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'Fraud tourists' to plead guilty to Minnesota Medicaid scheme

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Published  January 9, 2026 7:32pm CST
Investigators
FOX 9
Guilty plea expected in MN fraud tourism scheme

Guilty plea expected in MN fraud tourism scheme

A guilty plea is expected for in the fraud tourism scheme in Minnesota. FOX 9 Investigator Paul Blume has more. 

The Brief

    • Two men from Philadelphia are accused of traveling to Minnesota to take advantage of "easy money" through the state’s Medicaid programs.
    • The FOX 9 Investigators confirmed both men will plead guilty during plea hearings scheduled for next month.
    • Authorities allege the pair’s scheme involved $3.5 million in fraudulent Medicaid billing.

MINNEAPOLIS (FOX 9) -  Two men from Philadelphia will plead guilty to federal fraud charges in a scheme authorities dubbed "fraud tourism" in Minnesota’s ongoing public assistance fraud crisis, the FOX 9 Investigators confirmed.

What we know:

Federal prosecutors charged Anthony Jefferson and Lester Brown, both from Philadelphia, with exploiting the state’s social service programs to line their own pockets.

What's next:

Jefferson and Brown have plea agreement hearings scheduled in U.S. District Court in downtown Minneapolis on February 9.

The FOX 9 Investigators confirmed both men will plead guilty.

What they're saying:

Jefferson’s defense attorney, Christa Groshek said her client is cooperating with the government and is "taking responsibility for his actions."

The U.S. Attorney’s Office did not respond to the FOX 9 Investigators' request for comment.

At the time they were charged in December, Joe Thompson, First Assistant U.S. Attorney, stated, "These defendants came here not to enjoy our lakes. Our beautiful summers and warm people. They came here because they knew and understood that Minnesota was a place where taxpayer money could be taken with little risk and few consequences."

Thompson said the men rented office space in Minnesota, registering a pair of companies, Chozen Runner LLC and Retsel Real Estate LLC, and enrolled them in the HSS program, but largely billed the state from more than 1,000 miles away.

"My understanding is they lived in Philadelphia, and they came here to enroll patients," explained Thompson. "And then they, whatever services they, whatever forms they submitted, they submitted from their homes in Philadelphia."

The two men allegedly marketed themselves as "The Housing Guys," and targeted shelters and Section 8 housing to enroll individuals in the Housing Stabilization Services (HSS) program.

Prosecutors say they used inflated billing practices to defraud the state of $3.5 million.

Minnesota’s Department of Human Services previously ended the HSS program because of widespread fraud.

The backstory:

The HSS program was a taxpayer-funded benefit aimed at helping people, including the elderly with disabilities, mental health issues, and substance-use disorders find and maintain housing. The program experienced explosive growth in spending over recent years.

According to data provided by the U.S. Attorney’s Office, the program went from $27.7M in Medicaid funding in 2021 to $105.3M in 2024. 

InvestigatorsFraud in Minnesota