Federal prosecutors unsealed charges Thursday against 15 individuals accused of orchestrating a sprawling $90 million healthcare fraud scheme in Minnesota, targeting taxpayer-funded programs including Medicaid, housing stabilization services, child care, and individualized home supports. The indictments, announced by the Department of Justice following a joint investigation with the FBI, mark one of the largest Medicaid fraud cases ever filed in the district, according to FBI Director Kash Patel.
Fraud Across Multiple Programs
The charges span seven state-run Medicaid programs, with Patel noting that two of them represent the biggest fraud cases of their kind in Minnesota's history. Allegations include money laundering, false autism diagnoses, improper billing, and child care fraud. Acting Attorney General Todd Blanche condemned the defendants, stating they "ripped off the American taxpayer and harmed those deserving legitimate assistance." He added that some recipients received substandard care, including one who was abandoned as they died.
Blanche, who has also defended the department's broader fraud enforcement efforts in a separate fund case, emphasized that the DOJ's Fraud Division and the White House's Task Force to Eliminate Fraud are just getting started. "This is just the tip of the iceberg," he said.
Link to Feeding Our Future Scandal
Among those indicted is Fahima Mahamud, a woman previously tied to the viral Minnesota daycare fraud scheme involving the nonprofit Feeding Our Future, which purported to feed hungry children during the pandemic. That organization gained notoriety after YouTuber Nick Shirley exposed its operations, leading to a freeze of $185 million in Minnesota child care funds and a federal immigration crackdown. Mahamud is now charged with conspiracy to defraud the U.S. and wire fraud for allegedly stealing millions meant for children's meals.
State Oversight Under Fire
Assistant Attorney General Colin McDonald, leading the federal Medicaid fraud crackdown, accused Minnesota state officials of being "asleep at the wheel" as fraud cases surged. He pointed to one Medicaid-linked program that ballooned from $600,000 in annual payouts to roughly $430 million over five years, calling it a result of "ignorance" and "lack of oversight."
On Thursday, a federal court sentenced Aimee Bock, the convicted ringleader of the $250 million Feeding Our Future scheme, to 42 years in prison. The DOJ labeled Bock the mastermind behind the largest COVID-19 fraud scheme in the country.
This case underscores ongoing concerns about fraud in Minnesota's social programs, which have drawn scrutiny from federal officials and prompted lawsuits over state prediction market bans. The DOJ and HHS earlier announced a major fraud enforcement action in the state, signaling a broader crackdown.
