U.S. Attorney’s Office Expects Fraud Schemes to Total Several Billion Dollars

(KNSI) – The U.S. Attorney’s Office for the District of Minnesota announced six new fraud charges, including one based out of St. Cloud.

Abdinajib Hassan Yussuf is the second person tied to the Star Autism Center to be charged. The center bribed families to register their children in one-on-one therapy sessions for autism. The claims were false, the sessions never happened, and it allowed Yussuf to pocket an estimated $6 million through the Early Intensive Developmental and Behavioral Intervention program.

First Assistant Attorney Joseph Thompson said based on the new fraudulent claims for services that were not provided, Yussuf received more than $6 million in Medicaid funds.”

About $100,000 of the proceeds helped Yussuf buy a semi truck. Another $200,000 was wired overseas.

Officials at Thursday’s press conference identified a new program they believe was plagued with fraud. Integrity Community Supports was started by the state in 2021 to help people with disabilities continue to live independently.

Thompson explains how ICS was abused. “In theory, the providers are supposed to be giving daily assistance to those clients. That assistance can include community participation, helping them get out and about in the community, helping them with household management, setting up medical appointments and issues with household safety and day-to-day safety. Many ICS providers did no such thing.”

Fraudsters could bill between $100,000 and $200,000 per year for each ICS client.

In one case, a person with severe mental illness was found dead after being abandoned in an apartment rented with ICS funds.

Out-of-staters were able to find their true north in Minnesota, at least on an actual compass, if not a moral one. Thompson announced charges in what he’s calling fraud tourism against Anthony Waddell Jefferson and Lester Brown of Pennsylvania.

“Mr. Jefferson and Brown were residents of Philadelphia, who had no connection to Minnesota, except for they heard that Minnesota and its Housing Stabilization Services Program was easy money. And so they traveled to Minnesota, enrolled their companies…they then returned to Philadelphia and began submitting fraudulent claims.”

The claims totaled about $3.5 million. Five of the six individuals charged with fraud Thursday allegedly abused the Housing Stabilization Services program, which was shut down due to rampant fraud. Thompson’s focus on fraud tourism led to a larger discussion about just how pervasive fraud is in the state, if even those living on the eastern seaboard had caught wind of the money to be made here.

“What we see here, and what I think is unique to Minnesota, is that’s not what we’re looking at. What we’re seeing is programs that are just entirely fraudulent. These aren’t companies that are providing some services, but over-billing Medicare and Medicaid. These are companies that are providing essentially no services.”

Thompson explained most Medicare and Medicaid fraud involves up-coding. Providing a service that gets reimbursed at a modest rate and then falsely claiming a related, but more valuable service had been rendered.

The suspects are accused of creating shell companies whose only purpose is wholesale fraud. Thompson lent credence to whispers circulating in political circles about the scope of the scandals. If he is right, it would be breathtaking. Thompson believes as much as $10 billion will be discovered to have been stolen when the investigations are finally over.

Within the 14 programs affected, spending totaled $18 billion since 2018. A majority of that was likely fraudulent. “When I say a significant amount, I’m talking on the order of half or more, but we’ll see. When I look at the claims data and the providers, I see more red flags than I see legitimate providers.”

He says they’ll manage to claw back some of what was taken. “In the Feeding our Future case, for example, I think we’re somewhere between $60 and $70 million that we’ve recovered. About $30 million of that is cash or liquid money seized from bank accounts. The rest is a combination of real estate and cars.”

That is a recovery rate of close to 30% of the $250 million bilked from the Feeding Our Future program. A significant amount of what was taken ended up being wired to Nairobi, Kenya, where a huge Somali refugee population has settled.

It funded the building of apartment complexes, with some going into Somalia proper. Thompson says at that point his office isn’t equipped to trace the cash. He can’t say whether the money reached Al-Shabaab, a prolific terror organization, but it can’t be ruled out either.

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