Housing advocates say fraud in industry hurts good providers, clients and taxpayers

The ripple effects of housing stabilization fraud

Housing advocates are concerned over the ripple effects of housing stabilization fraud. FOX 9's Maury Glover has the story.

MINNEAPOLIS (FOX 9) - The Minnesota Department of Human Services (DHS) stopped payment to dozens of providers because of fraud allegations. But some legitimate providers say they are doing things the right way.

‘Keys and leases’ 

What we know:

Dr. Kirstin Bratt-Johnson helps people with disabilities find and keep stable housing, through the company she co-owns, Nexa Home Connect.

But now the industry she's called home for the last two years is in turmoil after allegations of widespread fraud.

"Fraud in any social service is really just, you're stealing from the most needy people that we have," said Bratt-Johnson.

‘It’s a betrayal of the whole state'

The backstory:

DHS says it wants to pull the plug on Housing Stabilization Services (HSS), after the FBI raided a number of homes and businesses, where they say providers billed Medicaid for millions and never actually did any work.

But Bratt-Johnson says ending the program gives the entire industry a black eye.

"We know that our accountability measures are strong, and that we're really super careful with all of our billing," said Bratt-Johnson.

Bratt-Johnson says DHS has told Nexa, which has about a dozen employees, to continue to operate and accept new clients.

But she worries ending HSS will cause people who use it to lose hope.

"It's just disconcerting for people. If they are receiving services, can they trust us?" said Bratt-Johnson.

Reimagining HSS

What they're saying:

Bratt-Johnson says she's in favor of reforming the program with more accountability and less fraud, as long as it doesn't lead to an increase in red tape.

"We want it to continue, We want it be in its best possible form," said Bratt-Johnson.