Federal officials announced charges Thursday against more than a dozen people who allegedly stole about $90 million, mostly from several Minnesota social service programs.
Colin McDonald, assistant attorney general for the U.S. Department of Justice’s National Fraud Enforcement Division, told reporters during a news conference that the charges involve defendants who allegedly defrauded seven different state-run, taxpayer-funded programs. One of the programs included an embattled housing program shut down late last year; the program was initially predicted to cost about $2.6 million per year in 2020, but ballooned to more than $100 million by 2024 due to large-scale fraud, he added.
“The fraud here in Minnesota is shocking,” said McDonald, who called the defendants’ alleged efforts “systematic.” He added that they used the programs “as their personal piggybank.”
The 15 defendants – eight of whom were charged for allegedly defrauding the housing program – are all Minnesota residents and include both men and women. Five other defendants were Medicaid providers, and two others were charged for defrauding state and federal programs aimed at subsidizing child care.
The announcement came about an hour after Aimee Bock, the ringleader behind the $242 million Feeding Our Future food fraud scheme, was sentenced Thursday morning to more than 41 years in federal prison. The first charges in that case came in 2022, and involved 78 defendants obtaining money from a federal food aid program aimed at feeding children.
Credit: Dymanh Chhoun | Sahan Journal
Federal officials detailed some of the new alleged schemes carried out by the defendants, including two people – Shamso Hassan and Hanaan Yusuf – who operated Smart Therapy Autism Center, LLC. They allegedly used false autism diagnoses and kickbacks to parents to bill the government for $46.6 million. Federal officials, as well as Minnesota Attorney General Keith Ellison, allege that Hassan and Yusuf billed for services they did not provide, depriving children who actually needed the services and funding.
Ellison’s Medicaid Fraud Control Unit participated in the investigation into Hassan and Yusuf.
U.S. Health and Human Services Secretary Robert F. Kennedy Jr. said Thursday that the scheme “the largest autism fraud bust in American history.” The state predicted the cost of the program, known as the Early Intensive Developmental and Behavioral Intervention program, to cost about $38 million per year in 2020; it jumped to nearly $450 million in 2025.
“This was not a paperwork error, it was not a technical violation,” Kennedy Jr. told reporters. “This was organized theft that exploited the most vulnerable children in America.”
One defendant who ran a business that was licensed through the Integrated Community Services program, which provides housing and daily assistance to clients with disabilities, billed the government for $1.4 million in services that they allegedly did not provide.
Two more defendants allegedly defrauded $22 million via the Individualized Home Supports program meant to support disabled individuals. They allegedly used the money to expand their real estate holdings and purchase luxury vehicles.
“The common theme throughout these cases is fraudsters exploiting vulnerable programs and vulnerable people to enrich themselves no matter the consequences to the programs or to the people,” McDonald said.
McDonald also announced the expansion of the Midwest Medicaid Fraud Task Force to include Minnesota, as well as funding for 15 new prosecutors focused on catching fraudsters in Minnesota and other states deemed to have high rates of fraud. Federal officials also remarked on the quicker pace of recent fraud investigations, and vowed to normalize that pace as they increase the number of prosecutors and investigators.
Mehmet Oz, who heads the Centers for Medicare and Medicaid Services, cited the new fraud charges for the Trump administration’s deferral of $350 million in federal Medicaid funding initially slated for Minnesota. Oz said his agency is also requiring the revalidation of all providers within 14 Medicaid programs deemed “high risk,” which includes about 5,600 people.
During the news conference, FBI co-deputy director Christopher Raia played video of defendant Muhammad Omar jumping from the balcony of his fourth-floor apartment to allegedly escape federal agents during a raid Thursday morning. Omar, who is charged with allegedly stealing $3.2 million via the housing program, was arrested Thursday afternoon, according to local news outlets.
“No matter how many shell companies you have, no matter how clever or how brazen your schemes are, if you steal money from taxpayers and people in need, the FBI and our partners will pursue you relentlessly,” Raia said. “We will find you and ensure you feel the power of American justice.”
