Minnesota fraud: Feds say more than half of $18 billion spent on Medicaid programs could be fraudulent

MINNEAPOLIS (FOX 9) - The U.S. Attorney's Office announced new charges related to fraud against the government that show the massive scale of fraud in Minnesota.

Widespread fraud in the state has garnered national attention and attacks by President Donald Trump directed at the state's Somali Community.  

The new charges are related to people accused of defrauding the government through autism and housing programs, as well as integrated community services.  

READ MORE: FBI raids Bloomington business that had license suspended for fraud

Fraud in Minnesota

What they're saying:

First Assistant U.S. Attorney Joe Thomposon spoke candidly about the scale of the fraud being uncovered in the state.

"The fraud is not small. It isn't isolated," Thompson said. "What we see in Minnesota is not a handful of bad actors committing crimes. It's a staggering industrial scale of fraud. It's swamping Minnesota and calling into question everything we know about our state."

During the conference, the U.S. Attorney's Office highlighted 14 Medicaid services that are flagged as being at a "high risk" for facilitating fraud.

The services include the following:

• Housing stabilization
• Adult companion
• Assertive community treatment
• Intensive residential treatment
• Adult day services
• Recuperative care
• Integrated community
• Peer recovery
• PCA/Community first
• Non-emergency medical transport
• Adult rehabilitative mental health
• Autism services
• Night supervision
• Individualized home

Those 14 programs have cost a total of $18 billion since 2018, including $3.5 billion in 2024 alone. Investigators are now working to determine how much of those funds were fraudulently distributed.

By the numbers:

When asked to estimate how much of the $18 billion could be fraud, Thompson said it's possible that the total could be half or more.

"I don't make these generalizations in a hasty way," said Thompson. "So I when I say a significant amount, I'm talking in an order of half or more. But we'll see. When I look at the claims data and the providers, I see more red flags than I see legitimate providers and overwhelmingly so.

When asked if more than half of the $18 billion could be fraud, Thompson confirmed: "I'm saying that's very possible."

But, Thompson says, the U.S. Attorney's Office is routinely uncovering fraud in the state. "You don't see fraud on this scale in other states. And, part of that is just, we sit here as a team, and it's a relatively small team or a relatively small U.S. Attorney's Office. And every day we look under a rock and find a new $50 million fraud scheme. That shouldn't be the case in a state of our size. Certainly other states have problems with fraud, but I think our problem is unique."

According to the United States Attorney's Office, out of the 92 people charged with defrauding child nutrition, autism and housing stability programs, approximately 62 have been found or pleaded guilty. 

Fraud schemes

Housing:

Five new charges are filed against people accused of defrauding the Housing Stabilization Services program in Minnesota.

Those include two defendants, Hassan Ahmed Hussein and Ahmed Abdirashid Mohamed, who are accused of receiving $750,000 for services they did not provide through Pristine Health LLC.

Another defendant, Kaamil Omar Sallah, tied to Safe Lodgings Inc. is accused of defrauding $1.4 million in Medicaid claims for services not provided. He is believed to have fled the country after a grand jury subpoena.

Two Philadelphia residents, Anthony Waddell Jefferson and Lester Brown, are accused of "fraud tourism" after hearing about easy money opportunities in Minnesota. 

Both are accused of defrauding $3.5 million in housing stabilization payments. 

This brings the total to 13 people charged in the state's housing stabilization program, with more expected to come. 

Autism:

Another defendant, Abdinajib Hassan Yussuf, was charged in relation to the state's Autism support program. That defendant was tied to Star Autism Center in St. Cloud and received $6 million for services that were never provided. 

Integrated Community Services:

A search warrant was served on Thursday morning in relation to suspected fraud within Integrated Community Services.

Authorities shared data that showed explosive growth in recent years, starting at $4.6 million in 2021, then $170 million in 2024 and reaching $180 million in 2025 so far.

Minnesota fraud tied to terrorism?

Dig deeper:

First Assistant U.S. Attorney Joe Thompson said, "There's no indication that the defendants that we've charged were radicalized or seeking to fund al-Shabab or other terrorist groups. Some money went to Somalia indirectly. Some money might have gotten into the hands of al-Shabab, which controls significant parts of Somalia and imposes a tax there, so that's a little more nuanced than there's no there's no indication that defendants have been sending money to terrorist organizations or were supporting terrorist organizations inthat way."

READ MORE: Minnesota fraud investigation: Treasury probes terror funding links

Federal response

The backstory:

The federal government continues to highlight Minnesota’s programs as the source of fraud.

According to U.S. Department of Justice figures prior to Thursday's announcement, there has been about $822 million in fraud from Minnesota services, including $300 million from Feeding Our Future, the possibility of nearly $220 million in autism program fraud and $302 million from the Housing Stabilization Program.

Meanwhile, Minnesota Gov. Tim Walz this month announced a fraud prevention program, which is being directed by the former head of the Minnesota Bureau of Criminal Apprehension.

READ MORE: 

• Fraud in Minnesota: Detailing the nearly $1 billion in schemes
• Education Secretary McMahon calls for Walz resignation over fraud
• Feds announce ‘targeted review’ of Minnesota unemployment, nutrition fraud