Feds announce charges in ‘unprecedented’ Medicaid fraud scheme in Minnesota

Top Trump administration officials traveled to Minnesota on Thursday to announce federal criminal charges against 15 people for alleged fraud schemes targeting more than $90 million in Medicaid funds intended to help the state’s children, homeless and disabled.  

The charges include the two largest Medicaid fraud cases ever brought in Minnesota, federal officials said, and represent a “shot across the bow” in Trump’s “war on fraud” largely targeting blue states. 

“We’re going to protect these programs and protect vulnerable children and restore integrity to the American health care system,” said Robert F. Kennedy Jr., the secretary of U.S. Department of Health and Human Services.

Kennedy was joined by Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz, U.S. Attorney for Minnesota Daniel Rosen, FBI Co-Deputy Director Christopher Raia and other law enforcement officials to announce the indictments at the federal courthouse in downtown Minneapolis.

Acting U.S. Attorney General Todd Blanche was supposed to be present as well but stayed in Washington, D.C. to try to save the $1.776 billion “anti-weaponization” fund for Trump’s allies who Trump says were unfairly prosecuted by the Biden administration, such as the January 6 rioters. 

Colin McDonald, assistant attorney general for the National Fraud Enforcement Division, said those charged treated disabled people like “lottery tickets” to steal millions in taxpayer dollars, which they spent on luxury cars, real estate and expensive jewelry. 

“My message to the fraudsters is this: eat, drink, and be merry today because your days of frolicking and freedom are numbered,” McDonald said.

McDonald also announced the expansion of the Midwest Healthcare Strike Force team with additional prosecutors in Minnesota, and the creation of a new Medicaid strike force team with 15 attorneys across the country.

The additions come as the Department of Justice in Minnesota faces a wave of resignations of career prosecutors including former assistant U.S. Attorney Joe Thompson, who previously oversaw the sprawling investigation into social service fraud in Minnesota. The resignations were driven in part by the politicization of the Justice Department under President Donald Trump and its handling of the federal immigration crackdown known as Operation Metro Surge.

The officials at the press conference did not provide details like names or the specific charges leveled, though they did present a blurry photo of one person — Muhammad Omar — who they said is on the run; they asked for the public’s help in locating him. 

Trump administration officials reiterated their harsh criticism of the Walz administration for allowing fraudsters to raid public programs. 

Minnesota Department of Human Services Inspector General James Clark said state officials have helped the federal government build criminal cases against most of the 15 people charged. 

“We are working more aggressively than ever to prevent and stop Medicaid fraud – tightening up oversight on the front end and taking action to stop criminals. As our efforts continue, we fully expect to see more charges,” Clark said in a statement released after the news conference. 

The state agency said it has stopped payment to 636 providers based on credible allegations of fraud and made more than 300 referrals to law enforcement since Jan. 1, 2025. 

The Trump administration has threatened to cut off roughly $350 million in Medicaid payments to Minnesota in response to fraud, and Oz said on Thursday the state has still not done enough to restore funding, even though his own agency approved Minnesota’s corrective action plan.

State officials say the cuts, known as deferrals, threaten health care services for the state’s most vulnerable residents.

The programs targeted by the defendants have seen explosive growth in recent years. 

For example, spending on Early Intensive Developmental and Behavioral Intervention, a program to help children with autism, increased 5-fold, from $83 million in 2021 to $443 million in 2025. 

Two of the 15 people charged — Shamso Ahmed Hassan and Hanaan Mursal Yusuf — were allegedly connected to a scheme to defraud that program of $46.6 million and represents the largest Medicaid autism fraud case ever brought, the Department of Justice said in a press release. The defendants are alleged to have paid parents to enroll their children in the program regardless of if they needed it and then billed for services they never provided. 

“This was not a paperwork error; it was not a technical violation. This was organized theft that exploited the most vulnerable children in America, deceived families, stole taxpayer dollars meant to help children with autism access legitimate care and support,” Kennedy said.

Eight people were also charged for defrauding Housing Stabilization Services — a program to help homeless people find and maintain housing — of approximately $15.7 million.That program grew from $3.3 million when it started in 2020 to $108.8 million in 2024. The program was so rife with fraud that Gov. Tim Walz shuttered the program last fall. 

One person, Ahmed Othman Kadar, was charged with defrauding Integrated Community Supports, a program aimed at helping disabled individuals live independently. One man who was supposed to be receiving services around the clock died unattended in the care of Kadar’s company Ultimate Home Health, which was first reported by KARE11 last November. 

The news conference came an hour after a federal judge handed down a nearly 42-year prison sentence for Aimee Bock, the ringleader of what prosecutors called the nation’s largest pandemic fraud scheme, which siphoned $242 million from a federal child nutrition program through her nonprofit Feeding Our Future. Other fraudsters stole tens of millions more from the food program.

The 66 people who have been convicted in the Feeding Our Future case bought luxury cars, waterfront properties and lavish vacations.

Since the first charges in the Feeding Our Future scheme were announced in 2022, federal and state authorities have uncovered significant fraud and waste across social service programs, leading Minnesota officials to designate 14 Medicaid programs as “high risk” for fraud.

While most of the charges in the Feeding Our Future scheme were brought under the Biden administration, the Trump administration has claimed the issue as their own with a “war on fraud” led by Vice President JD Vance.

That effort has largely focused on Democratic-led states including California, New York and Maine even though federal data suggest fraud of social service programs is no less prevalent in Republican-led states.

Indeed, Trump has granted clemency to dozens of donors and supporters convicted of fraud, including those who have stolen tens of millions in Medicaid dollars. McDonald declined to answer a question about whether Bock or other convicted fraudsters in Minnesota can expect the same leniency.

At least one of the indicted individuals was featured in a viral video by conservative YouTuber Nick Shirley, who was among the press corps at Thursday’s news conference in his signature “Quality Learing Center” hoodie, a reference to an infamously misspelled sign for a daycare that Shirley filmed. Fahima Egeh Mahamud, the owner of a Minneapolis day care center called Future Leaders Early Learning Center, allegedly stole $4.6 million from Minnesota’s Child Care Assistance Program, as well as $850,000 from the federal child nutrition program. 

Oz posted a photo of himself and Shirley in a plane on the way to Minnesota and then asked Shirley to stand up to be recognized during the news conference. Shirley claimed to have uncovered more than $100 million in fraud in Minnesota’s childcare program in the video shared by Vance and Elon Musk. While that figure hasn’t been substantiated, his video nevertheless helped draw the Trump administration’s attention to fraud in the state.

Most of those charged in defrauding government-funded services in recent years in Minnesota are of Somali descent, which the Trump administration has used to justify vicious attacks on the state’s Somali population, culminating in the incursion of thousands of federal immigration agents here for Operation Metro Surge.

McDonald declined to answer a question about the conduct of federal agents during that operation, which left two Americans dead.