Acting U.S. Attorney Joe Thompson announced initial charges on Thursday, Sept. 18, for what he said is a “massive” fraud scheme coming out of the state’s housing stabilization program.
On July 16, the FBI raided companies suspected of providing fraudulent services under the 2020-established Housing Stabilization Services program, designed to help seniors and people with disabilities, including mental illness and substance use disorders, find and maintain housing. On Aug. 1, the Minnesota Department of Human Services announced it was moving to terminate the program altogether.
Initially, HSS was expected to cost $2.6 million annually. The program has ballooned in cost to $310 million in total since 2020, according to reports from DHS as of Aug. 22. Thompson said Thursday that of the hundreds of millions of dollars, “most of it’s fraud, as far as I can tell.”
“Minnesota is drowning in fraud. Many of the owners of housing stabilization services companies had one or more other companies through which they billed other Medicaid programs,” he said. “The level of fraud in these programs is staggering. Unfortunately, our system of ‘trust but verify’ no longer works. These programs have been abused over and over to the point where the fraud has overtaken the legitimate services.”
The charges, which Thompson said would be filed Thursday, are against Moktar Hassan Aden, 30; Mustafa Dayib Ali, 29; Khalid Ahmed Dayib, 26; and Abdifitah Mohamud Mohamed, 27. All four are allegedly affiliated with Brilliant Minds LLC.
Also charged are Christopher Adesoji Falade, 62; Emmanuel Oluwademilade Falade, 32, with Faladcare Inc.; Asad Ahmed Adow, 26, with Leo Human Services LLC; and Anwar Ahmed Adow, 25, with Liberty Plus LLC.
“They identified vulnerable individuals, Medicaid-eligible individuals, many of whom were being released from drug or alcohol rehab facilities, they signed them up to receive housing stabilization services … purportedly to help them find stable housing, and then they … billed Medicaid for services they did not actually provide,” Thompson said.
Of those who have received services from HSS between July 2020 and June 2024, DHS reports 85% lived in the seven-county Twin Cities metro area, 37% or 12,242 individuals identified as Black, with 35% or 11,564 individuals identifying as white.
Thompson said the eight charges announced Thursday are just the beginning, and that his office and other partners are investigating “hundreds” of companies. He added that the overlap in this investigation with Feeding Our Future is “significant.”
“I think it’s fair to say that most of these health care fraud investigations, including the autism one and this one, essentially grew out of the Feeding Our Future investigations, through which we saw bank records routinely where people were purporting to serve meals to 1000s of kids a day, and they’re also purporting to run an autism clinic,” he said.
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