MINNEAPOLIS — Federal officials on Thursday announced charges against 15 people who allegedly targeted over $90 million from seven state-managed Medicaid programs.
The latest cases are “unprecedented” and include the highest loss amount ever charged in a Medicaid case in Minnesota and the largest autism fraud scheme ever charged by the U.S. Department of Justice, said Colin McDonald, assistant attorney general for the DOJ’s new division for national fraud enforcement, during a news conference at the federal courthouse in Minneapolis.
“The fraud here in Minnesota is shocking,” McDonald said, adding the seven state-managed programs “have been systematically pilfered by fraudsters who treated Minnesota-run programs as their personal piggy bank.”
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The charges also include the first cases against childcare providers since federal authorities served search warrants late last month at nearly two dozen autism and childcare centers across Minnesota.
Other cases relate to the now-shuttered Housing Stabilization Services program, which helped people with disabilities and addiction issues at risk of homelessness pay for housing, and the Individualized Home Supports program, which was meant to support individuals with disabilities who want to live in their own homes.
“Instead, these disabled individuals were used like lottery tickets by these defendants to generate millions of dollars, which these defendants used to expand their real estate holdings, purchase luxury vehicles and splurge on expensive jewelry,” McDonald said.
The announcement followed the sentencing of Feeding Our Future founder Aimee Bock, who in the same courthouse received more than 41 years in prison for her role in a $250 million fraud scheme that prosecutors said was the nation’s single largest against COVID-19 relief programs.
Other top U.S. officials on hand to announce the latest charges included Health and Human Services Secretary Robert F. Kennedy Jr. and Mehmet Oz, administrator for the Centers for Medicare and Medicaid Services.
Daycare, autism fraud
Among those caught up in the newest charges is Fahima Egeh Mahamud, a 50-year-old Edina woman who ran Future Leaders Early Learning Center, a Minneapolis site featured in a viral video by Nick Shirley exposing alleged fraud.
Mahamud, who in February was charged with wire fraud for her alleged involvement in the Feeding Our Future meal fraud scheme, now has the distinction of being among the first to be charged in connection with this year’s federal investigations into the state’s daycare facilities.
Court documents unsealed Wednesday accuse Mahamud of netting $4.6 million in fraudulent reimbursements through the federally funded Child Care Assistance Program, administered by the Minnesota Department of Human Services, between October 2022 and December 2025.
The February court documents allege Mahamud received $854,000 in Federal Child Nutrition Program reimbursements during the first six months of 2021 under a sponsorship of Feeding Our Future, with “only a fraction” of that money going toward food.
In another case, defendants Shamso Ahmed Hassan and Hanaan Mursal Yusuf developed a scheme to defraud the state’s Early Intensive Developmental and Behavioral Intervention — an autism healthcare program — by paying kickbacks to parents who fraudulently used autism centers to diagnose children with autism regardless of medical necessity, and billing for services not actually provided, court documents say.
Hassan and Yusuf were part owners of Smart Therapy Center in Minneapolis and Star Autism Center in St. Cloud, businesses that submitted $46.6 million in fraudulent claims, for which they were reimbursed $21.1 million.
“Today’s arrests represent the largest autism fraud bust in American history,” Kennedy said. “This was not a paperwork error. It was not a technical violation. This was organized theft that exploited the most vulnerable children in America.”
‘Reprehensible behavior’
Earlier this month, the Centers for Medicare and Medicaid Services implemented a six-month, nationwide moratorium on new Medicare enrollment for hospices and home health agencies.
According to Oz, total Medicaid spending has increased by 50% since the start of COVID, which caused a lack of oversight.
“The kinds of reprehensible behavior that we’ve identified with the individuals (charged this week) are bribing parents to lie that their children have autism,” Oz said. He added that the diagnosis will be with them “for the rest of their lives. As a physician, that bothers me to my core.”
Thursday’s announcement by DOJ officials was the first since mid-December, when then-Assistant U.S. Attorney Joe Thompson said he believed “a significant amount” of the $18 billion paid out by 14 “high-risk” Medicaid-funded programs since 2018 was lost to fraud — possibly half or more. A few weeks later, Gov. Tim Walz disputed that estimate.
McDonald, when asked whether the figure still stands, said, “I wouldn’t be surprised if that number is accurate, or even small. But today, the collection of cases reaches $90 million in intended loss from the pockets of the taxpayer. And like I said, we’re just getting going.”
McDonald said the Department of Justice brought in 11 prosecutors from across the country this year to be in Minnesota with FBI agents “on the ground fighting the rampant fraud.”
“These agents and prosecutors have been working around the clock to root out the criminals stealing taxpayer dollars, and I am proud of all they accomplished in such a short time,” he said. “Their hard work made today possible.”
McDonald announced that 15 more prosecutors have been hired to combat Medicaid fraud in Minnesota and across the U.S.
“My message to the Minnesota community, and to all of America, is this: If you see something that seems too good to be true, tell us,” he said. “Do the right thing, speak out, help us win the fight against fraud.”
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