Federal authorities announced Thursday that eight people face charges in what prosecutors call a “massive fraud” scheme connected to Minnesota’s federally funded housing stabilization program.
The program, funded by federal Medicaid money, aimed to help people with disabilities secure and maintain housing. Instead, the defendants allegedly obtained the names of eligible individuals from treatment centers and other facilities to submit inflated and false reimbursement claims, according to the Minnesota U.S. Attorney’s Office.
At a Thursday news conference, Acting U.S. Attorney Joseph H. Thompson said some owners of housing stabilization service companies also ran other businesses billing various Medicaid programs.
“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 the fraud has overtaken the legitimate services,” Thompson said.
Brilliant Minds Scheme
Four defendants allegedly ran a fraudulent service provider called Brilliant Minds. Between 2022 and 2025, they submitted claims totaling $2.3 million for assisting clients with housing. Prosecutors say most of these services were never provided.
The four individuals — Moktar Hassan Aden (30), Mustafa Dayib Ali (29), Khalid Ahmed Dayib (26), and Abdifitah Mohamud Mohamed (27) — are accused of pocketing between $300,000 and $400,000 each.
The announcement followed the recent termination of the DHS office head overseeing the program, just a day before a state House committee hearing on alleged DHS fraud.
Due to widespread fraud, DHS is closing the housing stabilization services program. Department leaders told the House on Wednesday they halted payments to 115 providers suspected of submitting fraudulent claims.
Temporary DHS Commissioner Shireen Gandhi noted the program provided essential services, which is why entry barriers were low for new providers and beneficiaries. However, these low barriers also made the program vulnerable to fraud, as Thompson highlighted.
Additional Charges
Federal prosecutors also charged:
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Christopher Adesoji Falade (62) and his son Emmanuel Oluwademilade Falade (32), for a similar scheme through their company Faladcare Inc., submitting fraudulent claims totaling more than $2.2 million.
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Asad Ahmed Adow (26), owner of Leo Human Services LLC in Brooklyn Park.
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Anwar Ahmed Adow (25), owner of Liberty Plus LLC in Roseville.
The U.S. Attorney’s Office said Anwar Adow instructed employees at Liberty Plus to bill as much as possible, without scrutinizing submitted hours. Liberty Plus received over $1.2 million in Medicaid funds.
Coordinated Investigations
Minnesota Attorney General Keith Ellison and DHS confirmed their investigators worked with federal prosecutors to expose the alleged fraud. DHS stopped payments to Brilliant Minds, Leo Human Services, and Liberty Plus in May, and to Faladcare in July.
Thompson called Thursday’s charges the “first round” from a broader investigation by state and federal officials.
Massive Financial Impact
DHS initially estimated the program would cost $2.6 million annually, but actual payments skyrocketed:
| Year | Paid Claims |
|---|---|
| 2021 | $21 million |
| 2022 | $42 million |
| 2023 | $74 million |
| 2024 | $104 million |
| First half of 2025 | $61 million |
Thompson said most of these funds were fraudulent.
“Despite the hundreds of millions of dollars in payments that have gone out from the state of Minnesota to housing stabilization services companies, many of these, most of these individuals, did not receive the stable housing they so desperately needed. The money was just simply stolen.”
Ongoing Fraud Concerns
Fraud in state-administered programs has been an ongoing issue since the Feeding Our Future indictments three years ago. Critics have faulted Gov. Tim Walz’s administration for insufficient oversight.
Walz issued an executive order this week directing state agencies to take stronger actions to prevent fraud. DHS says the order will help stop payments quickly when fraud is suspected. Walz also plans to form a statewide council of inspectors general and fraud experts at the Minnesota Bureau of Criminal Apprehension.
Referencing the recent Feeding Our Future nutrition aid scandal, which involved more than $250 million in federal COVID-19 aid, Thompson said Minnesota is “drowning in fraud” and must build stronger safeguards into future programs.
“We cannot prosecute our way out of this problem,” he said.
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