The U.S. attorney in Minnesota announced charges against eight Somali migrants connected to $8.4 million in Medicaid billing fraud hidden inside a state-funded housing program.
U.S. Attorney Joseph Thompson announced Thursday that an investigation found that the eight suspects provided Medicaid with long lists of “clients” who they claimed to have worked with to enroll into Minnesota’s Housing Stabilization Service and billed Medicaid for this work. But, investigators say that no such work was ever performed and the clients were fictional.
The HSS fraud only adds to the growing number of fraudulent and mismanaged state programs, including the hundreds of autism clinics that wasted tens of millions in state tax dollars, and the $250 million fraud in a coronavirus relief program that was supposed to pay for food for children.
“Most of these individuals did not receive the stable housing they so desperately needed,” Thompson said during a Thursday press conference said. “The money was just simply stolen.”
The U.S. attorney added that Thursday’s announcement represented “just the first round of indictments” connected to the fraud scheme, and said future charges will come in “waves.”
The eight men charged with wire fraud include, Moktar Hassan Aden, 30, Mustafa Dayib Ali, 29, Khalid Ahmed Dayib, 26, Abdifitah Mohamud Mohamed, 27, Christopher Adesoji Falade, 62, Emmanuel Oluwademilade Falade, 32, Asad Ahmed Adow, 26, and Anwar Ahmed Adow, 25.
“I want to be clear on the scope of the crisis. What we see are schemes stacked upon schemes, draining resources meant for those in need. It feels never ending. I have spent my career as a fraud prosecutor and the depth of the fraud in Minnesota takes my breath away. The fraud must be stopped,” Thompson said.
The investigation into the Minnesota Housing Stabilization Service (HSS), which was launched in 2020, quickly became mired in more than $104 million in fraud.
The crime-racked housing program was meant to help people with disabilities and the elderly purchase and maintain a home. But authorities soon found out that the program ended up being no less than a “massive scheme to defraud” the state, according to a filing made in a federal court by federal investigators.
The program was originally estimated to cost state taxpayers $2.5 million annually when it launched in 2020, but by its second year it had already ballooned to $21 million. And as 2024 came to a close it had soared to an outrageous $104 million.
FBI investigators said that the program was “extremely vulnerable to fraud.”
“Since Minnesota became the first state to offer Medicaid coverage for Housing Stabilization Services, dozens of new companies have been created and enrolled in the program,” reads the federal search warrant served on the Minnesota Department of Human Services. “These companies, and the individuals that run them have taken advantage of the housing crisis and the drug addiction crisis in Minnesota to prey on individuals who need help getting on their feet as they recover from drug addiction.”
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