Minnesota Health Care Fraud Takedown Leads to Charges Against 15 Defendants in Alleged $90 Million Fraud Schemes
Provided by the Department of Justice - May 21, 2026 Press Conference in Minneapolis, Minnesota.
Published: May 21st, 2026
TWIN CITIES, MINNESOTA: Federal authorities announced today what officials described as one of the largest health care fraud crackdowns in Minnesota history, unveiling criminal charges against 15 defendants accused of participating in multiple schemes that allegedly defrauded Medicaid and other public assistance programs of more than $90 million.
The sweeping enforcement action, referred to as the “Minnesota Health Care Fraud Takedown,” includes cases involving autism treatment programs, Housing Stabilization Services (HSS), Integrated Community Supports (ICS), Individualized Home Supports (IHS), and childcare reimbursement programs. Federal officials also announced a nationwide expansion of the U.S. Department of Justice’s Health Care Fraud Section, including the addition of 15 new prosecutors focused on Medicaid fraud investigations across the country.
According to the U.S. Department of Justice, the cases filed in Minnesota involve alleged fraud schemes totaling more than $90 million in intended losses, including what prosecutors called the two largest Medicaid fraud cases ever charged in the District of Minnesota. Federal officials said the investigations uncovered alleged schemes that targeted programs intended to serve vulnerable individuals, including children with autism, adults with disabilities, individuals needing housing support, and families relying on childcare assistance.
Acting U.S. Attorney General Todd Blanche said the defendants allegedly “ripped off the American taxpayer and harmed those deserving legitimate assistance from these programs.”
Largest Autism Fraud Case Ever Charged
Among the most significant cases announced was a $46.6 million alleged fraud scheme involving Minnesota Medicaid’s Early Intensive Developmental and Behavioral Intervention (EIDBI) program, which provides autism-related services to children and young adults under 21.
Federal prosecutors charged Shamso Ahmed Hassan, 55, and Hanaan Mursal Yusuf, 25, with conspiracy to commit health care fraud, health care fraud, conspiracy to defraud the United States, false statements related to health care matters, and money laundering.
According to the indictment, Hassan allegedly held undisclosed ownership interests in Smart Therapy Center and Star Autism Center, while Yusuf allegedly worked as an EIDBI provider and participated in the operation of the centers. Prosecutors allege the defendants paid kickbacks to families to encourage them to bring children to the centers so Medicaid could be billed for services, including services allegedly never provided or not eligible for reimbursement. Approximately $21.2 million was allegedly paid out through the scheme.
Federal officials said EIDBI claims in Minnesota reportedly increased from about $600,000 in 2018 to more than $400 million by 2025.
Health and Human Services Secretary Robert F. Kennedy Jr. called the case “the largest autism fraud bust in American history.”
Rosemount Man Charged in Integrated Community Supports Fraud Case
Federal prosecutors also announced charges against Ahmed Othman Kadar, 22, of Rosemount, in what officials described as the first criminal prosecution involving fraud in Minnesota’s Integrated Community Supports (ICS) program.
Kadar was charged with three counts of health care fraud and two counts of money laundering connected to allegations involving Ultimate Home Health LLC. Prosecutors allege Kadar billed Medicaid for ICS services that were either not provided or billed at amounts inflated beyond the services actually rendered.
According to court documents, ICS services are designed to help individuals with disabilities live independently in community settings rather than institutionalized facilities. Prosecutors allege Medicaid recipients failed to receive needed medical care under the scheme.
The indictment alleges that complaints about shut-off utilities at recipients’ residences went unanswered, forcing individuals to live without heat during winter. Prosecutors also allege Kadar billed for services for a recipient supposedly receiving 24-hour care the day before that recipient was later found deceased, despite the services allegedly not being provided.
Federal officials allege that approximately $1.4 million in claims were submitted and paid, with roughly $400,000 later transferred in violation of money-laundering statutes.
Officials said Minnesota’s ICS program grew from approximately $4.2 million in payments in 2021 to more than $183 million in 2025.
Blue Earth Defendants Accused in $22.7 Million Housing Support Scheme
Federal prosecutors charged Charles Wayne Healey, 61, and Katherin Suzan Larsen-Guthmiller, 66, in connection with an alleged $22.7 million fraud scheme involving Individualized Home Supports services.
According to the indictment, the pair operated Healey Homes and allegedly concealed ownership interests in more than 20 residences where Medicaid recipients lived. Prosecutors allege the defendants provided below-market rent to recipients in exchange for using their Medicaid information to bill for services.
Federal officials stated the IHS program is intended to help adults with disabilities live independently and prohibits providers from having financial interests in recipient housing. Pros’ housing. Prosecutors allege the defendants used proceeds from the scheme to acquire additional real estate, luxury vehicles, and expensive jewelry.
Housing Stabilization Services Fraud Cases
Several additional cases involved Minnesota’s Housing Stabilization Services program, which launched in 2020 to assist individuals with disabilities, mental illness, substance use disorders, and seniors with housing-related support. Federal prosecutors allege eight defendants collectively defrauded the HSS program of approximately $15.7 million.
Among those charged:
Deborah Hodges, 59, was accused of submitting approximately $5.3 million in fraudulent HSS claims through House of Heroes, Inc., including billing for in-person services allegedly provided while recipients were actually in inpatient treatment facilities. Approximately $5.2 million was allegedly paid.
Sharmaine Meadows, 45, owner of Cradle of Love, LLC, was charged in connection with more than $4.3 million in allegedly fraudulent claims, with approximately $3.7 million reportedly paid. Prosecutors allege employees were directed to bill maximum hours regardless of whether services were actually performed.
Muhammad Abdulqadir Omar, 32, and Ibrahim Bashir Abdi, 25, were accused of submitting approximately $3.3 million in fraudulent claims through North Home Health Care LLC and South Home Health Care LLC. Prosecutors allege the pair falsified records to support claims for services not provided.
Cynthia Allen, 62, and Candice Langley, 46, allegedly traveled from Pennsylvania to Minnesota to participate in HSS fraud schemes. Prosecutors allege the pair substantially inflated hours and falsified documentation, resulting in over $3.5 million in payments.
Mustafa Dayib, 22, and Abdulbasit Ibrahim, 22, were charged in connection with approximately $975,000 in allegedly fraudulent HSS claims submitted through Vitality Health Services LLC.
Federal officials noted the HSS program grew rapidly, from an anticipated annual cost of $2.6 million to more than $104 million in claims by 2024. The program was ultimately shut down by Minnesota in October 2025 due to fraud concerns.
Childcare Fraud Allegations Also Announced
Authorities also announced charges involving childcare reimbursement programs.
Jillaine Ann Mertens, 42, was charged with wire fraud connected to alleged false reimbursement applications submitted through three childcare centers she owned. Prosecutors allege that approximately $425,000 was fraudulently obtained from Minnesota’s Great Start Compensation Support Payment Program by claiming classroom services for employees who did not actually work at the facilities.
Additionally, Fahima Mahamud, 50, was charged with wire fraud and conspiracy to defraud the United States in connection with the alleged misuse of federal child nutrition and childcare assistance funds totaling approximately $5.48 million. Prosecutors allege Mahamud submitted inflated reimbursement claims through Feeding Our Future and improperly obtained Child Care Assistance Program reimbursements while falsely certifying required co-payments were collected.
DOJ Expands National Medicaid Fraud Enforcement
Alongside the takedown announcement, the Justice Department said it is significantly expanding its Health Care Fraud Strike Force operations nationwide, including adding 15 new prosecutors dedicated to Medicaid fraud investigations.
Officials said Minnesota’s recent fraud investigations demonstrated the need for stronger federal oversight and a “whole-of-government” approach to combat fraud involving public benefit programs. The Department of Justice also announced the expansion of the Midwest Strike Force to include the District of Minnesota.
Since 2007, the Department of Justice’s Health Care Fraud Strike Force Program has charged more than 6,200 defendants accused of collectively billing federal health care programs and private insurers more than $45 billion, according to federal officials.
All defendants are presumed innocent unless and until proven guilty in court. Federal indictments, informations, and complaints are allegations and are not evidence of guilt.
Written by: Will Wight
Cover photo captured from the press conference linked at the top of our article.
