MN fraud: DOJ announces fraud charges against 15 people, suspect on run

MINNEAPOLIS (FOX 9) - The U.S. Department of Justice announced a major fraud indictment in Minnesota, with charges being handed up against 15 people for fraud targeting $90 million in taxpayer funds.

15 people facing charges

What we know:

Assistant Attorney General Colin McDonald said a grand jury handed up an indictment charging 15 people for fraud that targeted over $90 million in taxpayer dollars.

The fraud targeted seven Medicaid programs, including Minnesota's Housing Stabilization program, the autism program, Integrated Community Support, and the state's Individualized Home Supports program.

Suspect on the run

Local perspective:

Officials said one of the fraud suspects is on the run. Authorities say the suspect leaped from a fourth-story balcony as authorities attempted to make an arrest Thursday morning.

Authorities identified the suspect as Muhammad Omar. Court records show Omar is charged with a count of conspiracy to commit health care fraud, and four counts of health care fraud.

Prosecutors say he worked with another man, Ibrahim Bashir Abdi, to create North Home Health Care, and Omar opened another company, South Home Health Care. The companies were registered with Minnesota's Housing Stabilization program.

Authorities say the men would falsify and inflate the number of service hours provided by North Home. Officials say some of the patients they were reportedly caring for were actually hospitalized and others were dead. Omar and Abdi pocketed $3.2 million based on those false claims. Omar received an additional $480,000 in claims from South Home.

The men sent some of the money overseas to buy property in Kenya.

The FBI is asking anyone with information on Omar's whereabouts to call the FBI at 1-800-CALL-FBI or submit a tip online at tips.fbi.gov.

Abdi is facing the same counts as Omar in the case.

Dr. Oz says Minnesota programs got ‘out of control’

What they're saying:

Sec. Kennedy and Centers for Medicare and Medicaid Services Administrator Dr. Oz blasted Minnesota for programs that got out of control.

Sec. Kennedy highlighted how budgets for many programs exploded during the pandemic.

"This was the cost of the early intervention development program in 2020. It was $38.1 million. This is what we expected to be paying every year," explained Sec. Kennedy. "Instead, this year it hit $442 million. ... [That's] the magnitude of the fraud and the damage that we're talking about today."

"It got so out of hand, that there was panic setting in," said Dr. Oz. "It was at that point that we re-engaged the process and realized there were programs that had been created here with massive spending that had increased so rapidly that there's no way to save the program."

Assistant Attorney Colin McDonald also referenced the Housing Stabilization program, which started with a budget of $2.5 million but ended up at almost 50 times that budget at $104 million by 2024. The state ultimately terminated the program last year.

Dr. Oz also highlighted testimony from Faye Bernsetein, a former Minnesota DHS employee, who said there was a fear of being accused of racism if they took action on fraud complaints. Bernstein testified Wednesday at a Senate hearing on Minnesota fraud.

RFK Jr. calls it ‘organized theft’

Big picture view:

Health Secretary Robert F. Kennedy Jr. said Thursday's indictment was the largest autism fraud bust in American history.

"This was not a paperwork error," said Sec. Kennedy. "It was not a technical violation. This was organized theft that exploited the most vulnerable children in America, deceived families, stole taxpayer dollars meant to help children with autism access legitimate care and support."

Suspect charged

What we don't know:

Other than Omar, the Department of Justice did not identify the 15 suspects facing charges. Some fraud indictments have come down through federal court records, but it's unclear if these are specifically part of the government announcement.

Nine were unsealed on Wednesday, including two suspects accused of day care fraud.

• Deborah Hodges is charged with conspiracy to commit health care fraud and health care fraud for allegedly orchestrating a scheme from Pennsylvania that fraudulently billed Medicaid approximately $5.3 million for Housing Stabilization Services that were inflated, ineligible, or never actually provided. Authorities say Hodges worked with at least two unnamed co-conspirators and others to commit the crimes.
• Ahmed Othman Kadar faces health care fraud and money laundering charges after his company allegedly defrauded Medicaid of roughly $1.4 million by billing for Integrated Community Supports for services not provided, including care for a patient who was ultimately found dead.
• Charles Wayne Healey and Katherin Suzan Larsen-Guthmiller are indicted for conspiracy to commit health care fraud and money laundering for allegedly defrauding Individualized Home Supports. The suspects are accused of billing Medicaid for $22.7 million in fraudulent claims.
• Shamso Ahmed Hassan and Hanaan Mursal Yusuf are charged with conspiracy to commit health care fraud, health care fraud, and money laundering for running a scheme against the state's autism program that billed Medicaid $46.6 million (receiving $21.1 million) for unnecessary or unprovided services. The suspects are accused of paying kickbacks for children in the program.