❓WHAT HAPPENED: Federal authorities in Minnesota announced new charges and revealed the staggering scope of fraud that has cost taxpayers billions.
👤WHO WAS INVOLVED: First Assistant U.S. Attorney Joe Thompson, six new defendants, and eight others previously charged in the Minnesota Housing Stability Services Program fraud.
📍WHEN & WHERE: Announced Thursday in Minnesota; fraud spans programs dating back to at least 2018.
💬KEY QUOTE: “The fraud is not small. It isn’t isolated. The magnitude cannot be overstated. What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering industrial-scale fraud. It’s swamping Minnesota and calling into question everything we know about our state.” – Joe Thompson
🎯IMPACT: Taxpayers have lost billions, with fraud involving multiple programs, international money transfers, and shell companies.
Federal prosecutors in Minnesota announced new charges on December 18 tied to a sweeping, largely Somali fraud investigation that officials say has cost taxpayers billions of dollars, describing the misconduct as unprecedented in scale and scope. First Assistant U.S. Attorney Joe Thompson said investigators have identified fraud across 14 government programs since 2018, involving an estimated $18 billion in public funds.
“The fraud is not small. It isn’t isolated. The magnitude cannot be overstated. What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering industrial-scale fraud. It’s swamping Minnesota and calling into question everything we know about our state,” Thompson said.
Six additional defendants were charged in the latest round of cases. Prosecutors allege some of the defendants stole about $750,000 intended for Medicaid recipients and submitted $1.4 million in fraudulent claims, with portions of the money used to purchase cryptocurrency. One defendant is accused of fleeing the country after receiving a subpoena.
Court filings allege that two of the defendants transferred more than $200,000 overseas to Kenya, where much of the money was used to buy real estate in Nairobi. Thompson said the schemes often involved shell companies created solely to extract money from state and federal programs.
“These aren’t companies that are providing some services but overbilling,” Thompson said. “These are companies providing essentially no services… shell companies created to defraud the program.”
The newly charged defendants include Abdinajib Hassan Yussuf, Anthony Waddell Jefferson, Lester Brown, Hassan Ahmed Hussein, Ahmed Abdirashid Mohamed, and Kaamil Omar Sallah. Prosecutors said some individuals involved in the fraud were drawn from outside Minnesota by what Thompson described as the state’s “easy money” housing stabilization services program.
The investigation follows years of scrutiny over large-scale fraud in Minnesota, including cases involving Medicaid, pandemic relief programs, and social service grants. Many of those cases have involved members of Minnesota’s Somali community. Whistleblowers and former state employees have alleged that state officials failed to act on early warnings about Somali-linked Medicaid and COVID-era fraud.
Former federal prosecutor Joe Teirab said the system was “easy” for fraudsters to exploit, pointing to weak oversight and rapid payouts. The Trump administration has prioritized the Minnesota cases, with federal agencies expanding investigations and prosecutions. Education Secretary Linda McMahon previously called on Governor Tim Walz (D) to resign over the issue.
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