Federal authorities in Minnesota announced new charges Thursday in a fraud scandal that has drawn national attention — and warned that the scope appears far larger than previously understood.
“Minnesotans and taxpayers deserve to know the truth of the fraud,” First Assistant U.S. Attorney Joe Thompson said at a press conference. “The fraud is not small. It isn’t isolated. The magnitude cannot be overstated. What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering industrial-scale fraud. It’s swamping Minnesota and calling into question everything we know about our state.”
Thompson said investigators have identified fraud concerns in 14 programs that have collectively cost taxpayers $18 billion since 2018.
When a reporter asked how much of that $18 billion is believed to be fraudulent — with prior reports suggesting the figure could be around $1 billion — Thompson indicated investigators expect the number to rise as cases move forward.
“I think a significant portion,” he said.
Later, he added, “When I say significant, I’m talking in the order of half or more. But we’ll see.”
New Defendants Charged in Housing Services Case
Thompson announced that six new defendants have been charged in connection with alleged fraud tied to Minnesota housing services.
According to prosecutors, two defendants collected $750,000 rather than helping Medicaid recipients secure stable housing. Authorities allege the funds were used for international travel, including trips to London, Istanbul and Dubai.
Thompson also described a defendant accused of submitting $1.4 million in fraudulent claims, with some of the money allegedly used to purchase cryptocurrency. Federal officials say the defendant fled the country after receiving a subpoena.
The new charges follow earlier allegations: eight people were charged in September for their alleged roles in a scheme involving the Minnesota Housing Stability Services Program.
Thompson said two defendants sent significant sums overseas to Kenya — including more than $200,000 in one case.
“There’s been a significant amount of money sent abroad, mostly to East Africa, much of it to Kenya and to Nairobi,” he said, adding that investigators traced much of the money to real estate purchases in Nairobi. He also referenced the “large Somali diaspora” in those areas.
Prosecutors also identified a new defendant accused of defrauding a separate state-run, federally funded program that provides services for children with autism. Authorities allege he submitted millions of dollars in claims for Medicaid reimbursement. Officials also said that a woman previously charged in connection with that program pleaded guilty Thursday morning.
Thompson claimed two of the defendants did not live in Minnesota but came from Philadelphia because “they heard that Minnesota and its housing stabilization services program was easy money.”
“What we’re seeing is programs that are just entirely fraudulent,” Thompson said. “These aren’t companies that are providing some services, but overbilling Medicare, Medicaid. These are companies that are providing essentially no services. They’re essentially shell companies created to defraud the program created to submit on a wholesale level, fraudulent claims for services that aren’t necessary and are provided.”
In a press release, defendants were identified as Abdinajib Hassan Yussuf, Anthony Waddell Jefferson, Lester Brown, Hassan Ahmed Hussein, Ahmed Abdirashid Mohamed, and Kaamil Omar Sallah.
Minnesota’s fraud crisis has come under sharper scrutiny in recent weeks, as the Trump administration and Minnesota Republicans have criticized the state’s elected officials over a scandal that authorities say dates back to at least 2020. The alleged fraud involves billing across a wide range of government services and has been described as affecting multiple communities, including — but not limited to — the state’s Somali community.
“When I was on the Feeding Our Future case, the big thing that jumped out to me was, honestly, how easy this fraud was to do,” former federal prosecutor Joe Teirab, who worked on the Feeding our Future investigation, recently told Fox News Digital.
“I mean, these fraudsters were just saying that they were spending all this money on feeding kids, and they were just making up these PDFs, putting false names into Excel sheets. I could do that in five minutes on a computer if I had absolutely no conscience.”
The Trump administration has launched additional efforts to investigate the issue at the federal level, and Fox News Digital first reported that Education Secretary Linda McMahon had sent a letter to Walz calling on him to resign over the scandal.
“It’s been allowed to go on for far too long, and we need to do whatever we can to stop it in its tracks,” Thompson said at the press conference.
