Ryan Thorpe, Christopher F. Rufo:
Costs quickly spiraled out of control. In 2021, the program paid out more than $21 million in claims. In the following years, annual costs shot up to $42 million, then $74 million, then $104 million. During the first six months of 2025, payouts totaled $61 million.
On August 1, Minnesota’s Department of Human Services moved to scrap the HSS program, noting that payment to 77 housing-stabilization providers had been terminated this year due to “credible allegations of fraud.” Joe Thompson, then the Acting U.S. Attorney for the District of Minnesota, went even further, stating that the “vast majority” of the HSS program was fraudulent.
On September 18, Thompson announced criminal indictments for HSS fraud against Moktar Hassan Aden, Mustafa Dayib Ali, Khalid Ahmed Dayib, Abdifitah Mohamud Mohamed, Christopher Adesoji Falade, Emmanuel Oluwademilade Falade, Asad Ahmed Adow, and Anwar Ahmed Adow—six of whom, according a U.S. Attorney’s Office spokesperson, are members of Minnesota’s Somali community. Thompson made clear that this is just the first round of charges for HSS fraud that his office will be prosecuting.
“Most of these cases, unlike a lot of Medicare fraud and Medicaid fraud cases nationally, aren’t just overbilling,” Thompson said at a press conference announcing the indictments. “These are often just purely fictitious companies solely created to defraud the system, and that’s unique in the extent to which we have that here in Minnesota.”
Thompson said many firms enrolled in the program “operated out of dilapidated storefronts or rundown office buildings.” The perpetrators often targeted people recently released from rehab, signing them up for Medicaid services they had no intention of providing. He noted many owners of companies engaged in HSS fraud had “other companies through which they billed other Medicaid programs, such as the EIDBI autism program, the . . . Adult Rehabilitative Mental Health Services program, the . . . Integrated Community Support program, the Community Access for Disability Inclusion . . . program, PCA services, and other Medicaid-waivered services.”
“What we see are schemes stacked upon schemes, draining resources meant for those in need. It feels never ending,” Thompson said. “I have spent my career as a fraud prosecutor and the depth of the fraud in Minnesota takes my breath away.”
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In 5 years one line item of Medicaid in one state goes from $3 million to $399 million, and there are still people in my replies adamant that there’s little to no fraud in the system