Minnesota Health Care Fraud Takedown Results in Charges Against 15 Defendants for Over $90M in Fraud

National Fraud Enforcement Division announces expansion of Health Care Fraud Section to investigate Medicaid fraud nationwide The Justice Department announced the Minnesota Health Care Fraud Takedown, which resulted in criminal charges against 15 defendants, including owners of child care centers and various Medicaid providers, for their alleged participation in various fraud schemes involving over $90 million in intended loss, including the two largest Medicaid fraud cases ever charged in the District and first-of-their kind charges involving additional Medicaid programs. “Today, we are holding scammers accountable who ripped off the American taxpayer and harmed those deserving legitimate assistance from these programs,” said Acting Attorney General Todd Blanche. “These alleged con artists stole taxpayer dollars while providing substandard care for children and abandoning at least one Medicaid recipient as they passed away. The DOJ Fraud Division, along with the White House’s Task Force to Eliminate Fraud, will dismantle illegal schemes from coast-to-coast, just as they did today in Minnesota. This is just the tip of the iceberg.” “Driven by data showing a significant increase in Medicaid fraud across the country, the 15 additional prosecutors will serve as a force multiplier for our existing Strike Forces to combat this critical new threat,” said Assistant Attorney General Colin M. McDonald of the Justice Department’s Fraud Division. “The Fraud Division is committed to supercharging the Health Care Fraud Strike Force program with the resources it needs to tackle the pervasive fraud in the health care industry and protect the vulnerable beneficiaries of these programs, including children and those suffering from chronic ailments.” “Today’s arrests mark the largest autism fraud bust in American history,” said HHS Secretary Robert F. Kennedy, Jr. “Under the leadership of President Donald Trump and Vice President JD Vance, this Administration is carrying out the most aggressive anti-fraud effort in modern American history. These criminals exploited vulnerable children, stole taxpayer dollars, and diverted critical autism care and resources away from families who truly need support, and we will continue rooting out fraud to protect children and restore integrity to America’s public health programs.” “As alleged, the defendants in this case not only attempted to steal public healthcare funds paid for by hardworking American taxpayers – but stole critical resources from families who truly needed them,” said FBI Director Kash Patel. “This FBI and our interagency partners have a mandate to investigate and systematically dismantle this exact kind of public fraud in America, which grossly abuses and mismanages money from working Americans, and that’s exactly what we’re doing. Today’s indictment is a massive moment in this effort and we’re not slowing down.” Autism Fraud In the largest Medicaid autism fraud case ever charged by the Department, two defendants were charged in connection with an approximately $46.6 million scheme to defraud the Early Intensive Developmental and Behavioral Intervention (EIDBI) program, a publicly funded Minnesota Health Care Program that offers medically necessary services to people under the age of 21 with autism spectrum disorder. In 2017, Minnesota became one of the first states to offer Medicaid coverage for EIDBI services. EIDBI claims skyrocketed from over $600,000 in 2018 to over $400 million by 2025. As alleged, the defendants paid kickbacks to parents who brought their children to autism centers, diagnosed children with autism regardless of medical necessity, and billed for autism services that were not actually provided, depriving children who did need assistance of needed care. Integrated Community Supports Fraud In the first criminal prosecution involving fraud in Minnesota’s Integrated Community Supports (ICS) program, one defendant was charged with a $1.4 million scheme to bill for services that were not provided as represented. ICS is a Minnesota Medicaid benefit designed to fill a gap in the service continuum between a person living in their own home and more restrictive settings such as group homes and assisted living. ICS was designed to help people live more independently in the community—as opposed to an institutionalized setting—with daily one-on-one help with health, safety, and household tasks so that qualifying individuals can live in the community. The defendant in the prosecution announced today submitted claims for vulnerable recipients who required 24-hour care, one of whom was found deceased a day after being billed for services he did not receive. After paying out a total of approximately $4.2 million when the ICS program began in 2021, the cost has grown to more than $183 million in 2025. In all, claims data shows that the Medicaid system has paid out more than $460 million for ICS services since 2021. A failure to provide ICS services to vulnerable Medicaid recipients who are dependent on the care to live can have deadly consequences, like those described in the charging document. “Medicaid dollars are meant to support vulnerable Americans—not bankroll luxury cars and real estate empires for fraudulent providers who exploit people with disabilities,” said CMS Administrator Dr. Mehmet Oz. “These prosecutions put Medicaid fraudsters on notice—the gravy train is over. We will cut you off, shut you down, and lock you up. They also send a clear message to the patients who depend on Medicaid and the taxpayers who fund it—this administration has your back.” “The scope of the frauds alleged in the charges announced today is staggering, not only in the amount of loss, but in the reach of the impacted programs,” said FBI Co-Deputy Director Christopher Raia. “These programs, funded by the American taxpayer, were designed to help some of the most vulnerable members of our society. As alleged in these charges, instead of helping those in need of support, the defendants took millions of dollars for their own benefit. These frauds were uncovered thanks to dedicated work by the FBI and our law enforcement partners, and we look forward to continuing to partner with the United States Attorney's Office to reign in the rampant fraud in these programs.” “Today’s takedown underscores a simple truth: Medicaid is a lifeline for vulnerable individuals, and we will not allow criminals to exploit it for personal gain. These schemes did more than steal taxpayer dollars — they robbed children with autism, adults with disabilities, and other at‑risk citizens of the essential care they rely on,” said Inspector General T. March Bell of the U.S. Department of Health and Human Services Office of Inspector General (HHS‑OIG). “HHS‑OIG, working shoulder‑to‑shoulder with our law enforcement partners, will continue to pursue those who prey on these critical programs. We will use every tool available to uncover fraud, hold offenders accountable, and safeguard the integrity of the benefits millions of families depend on.” Individualized Home Supports Fraud In the first criminal prosecution involving fraud in Minnesota’s Individualized Home Supports (IHS) program, two defendants were charged in connection with an over $22 million scheme in which they acquired over 20 separate residences and concealed their ownership interest from Medicaid. IHS was designed to help adults with disabilities such as brain injury to live independently in their own homes. Despite Medicaid prohibiting program providers from having direct or indirect financial interest in the beneficiaries’ housing, the defendants offered housing that they owned to vulnerable Medicaid beneficiaries in order to obtain Medicaid beneficiary information that they used to bill for services that were not provided as represented. Defendants used the proceeds of the scheme to acquire more real estate and further the fraud, as well as purchasing luxury automobiles and expensive jewelry. After paying out over $100 million in 2018, the IHS program grew to cost more than $700 million in 2025. Housing Stabilization Services Fraud Charges were brought against eight defendants for defrauding Housing Stabilization Services (HSS) of approximately $15.7 million. Some defendants were residents of Pennsylvania who engaged in fraud tourism, traveling to Minnesota for lucrative opportunities to commit fraud. In July 2020, Minnesota became the first state in the country to offer Medicaid coverage for HSS. The HSS Program was a Medical Assistance (that is, Medicaid) benefit designed to help people with disabilities, including seniors and people with mental illnesses and substance use disorders, find and maintain housing. By design, the HSS Program had low barriers to entry and minimal records requirements for reimbursement that combined to make the Program susceptible to fraud. Before the HSS Program’s inaugural year, DHS predicted the HSS Program would cost about $2.6 million annually. In 2021 alone, the HSS Program paid out more than $26 million in claims. That figure ballooned in the following years to over $104 million in 2024. On October 31, 2025, Minnesota shuttered HSS due to fraud, illustrating how fraudulent schemes can result in the cessation of necessary programs and deprive beneficiaries of needed care. Child Care Fraud The Department announced charges against two defendants in connection with defrauding state and federal programs designed to subsidize child care. One defendant was charged with a $425,000 fraud on the state-funded Great Start Compensation Support Payment Program (GSCSPP), which reimburses for in-classroom hours provided by teachers in staff. Another defendant was charged with a $4.6 million fraud on the federally funded Child Care Assistance Program (CCAP), which reimburses child care centers for actual child care provided. “The scale of fraud uncovered in Minnesota is alarming. HSI is fully committed to dismantling these criminal schemes and holding offenders accountable,” said Steven N. Schrank, Special Agent in Charge of Homeland Security Investigations in Minnesota. “These cases demonstrate our unwavering resolve to work with federal and state partners to root out fraud and protect those in need.” Medicaid Fraud Enhancement and Expansion of the Health Care Fraud Strike Force In connection with the Takedown, the Department announced the funding of 15 new prosecutors and associated support staff to combat Medicaid fraud across the country. Data show that Medicaid is a vital government benefit program increasingly targeted by criminals. The exposure of widespread fraud in Minnesota’s Medicaid program illustrates the insufficient nature of state enforcement alone, and the necessity of a whole-of-government approach. In the past year, the Health Care Fraud Section has surged prosecutors not only to Minnesota, but also to prosecute an over $650 million Medicaid fraud scheme in Arizona and over $270 million Medicaid fraud scheme in California. These new prosecutors will be deployed by Acting Health Care Fraud Chief Jacob Foster and Acting Principal Assistant Chief Rebecca Yuan to districts where the threat of Medicaid fraud is the greatest, including existing Strike Forces in California, Florida, New York, and Texas, as well as deployed across the country through participation in the National Rapid Response Strike Force. In addition, the Department, along with its partners from HHS-OIG and FBI, announced today the expansion of the Midwest Strike Force to include the District of Minnesota. The Midwest Strike Force previously was based in Detroit and Chicago. On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division. The core mission of the Fraud Division is to zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars. Department of Justice efforts to combat fraud support President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs. The Department of Justice’s Health Care Fraud Strike Force Program, currently comprised of nine strike forces operating in federal districts across the country, has charged more than 6,200 defendants who collectively billed federal health care programs and private insurers more than $45 billion since 2007. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. 2026 Minnesota Medicaid and Benefits Fraud Takedown Cases Filed in the District of Minnesota U.S. v. Shamso Ahmed Hassan, et al. Shamso Ahmed Hassan, 55, of Brooklyn Park, Minnesota, and Hanaan Mursal Yusuf, 25, of Brooklyn Park, Minnesota, were charged by indictment with conspiracy to commit health care fraud, health care fraud, conspiracy to defraud the United States and to make false statements related to health care matters, and money laundering in connection with a $46.6 million scheme to defraud Minnesota Medicaid’s Early Intensive Developmental and Behavioral Intervention (EIDBI) Program, of which approximately $21.2 million was paid. As alleged in the indictment, Shamso Ahmed Hassan was a shareholder in two autism centers, Smart Therapy Center and Star Autism Center, although she did not disclose their ownership interests to the Minnesota Department of Human Services as required. Defendant Hanaan Mursal Yusuf worked as a Level II provider of EIDBI services for Smart Therapy Center and was involved in operation of the center, including submitting claims for Medicaid reimbursement. Defendants Shamso Ahmed Hassan and Hanaan Mursal Yusuf paid kickbacks to families to incentivize them to send their children to Smart Therapy Center and Star Autism Center so that those centers could bill for EIDBI services in their children’s names. In fact, both Centers billed Medicaid for services that were not rendered or were not reimbursable by Medicaid. U.S. v. Charles Healey and Larsen-Guthmiller Charles Wayne Healey, 61, of Blue Earth, Minnesota, and Katherin Suzan Larsen-Guthmiller, 66, of Blue Earth, Minnesota, were charged by indictment with conspiracy to commit health care fraud and money laundering. Defendants Charles Healey and Katherin Larsen-Guthmiller operated Healey Homes. From 2021 until Healey Homes was closed by the Minnesota Department of Human Services in 2025, the defendants received $22.7 million in Medicaid reimbursements for supposedly providing Individualized Home Supports (IHS) services to vulnerable adults. But IHS services are intended to support recipients living in their own homes and are explicitly disallowed in provider-controlled settings. Despite their knowledge of this requirement, Healey and Larsen-Guthmiller owned and controlled the residences where they were purportedly providing services to Medicaid recipients. They charged recipients below-market rent in exchange for agreeing to be used to bill Minnesota Medicaid. U.S. v. Deborah Hodges Deborah Hodges, 59, of Philadelphia, Pennsylvania, was charged by indictment with one count of conspiracy to commit health care fraud and four counts of health care fraud, in connection with a scheme to submit $5.3 million in fraudulent claims to the Housing Stabilization Services (HSS) Program of Minnesota Medicaid, of which approximately $5.2 million was paid. As alleged in the indictment, Hodges used House of Heroes, Inc. (HOH), an HSS provider, to bill for in-person services that were never actually provided. In one egregious example, she billed Medicaid for in-person services provided while the Medicaid recipient was at an in-patient drug treatment program and falsified case notes to justify the claim. U.S. v. Ahmed Othman Kadar Ahmed Kadar, 22, of Rosemount, Minnesota, was charged by indictment with three counts of health care fraud and two counts of money laundering in connection with a scheme to defraud Minnesota Medicaid by billing for Integrated Community Services (ICS) that were not actually provided. As alleged in the indictment, Kadar operated Ultimate Home Health LLC, which was supposed to help people with disabilities live independently in the community rather than in an institutionalized setting such as a group home or assisted living facility. Instead, Kadar caused Ultimate to submit claims to Minnesota Medicaid that were not provided or inflated the number of hours of ICS services actually provided and resulted in Medicaid recipients failing to receive needed medical care. Specifically, Kadar failed to respond to complaints from Medicaid recipients that power had been shut off in their units, forcing them to live without heat during the winter. Kadar also billed Medicaid for ICS services purportedly provided to a recipient who was supposed to be receiving 24-hour care the day before that recipient was found deceased when, in fact, the services were not provided. In total, Kadar submitted approximately $1.4 million in ICS claims to Medicaid and was paid approximately the same amount. He then transferred $400,000 of those funds in violation of Money Laundering statutes. U.S. v. Sharmaine Meadows Sharmaine Meadows, 45, of Lake Elmo, Minnesota, was charged by indictment with three counts of health care fraud in connection with a scheme to submit over $4.3 million in fraudulent claims to the Housing Stabilization Services (HSS) Program of Minnesota Medicaid, of which nearly $3.7 million was paid. As alleged in the indictment, Meadows, owner and operator of Cradle of Love, LLC, caused the submission of false and fraudulent claims to Minnesota Medicaid for HSS services, directing her employees to bill Medicaid assigned hours per client week after week, regardless of whether services were actually provided, up to maximum available hours under the HSS program. U.S. v. Muhammad Omar and Ibrahim Abdi Muhammad Abdulqadir Omar, 32, of Roseville, Minnesota, and Ibrahim Bashir Abdi, 25, of Minneapolis, Minnesota, were charged by indictment with one count of conspiracy to commit health care fraud and four counts of health care fraud in connection with a scheme to submit $3.3 million in fraudulent claims to the Housing Stabilization Services (HSS) Program of Minnesota Medicaid, of which approximately $3.2 million was paid. As alleged in the indictment, Omar and Abdi co-owned and operated North Home Health Care LLC (NHHC) and Omar individually owned South Home Health Care LLC (SHHC). Omar and Abdi, through NHHC and SHHC, submitted claims to the HSS Program for services that they did not provide and for more services than were actually provided to Medicaid recipients. Omar and Abdi then created records falsifying the services that they claimed to have provided to Medicaid recipients and provided those records to insurers to justify their fraudulent claims. U.S. v. Jillaine Ann Mertens Jillaine Ann Mertens, 42, of Hamel, Minnesota, was charged by information with one count of wire fraud in connection with a scheme to submit fraudulent claims to the Minnesota Department of Children, Youth, and Families (DCYF), for which she was paid approximately $425,000. As alleged in the indictment, Mertens owned three childcare centers through which she submitted monthly applications to the Great Start Compensation Support Payment Program (GSCSPP) for reimbursement of in-classroom services that were never actually provided, for individuals who were not actually employed by the childcare centers. U.S. v. Candice Langley and U.S. v. Cynthia Allen Cynthia Allen, 62, of Philadelphia, Pennsylvania, and Candice Langley 46, of Philadelphia, Pennsylvania, were charged by separate informations with health care fraud conspiracy. Allen and Langley operated Cynthia Allen Servicing Company, LLC, and Candice Carene, Inc., respectively. Allen and Langley, who are Philadelphia, PA, residents, traveled to Minnesota in 2022 where they registered as Housing Stabilizations Services Program (HSS) providers, and they operated into the summer of 2025. Allen and Langley, along with other associates from the Philadelphia area, opened and operated their putatively separate companies together, including sharing office space, employees, and seeking out clients. Though they provided some services, both Langley and Allen substantially inflated their hours worked and otherwise falsified claims and supporting documentation in their submissions for payment from Minnesota Medicaid. Combined, those two companies claimed to provide HSS to almost 350 Medicaid beneficiaries for which Cynthia Allen billed approximately $2,516,025 and Candice Langley billed approximately $988,282, of which approximately $3,504,307 was paid. U.S. v. Abdulbasit Ibrahim and Mustafa Dayib Mustafa Dayib, 22, and Abdulbasit Ibrahim, 22, of Minneapolis, Minnesota, were charged by Information with health care fraud conspiracy. Together, Dayib and Ibrahim operated Vitality Health Services, LLC (Vitality). They enrolled Vitality in the HSS program and, between January 2023 and July 2025, submitted claims for services that were not rendered. For these false and fraudulent claims, they were paid approximately $975,000. U.S. v. Fahima Mahamud Fahima Mahamud, 50, of Minneapolis, Minnesota, was charged by Information with one count of wire fraud and one count of conspiracy to defraud the United States, in connection with two schemes that resulted in the theft of $5,480,329 in Federal funds. As alleged in the Information, Mahamud owned Future Leaders Early Learning Center (Future Leaders), a childcare center and Federal Child Nutrition Program food site responsible for serving food to children. As alleged in the indictment, Mahamud submitted inflated reimbursement claims to Feeding Our Future for meals purportedly served to children at Future Leaders. Through these claims, Future Leaders obtained approximately $854,000 in Federal Child Nutrition Program funds. However, Mahamud only used a fraction of the reimbursements to purchase food. Instead, she diverted the funds to buy real estate. Separately, Future Leaders also submitted claims to the federally funded Child Care Assistance Program for reimbursement of childcare expenses. She repeatedly certified that she was collecting statutorily mandated co-payments, meant to ensure that families were paying their fair share of childcare expenses, but failed to do so. As a result, Future Leaders received approximately $4.6 million to which it was not entitled.