Over $9 Billion Looted From Minnesota Medicaid Programs, Feds Say

Federal prosecutors alleged Thursday that Minnesota may have lost billions of dollars to fraud in its Medicaid program, the latest development in an ongoing investigation.

As much as half of the roughly $18 billion Minnesota has spent since 2018 on 14 Medicaid programs particularly vulnerable to abuse may have been siphoned off by fraudsters, according to U.S. Assistant Attorney Joe Thompson. Thompson made the remarks as prosecutors announced additional charges in the ongoing investigation of the “staggering, industrial-scale” fraud engulfing the state.

“The fraud is not small. It isn’t isolated. The magnitude cannot be overstated,” Thompson said.

“What we see in Minnesota is not a handful of bad actors committing crimes. It’s a staggering industrial-scale fraud. It’s swamping Minnesota and calling into question everything we know about our state.” (RELATED: Senate Hopeful Praises Tim Walz After Fraud Engulfed State On His Watch)

Minnesota Gov. Tim Walz speaks to media on September 2, 2025 in Eagan, Minnesota. (Photo by Stephen Maturen/Getty Images)

Among those charged are Anthony Waddell Jefferson and Lester Brown, who are accused of submitting roughly $3.5 million in false claims to the state’s Housing Stabilization Services (HSS) program. Federal officials allege the two men — both based in Philadelphia — set up companies to exploit Minnesota’s Medicaid system, committing what Thompson labeled “fraud tourism.”

“Minnesota has become a magnet for fraud, so much so that we have developed a fraud tourism industry — people coming to our state purely to exploit and defraud its programs,” Thompson said.

Additional charges were filed against Hassan Ahmed Hussein and Ahmed Abdirashid Mohamed, who prosecutors say submitted approximately $750,000 in fraudulent HSS claims through their company.

The Minnesota Department of Human Services terminated the HSS program in October, citing widespread fraud.

The program, originally intended to help elderly individuals and people with disabilities secure and maintain housing, was projected in 2020 to cost taxpayers about $2.6 million annually. By 2024, however, spending had ballooned to roughly $104 million.

Separately, Abdinajib Hassan Yussuf was charged with wire fraud in connection with the Early Intensive Developmental and Behavioral Intervention Autism program. Prosecutors allege Yussuf, the president and CEO of Star Autism Center LLC, and others recruited Somali children by offering kickbacks to parents in exchange for enrolling their children, then falsely billed Medicaid for services that were never delivered.

Authorities say the scheme resulted 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 total losses at over $1 billion.

In late October, Democrat Gov. Tim Walz announced that his administration would audit payments for 14 Medicaid services and pause payments for up to 90 days if anomalies were detected. The move has done little to quell public outrage, with critics saying the governor is not doing enough, and some even calling for his resignation over the scandal.

“Today’s news is possibly the most disturbing news we’ve had so far in exposing the massive schemes that defrauded Minnesotans,” said state Senate Minority Leader Mark Johnson in a statement Thursday. “Minnesota’s fraud problem is indeed Minnesota’s fraud problem. If people could easily defraud other states, they wouldn’t single out Minnesota.”

“The mounting failures by Governor Tim Walz to stop fraud is costing taxpayers more every day,” Johnson added.

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