MN fraud: DOJ announces fraud charges against 15 people, suspect on run

MINNEAPOLIS (FOX 9) - The U.S. Department of Justice announced a major fraud indictment in Minnesota, with charges being handed up against 15 people for fraud targeting $90 million in taxpayer funds.

15 people facing charges

What we know:

Assistant Attorney General Colin McDonald said a grand jury handed up an indictment charging 15 people for fraud that targeted over $90 million in taxpayer dollars.

The fraud targeted seven Medicaid programs, including Minnesota's Housing Stabilization program, the autism program, Integrated Community Support, and the state's Individualized Home Supports program.

Suspect arrested

Local perspective:

Officials said one of the fraud suspects was on the run. Authorities said the suspect leaped from a fourth-story balcony as authorities attempted to make an arrest.

Authorities identified the suspect as Muhammad Omar. Court records show Omar is charged with a count of conspiracy to commit health care fraud, and four counts of health care fraud.

Prosecutors say he worked with another man, Ibrahim Bashir Abdi, to create North Home Health Care, and Omar opened another company, South Home Health Care. The companies were registered with Minnesota's Housing Stabilization program.

Authorities say the men would falsify and inflate the number of service hours provided by North Home. Officials say some of the patients they were reportedly caring for were actually hospitalized and others were dead. Omar and Abdi pocketed $3.2 million based on those false claims. Omar received an additional $480,000 in claims from South Home.

However, Thursday afternoon, FOX 9 learned that Omar had been arrested and was now in custody.

Dr. Oz says Minnesota programs got ‘out of control’

What they're saying:

Sec. Kennedy and Centers for Medicare and Medicaid Services Administrator Dr. Oz blasted Minnesota for programs that got out of control.

Sec. Kennedy highlighted how budgets for many programs exploded during the pandemic.

"This was the cost of the early intervention development program in 2020. It was $38.1 million. This is what we expected to be paying every year," explained Sec. Kennedy. "Instead, this year it hit $442 million. ... [That's] the magnitude of the fraud and the damage that we're talking about today."

"It got so out of hand, that there was panic setting in," said Dr. Oz. "It was at that point that we re-engaged the process and realized there were programs that had been created here with massive spending that had increased so rapidly that there's no way to save the program."

Assistant Attorney Colin McDonald also referenced the Housing Stabilization program, which started with a budget of $2.5 million but ended up at almost 50 times that budget at $104 million by 2024. The state ultimately terminated the program last year.

Dr. Oz also highlighted testimony from Faye Bernstein, a former Minnesota DHS employee, who said there was a fear of being accused of racism if they took action on fraud complaints. Bernstein testified Wednesday at a Senate hearing on Minnesota fraud.

RFK Jr. calls it ‘organized theft’

Big picture view:

Health Secretary Robert F. Kennedy Jr. said Thursday's indictment was the largest autism fraud bust in American history.

"This was not a paperwork error," said Sec. Kennedy. "It was not a technical violation. This was organized theft that exploited the most vulnerable children in America, deceived families, stole taxpayer dollars meant to help children with autism access legitimate care and support."

Fraud unit expands

Big picture view:

Federal officials also announced they would expand their Division’s Health Care Fraud Section, adding 15 new trial attorneys to help combat Medicaid fraud across the country. Officials also said they would create a new task force in Minneapolis.

"We are adding strike force prosecutors to our Midwest health care strike force team," said McDonald. "That will be to put additional prosecutors on the ground here in Minnesota in a dedicated fashion, to work for the American people."

"Their work returns $106 to $1 for every dollar we spend," said McDonald. "The ROI is 106 to 1 for the work of these health care strike force prosecutors."

Suspect charged

What we don't know:

Here is a list of the suspects that are facing charges:

• Fahima Egeh Mahamud was indicted on a wire fraud charge for allegedly submitting false paperwork to Minnesota's Child Care Assistance Program. Authorities say Mahamud claimed to have collected necessary co-payments in order to receive reimbursement from the government for her day care. In reality, prosecutors said she lied. Mahamud was also charged earlier this year in the Feeding our Future fraud scheme. Mahamud's day care, Future Leaders Learning Center, was featured in conservative content creator Nick Shirley's video exposing fraud at Minnesota day cares. Shirley was at Thursday's news conference.
• Jillaine Mertens is accused of inflating hours and making false claims about staff for her three Minnesota day cares. She faces a wire fraud charge.
• Mustafa Dayib and Abdulbasit Ibrahim are charged with conspiracy to commit health care fraud for fraud against Minnesota's Housing Stabilization program. The men are accused of submitting false claims to bilk $975,000 from the program.
• Deborah Hodges is charged with conspiracy to commit health care fraud and health care fraud for allegedly orchestrating a scheme from Pennsylvania that fraudulently billed Medicaid approximately $5.3 million for Housing Stabilization Services that were inflated, ineligible, or never actually provided. Authorities say Hodges worked with at least two unnamed co-conspirators and others to commit the crimes.
• Ahmed Othman Kadar faces health care fraud and money laundering charges after his company allegedly defrauded Medicaid of roughly $1.4 million by billing for Integrated Community Supports for services not provided, including care for a patient who was ultimately found dead.
• Charles Wayne Healey and Katherin Suzan Larsen-Guthmiller are indicted for conspiracy to commit health care fraud and money laundering for allegedly defrauding Individualized Home Supports. The suspects are accused of billing Medicaid for $22.7 million in fraudulent claims.
• Shamso Ahmed Hassan and Hanaan Mursal Yusuf are charged with conspiracy to commit health care fraud, health care fraud, and money laundering for running a scheme against the state's autism program that billed Medicaid $46.6 million (receiving $21.1 million) for unnecessary or unprovided services. The suspects are accused of paying kickbacks for children in the program.
• Cynthia Allen is also accused of fraud against Minnesota's Housing Stabilization Services program. Allen, who lived in Philadelphia, is registered a company in Minnesota and also assisted in the operation of another company owned by an unnamed co-conspirator. Between the two companies, Allen and the co-conspirator received $3.4 million in false claims, authorities say.
• Candice Langley is charged with conspiracy to commit health care fraud for a Housing Stabilization Services program scheme. The charges say Langley, like Allen, was also based out of Philadelphia, and ran a company with unnamed co-conspirators. Prosecutors say the group would routinely fly from Philly to Minneapolis to recruit beneficiaries for their companies. According to the indictment, the scheme billed Medicaid $3.5 million in false claims.
• Sharmaine Meadows is also accused of fraud against the Housing Stabilization program. Prosecutors say Meadows ran a company called Cradle. The indictment alleges Meadows directed Cradle workers to report identical quantities of hours per Medicaid recipient per week, up to the maximum allowed. Authorities say Cradle would claim to provide services for recipients that were hospitalized and could have never received said services and for dates and times that – when accounted for – were mathematically impossible.