St. Cloud Autism Center Raided by FBI Agents Thursday

(KNSI) — Star Autism Center in St. Cloud was raided by FBI agents Thursday morning.

Law enforcement descended on the building, executing warrants as part of a wide-ranging Medicaid fraud investigation.

In September, a bombshell report on fraud within autism therapy centers was issued after a supervisor at Smart Therapy in Minneapolis shows a supervisor there attempted to blow the whistle on waste and abuse, but state government agencies ignored her claims. In an email, she said, “Clients aren’t learning anything from this agency. This agency will do anything to keep clients from going to other centers to seek the additional assistance they require or need.”

According to today’s search warrant, the number of autism providers has increased by 700% in the past five years, accompanied by a 3,000% increase in funding for those services, including $400 million in 2023 and 2024. Federal investigators say they found “substantial evidence” providers submitted fraudulent claims for services not provided or covered by the program.

KNSI News went to the building but found the offices were locked with no one around to answer any questions.

Additionally, the warrant shows at least twelve people charged in the Feeding Our Future fraud case owned, received money from or were associated with autism centers that got state funding for providing services.

House Speaker Designate Representative Lisa Demuth (R-Cold Spring) said that because this investigation is linked to that scandal, “I am calling on Governor [Tim] Walz to order state agencies to immediately pause payments to anyone or any entity that is suspected or convicted of fraud in other state programs.”

This is the latest in an onslaught of fraud in Minnesota that has popped up on Governor Walz’s watch, totaling nearly $1 billion.

In 2022, the Feeding Our Future scheme bilked $250 million from the U.S. Department of Agriculture’s Federal Child Nutrition Program. Since then, dozens of people have been charged with their alleged roles in the scandal.

In 2023, the Minnesota Office of the Legislative Auditor examined nearly $400 million in pandemic spending and found several instances where agencies exceeded their emergency authority or failed to properly document purchases or track supplies.

In June of this year, the OLA raised questions about the $500 million Frontline Worker Pay Program after an audit found significant problems with verifying applicants and ensuring they met program requirements. Auditors found that the Department of Labor and Industry, tasked with overseeing and implementing the program, didn’t comply with the requirements. Forty-one percent of applicants couldn’t be verified, and ineligible applicants received payments anyway. State agencies, including the Department of Revenue and Minnesota Information Technology Services, didn’t follow best practices to prevent fraud.

In August, the U.S. Department of Labor said the state overpaid pandemic unemployment benefits by more than $430 million.

This week, the OLA issued a report showing that the Department of Human Services made $40 million in overpayments to Medical Assistance providers and has done little to recover that money.

Demuth says with investigations ongoing and dozens of documented cases of waste, fraud, and abuse within public programs, “state agencies must do more to stop criminal activity before even more taxpayer dollars are lost to bad actors. The Walz Administration’s refusal to act means that hundreds of millions of dollars continue to be stolen with no chance of recovery.”

In July, Gov. Tim Walz said that he was “not aware” of the FBI investigation and seemed unaware of allegations of fraud in Minnesota’s autism program.

After the report on autism center fraud came out, Demuth said, “Governor Walz has presided over unprecedented levels of fraud and waste in state government, leading to billions of tax dollars lost to criminals. As his administration refuses to put measures in place to protect Minnesota taxpayers, today’s report details how they ignored good-faith efforts by whistleblowers to alert officials of questionable business practices by providers.

“This lack of oversight has led to serious consequences not only for taxpayers, but also for children and families who have received inadequate services described in news reports as ‘horrific’.”

___