MINNEAPOLIS – Federal authorities have unveiled a sweeping crackdown on sophisticated fraud schemes that allegedly siphoned over $90 million from seven state-managed Medicaid programs, marking a significant escalation in the fight against healthcare program abuse. The charges, brought against 15 individuals, represent a record-breaking amount in a Medicaid fraud case in Minnesota and the largest autism fraud scheme ever prosecuted by the U.S. Department of Justice.
Assistant Attorney General for the DOJ’s new Division for National Fraud Enforcement, Colin McDonald, characterized the scope of the alleged criminal activity as "unprecedented" during a press conference held at the federal courthouse in Minneapolis. He described the situation in Minnesota as "shocking," stating that state-run programs "have been systematically pilfered by fraudsters who treated Minnesota-run programs as their personal piggy bank."
The indictments target a range of alleged fraudulent activities, including those involving childcare providers and programs designed to assist vulnerable populations. This latest action follows federal authorities’ execution of search warrants at nearly two dozen autism and childcare centers across Minnesota late last month, signaling a targeted effort to dismantle these alleged criminal enterprises.
The investigations also delve into the misuse of funds from now-defunct programs such as the Housing Stabilization Services program, which was intended to provide housing assistance to individuals with disabilities and addiction issues at risk of homelessness, and the Individualized Home Supports program, established to aid individuals with disabilities seeking to live independently.
"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 stated, highlighting the alleged personal enrichment of those involved at the expense of public funds and those the programs were meant to serve.
This announcement comes in the wake of a separate, high-profile sentencing in the same courthouse. Aimee Bock, the founder of Feeding Our Future, received a sentence of over 41 years for her role in a staggering $250 million fraud scheme, which prosecutors described as the nation’s largest against COVID-19 relief programs. The presence of other top U.S. officials, including Health and Human Services Secretary Robert F. Kennedy Jr. and Mehmet Oz, Administrator for the Centers for Medicare and Medicaid Services, underscored the gravity and national significance of the latest charges.
Daycare and Autism Fraud at the Forefront of New Charges
Among the individuals facing new charges is Fahima Egeh Mahamud, a 50-year-old resident of Edina, Minnesota, who operated Future Leaders Early Learning Center in Minneapolis. Her center gained notoriety earlier this year after being featured in a viral video by investigative journalist Nick Shirley, which exposed alleged fraudulent practices.
Mahamud, who was previously charged in February with wire fraud in connection with the Feeding Our Future meal fraud scheme, now finds herself among the first to be implicated in the federal government’s ongoing investigations into the state’s childcare facilities. Court documents unsealed on Wednesday reveal accusations that Mahamud, between October 2022 and December 2025, allegedly defrauded the federally funded Child Care Assistance Program – administered by the Minnesota Department of Human Services – of approximately $4.6 million in fraudulent reimbursements.
Previous court documents filed in February had already alleged that Mahamud received $854,000 in reimbursements from the Federal Child Nutrition Program during the first six months of 2021, under a sponsorship with Feeding Our Future. These earlier filings indicated that only a "fraction" of these funds were actually used for food.
In another significant development, defendants Shamso Ahmed Hassan and Hanaan Mursal Yusuf are accused of orchestrating a scheme to defraud the state’s Early Intensive Developmental and Behavioral Intervention program, a key autism healthcare service. According to court documents, their alleged fraudulent activities involved paying kickbacks to parents who would then use autism centers to obtain diagnoses for their children, irrespective of medical necessity. Furthermore, the centers are accused of billing for services that were never rendered.
Hassan and Yusuf were reportedly part-owners of Smart Therapy Center in Minneapolis and Star Autism Center in St. Cloud. These businesses collectively submitted $46.6 million in fraudulent claims, from which they allegedly received $21.1 million in reimbursements.
"Today’s arrests represent the largest autism fraud bust in American history," stated HHS Secretary Robert F. Kennedy Jr. He emphasized the severity of the alleged crimes, asserting, "This was not a paperwork error. It was not a technical violation. This was organized theft that exploited the most vulnerable children in America."
Examining the Broader Landscape of Healthcare Fraud
The recent announcement comes amid broader federal efforts to curb rampant fraud within healthcare programs. Earlier this month, the Centers for Medicare and Medicaid Services implemented a six-month nationwide moratorium on new Medicare enrollment for hospice and home health agencies. This measure is a direct response to increasing concerns about program integrity and the potential for widespread abuse within these sectors.
Mehmet Oz, Administrator for the Centers for Medicare and Medicaid Services, provided context for the escalating fraud landscape. He noted that total Medicaid spending has surged by 50% since the onset of the COVID-19 pandemic, a period that also saw a significant reduction in oversight capacity, creating a fertile ground for fraudulent activities.
"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 remarked. He expressed profound concern about the long-term consequences for children subjected to such fabricated diagnoses, stating, "The diagnosis will be with them for the rest of their lives. As a physician, that bothers me to my core."
The DOJ’s announcement on Thursday marks the first major update since mid-December, when then-Assistant U.S. Attorney Joe Thompson estimated that a "significant amount" – potentially half or more – of the $18 billion disbursed by 14 "high-risk" Medicaid-funded programs since 2018 had been lost to fraud. While Governor Tim Walz later disputed this specific estimate, McDonald indicated that the current figures suggest a potentially larger scale of loss.
When questioned about the earlier estimate, McDonald stated, "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."
To combat the escalating problem, the Department of Justice has deployed significant resources to Minnesota. McDonald revealed that 11 prosecutors from across the country have been brought to Minnesota this year to work alongside FBI agents in an "on the ground" effort to combat 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," McDonald said. "Their hard work made today possible." He further announced that an additional 15 prosecutors have been hired to bolster efforts against Medicaid fraud both in Minnesota and nationwide.
McDonald issued a direct plea to the public: "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. Do the right thing, speak out, help us win the fight against fraud."
The coordinated efforts of federal agencies, including the Department of Justice, Health and Human Services, and the Centers for Medicare and Medicaid Services, highlight a renewed commitment to protecting public funds and ensuring that vital healthcare programs serve their intended beneficiaries. The scale of the alleged fraud uncovered in Minnesota serves as a stark reminder of the persistent challenges in safeguarding these programs against exploitation.
