Prosecutors say ‘significant portion’ of $18B in Minnesota Medicaid claims may be fraudulent; new charges announced

MINNEAPOLIS, Minn. (Northern News Now) - Federal prosecutors on Thursday announced new charges and an expanding investigation into what they described as an “industrial-scale” fraud that has exploited multiple Minnesota Medicaid programs and may have cost taxpayers billions.

Joe Thompson, the first assistant U.S. attorney for the District of Minnesota, spoke for U.S. Attorney Dan Rosen, who was out of the country getting married. Thompson was joined by investigators from the U.S. Attorney’s Office, the FBI, the Department of Health and Human Services Office of Inspector General, IRS Criminal Investigation, and Homeland Security Investigations.

“This is not a handful of bad actors,” Thompson said. “It is a staggering, industrial-scale fraud that has swamped Minnesota.” He said the Centers for Medicare & Medicaid Services pulled claims data dating to 2018 for 14 flagged waiver programs and found those programs have cost Medicaid about $18 billion since 2018, including more than $3.5 billion in 2024 alone.

Thompson said a “significant portion” of the $18 billion could be fraudulent and suggested it might be “in the order of half or more,” but he urged caution, saying precise loss figures will depend on ongoing investigations and audits.

The new charges stemmed mainly from investigations into the state’s Housing Stabilization Services and autism service centers programs.

Among the new and ongoing cases detailed Thursday:

• Pristine Health LLC: Owners Hassan Ahmed Hussein and Ahmed Abdirashim Mohammed are accused of submitting fraudulent claims to the Housing Stabilization Services program and obtaining more than $750,000, which prosecutors say was spent in part on international travel.
• Safe Lodgings Inc.: Owner Camille Omar Salah is accused of submitting more than $1.4 million in fraudulent Housing Stabilization claims and using proceeds to purchase more than $150,000 in cryptocurrency. Prosecutors said Salah fled the country after receiving a grand jury subpoena.
• Runner LLC and Retzel Real Estate LLC: Operators Anthony Waddell Jefferson and Lester Brown, residents of Philadelphia, were described as examples of “fraud tourism” — out-of-state actors who enrolled businesses in Minnesota’s Housing Stabilization program, returned home and billed Minnesota Medicaid for services they did not provide, netting more than $3.5 million.
• Star Autism Center: Abney Najib Hassan Yousef was unsealed as a defendant in an early intensive developmental and behavioral intervention (EIDBI) autism fraud case. Prosecutors say he paid kickbacks to parents to have children diagnosed with autism, billed for EIDBI services that were not provided, received more than $6 million in Medicaid funds and sent more than $200,000 to Kenya.

Thompson said five new defendants were charged in connection with Housing Stabilization Services; to date, 13 people have been charged in that investigation, and additional charges are expected in the coming weeks and months.

Also on Thursday, Thompson said Asha Farah Hassan, owner of Smart Therapy LLC, pleaded guilty in a case connected both to the EIDBI autism program and to the federal child nutrition program known as Feeding Our Future.

Prosecutors say companies tied to Hassan received more than $14 million in Medicaid payments and more than $450,000 in federal child nutrition funds.

Restitution and sentencing matters were discussed at the plea; Thompson noted guideline loss ranges of roughly $9 million to $25 million and mentioned restitution figures in that ballpark.

Investigators outlined recurring patterns: shell companies created to bill for services that were never provided; providers obtaining apartments or condos, placing qualified beneficiaries there, and billing hundreds of dollars per day per client; and operators standing up multiple entities to bill multiple programs.

Thompson said that the pattern differentiates these Minnesota cases from traditional Medicare or Medicaid fraud, such as upcoding: instead of padding bills, some entities appear to have been created solely to submit fraudulent claims.

Thompson also singled out exponential growth in the state’s Integrated Community Supports program, known as ICS. Launched in Minnesota in 2021 to help people with disabilities live more independently, the program’s payments rose from $4.6 million in 2021 to more than $170 million in 2024 and were on pace to reach nearly $180 million in 2025 through September. Since 2021, Medicaid payments to ICS providers have exceeded $400 million, Thompson said.

State officials have taken emergency steps in response to the investigations, including a 90-day payment suspension for the 14 flagged programs, ordering third-party audits of providers, and canceling the Housing Stabilization Services program. Federal agents executed search warrants on Thursday related to the ICS probe.

Thompson acknowledged the need for regulatory and auditing work to determine the full monetary loss. “We prosecute people, not dollars,” he said, noting forensic accountants and regulators will be necessary to quantify losses.

The Justice Department has pledged support, Thompson said, and prosecutors have recovered roughly $60 million to $70 million in the Feeding Our Future indictments, including about $30 million in cash and the remainder in real estate and vehicles.

Thompson noted that money in several cases was traced overseas, largely to East Africa and Kenya, where investigators say some funds were used to buy real estate, including multiunit buildings in Nairobi.

Thompson also partially dispelled claims that fraudulent money was funding terrorism overseas, though he didn’t rule out the possibility that money has indirectly ended up with terror groups.

“There’s no indication that the defendants that we charge were radicalized or seeking to fund al Shabaab or other terrorist groups,” he said, “Some money went to Somalia. Indirectly, some money might happen into the hands of Al Shabaab.”

Thompson said investigators would continue bringing criminal charges, seizing assets where possible, and working with state regulators to shut off improper payments and pursue restitution.

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