Full Breakdown
Federal Charges Filed in Minnesota Housing Stabilization Services Fraud Scheme
9/18/2025, 7:58:30 PM
Overview of the Fraud Scheme
On September 18, 2025, Acting U.S. Attorney for Minnesota Joseph Thompson announced federal fraud charges against eight individuals linked to a significant Medicaid fraud scheme involving the Housing Stabilization Services (HSS) program. The defendants are accused of collectively stealing over $8.4 million by billing for services that were never provided to vulnerable individuals, many of whom were recently released from drug or alcohol rehabilitation facilities. The charged individuals include 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.
Background of Housing Stabilization Services
Established in 2020, the HSS program aimed to assist vulnerable adults, including seniors and individuals with disabilities, in securing stable housing. Initially projected to cost around $2.6 million annually, the program's expenditures skyrocketed to over $310 million by 2025, raising concerns about its integrity. Investigations revealed that many providers exploited the system, submitting inflated and fraudulent claims for reimbursement.
Details of the Charges
The defendants are associated with four companies: Brilliant Minds LLC, Faladcare Inc., Leo Human Services LLC, and Liberty Plus LLC. Each company allegedly engaged in similar fraudulent practices, including inflating service claims and billing for nonexistent services. For instance, Brilliant Minds LLC reportedly submitted over $2.3 million in fraudulent claims, while Faladcare Inc. is accused of falsely claiming more than $2.2 million for services rendered to approximately 100 beneficiaries. The Adow brothers, operating Leo Human Services and Liberty Plus, allegedly received $2.7 million and $1.2 million, respectively, through similar fraudulent activities.
Official Statements & Responses
Joseph Thompson emphasized the staggering level of fraud within the HSS program, stating, “Unfortunately, our system of trust but verify no longer works. These programs have been abused over and over to the point where the fraud has overtaken legitimate services.” Temporary Minnesota Department of Human Services Commissioner Shireen Gandhi confirmed that payments to the implicated companies were halted upon detecting credible signs of fraud. She also indicated plans to terminate the HSS program entirely due to its lack of necessary controls.
Criticism & Opposition
Critics, including Minnesota House Speaker Lisa Demuth, have argued that the state government failed to act on numerous warnings about fraud within the HSS program. Demuth stated, “There were far too many warnings for this type of fraud to continue,” highlighting a lack of accountability within the executive office. Additionally, Republican lawmakers have called for a federal audit of the Minnesota Department of Human Services to investigate how such extensive fraud went unchecked for years.
What's Next
The investigation into HSS fraud is ongoing, with Thompson indicating that more charges will be filed in waves as the case develops. The Minnesota Department of Human Services is also working on redesigning the program to implement stronger integrity measures to prevent future fraud.
Verbatim Quotes
- “The level of fraud in these programs is staggering. Unfortunately, our system of trust but verify no longer works. These programs have been abused over and over to the point where fraud has overtaken the legitimate services,” — Joseph Thompson, Acting U.S. Attorney for Minnesota
- “Let today's actions serve as a warning to anyone who steals from Minnesota taxpayers: you will be prosecuted to the fullest extent possible by our law enforcement partners.” — Shireen Gandhi, Temporary DHS Commissioner
- “Fraudsters must be held accountable, and today’s indictments are a step in the right direction,” — Keith Ellison, Minnesota Attorney General
