s Medicaid billing was fraudulent without citing a source. Maine’s rate of improper payments, which include documentation errors and are not the same as fraud, is 2.4%, less than half the national average of 6.1%, according to the state.
Mills has dismissed criticism as political and said her administration pursues fraud in coordination with federal authorities. The Maine Department of Health and Human Services said it refers credible allegations to law enforcement, including the attorney general’s office.
The two stalled investigations involve southern Maine companies that bill MaineCare. The report describes allegations, not charges. The BDN is not naming the companies in the leaked memo because it has not independently confirmed they are under investigation.
The report alleges phony billing, billing for services MaineCare does not cover, services by at least one provider whose certification had lapsed, and progress notes that did not match what was billed.
MaineCare spending has grown by 21% since the end of the 2023 fiscal year. There’s been a particular expansion in its largest program: providing in-home care for people with disabilities. In response to federal scrutiny, the state highlighted nine providers, most of them home-care agencies, that it had recently cut off from MaineCare payments over allegations of fraud or patient safety concerns.
In 2024, a new tenant moved into the Scarborough space the inspector general’s office once called its Maine office. It’s a home health care agency, which has not faced those allegations.
