The U.S. attorney’s office gave an update on the scale of fraud in the North Star State—now a ‘fraud tourism’ destination, the first assistant attorney said.
Minnesota’s fraud cases continue to broaden, federal authorities said Dec. 18, as they announced charges against a half-dozen new suspects. They also revealed that evidence was seized in a fourth type of scandal, and estimated the state’s fraud losses could exceed $9 billion in Medicaid alone.
Joe Thompson, first assistant U.S. attorney in Minnesota, disclosed those updates with other federal agencies at a news conference in Minneapolis.
He also said that Medicaid officials are examining $18 billion worth of Minnesota claims dating back to 2018. “Half or more” of that amount could be fraudulent, he said, noting the review is limited to 14 fraud-vulnerable services that are “just part of Medicaid.”
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Thompson said investigators are working “around the clock” to dig into “staggering, industrial-scale fraud.”
“Every day we look under a rock and find … a new $50 million fraud scheme,” he said.
Five more people have been charged in a “Housing Stabilization Services” program; a couple of those suspects had no connection to Minnesota but came to the state after hearing that “easy money” could be made through that program, Thompson said.
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That so-called “fraud tourism” is a new phenomenon among the Minnesota fraud cases, he said, although prosecutors have heard of it occurring elsewhere.
It’s a shorthand way of explaining that fraud potential, not tourist attractions, motivated suspects to travel to new destinations.
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A sixth person was charged in a separate case, dealing with allegedly fraudulent claims of providing services to children with autism.
The housing and autism services cases both broke with initial suspects charged in September, while an estimated $250 million racket involving a nonprofit called “Feeding Our Future” continued to unfold.
The first charges in the Feeding Our Future case, allegedly involving fraudulent claims of feeding needy children, were filed in 2022. Since then, 78 people have been charged, and dozens have been convicted.
Just before new charges were announced in the housing and autism scandals on Dec. 18, a judge unsealed a search warrant related to alleged exploitation of Medicaid’s Integrated Community Supports program, Thompson said. That money is supposed to help people live independently in their own homes, assisting them with “health, safety, and household tasks,” a Justice Department news release explained.
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However, the program “has been vulnerable to fraud,” the release said.
The community-supports program, like the housing and autism programs, showed “explosive growth,” a pattern raising red flags for fraud, Thompson said. Payouts totaled $4.6 million when the community-supports program launched in 2021, and it ballooned to $170 million in 2024, the release said.
Also on Dec. 18, Asha Farhan Hassan, 28, pleaded guilty to charges brought against her in September in both the autism and meals-program scandals. She reaped nearly $14.5 million, prosecutors said.
A new suspect in the autism scandal, Abdinajib Hassan Yussuf, 27, is charged with one count of wire fraud.
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He and his partners recruited children to receive treatment at a business where he was president and CEO, Star Autism Center.
The business obtained more than $6 million in Medicaid reimbursements. “Many of these claims were fraudulently inflated, billed without providers’ knowledge, and for services that were not actually provided,” a news release said. Further, Star Autism allegedly paid kickbacks to parents who cooperated with the scheme, and financed the kickback costs through Medicaid billing, the statement said.
The news release also gives information on five new defendants charged in the housing-stablization scheme, joining eight previously charged suspects.
A pair of Pennsylvania men, Anthony Waddell Jefferson, 37, and Lester Brown, 53, each face a count of wire fraud. Marketing themselves as “The Housing Guys” at shelters and housing facilities, the pair “repeatedly flew together from Philadelphia to Minneapolis for the purpose of recruiting beneficiaries for their companies.”
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They allegedly hired family members, invented fake employees, and “made up fake notes” to satisfy requests for documentation of the services they were supposed to provide, authorities allege. They submitted about $3.5 million worth of claims, purporting to serve 230 people.
Similarly, two other men face wire-fraud charges: Hassan Ahmed Hussein, 28, and Ahmed Abdirashid Mohamed, 27. The charges stem from their operation of a company in St. Paul called Pristine Health.
“Hussein and Mohamed were supposed to provide housing consulting, transitioning, and sustaining services to qualifying people in need,” the news release states, but allegedly were involved in submitting false claims that “significantly overrepresented the services they provided.”
They allegedly spent much of the proceeds “on themselves and to fund personal travel, including to London, Sydney, Dubai, Istanbul, and several destinations in Saudi Arabia.”
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Kaamil Omar Sallah, 26, is charged with four counts of wire fraud over activities with a company he owned and operated, SafeLodgings Inc. “In 2024 alone, Sallah claimed to have personally provided more than 3,600 billable service hours,” the release says, adding that he and his company received almost $1.3 million in government funds, and Sallah “diverted much of his fraud proceeds to conspirators,” or investments including almost $150,000 in a cryptocurrency exchange.
The new charges follow a string of significant developments related to the fraud cases—all within the past few days.
On Dec. 12, Gov. Tim Walz appointed an anti-fraud czar.
On Dec. 15, Education Secretary Linda McMahon called for Walz’s resignation over alleged failure to clamp down on fraud in his state, which she says included $12.5 million in government loans to nearly 2,000 “ghost students” who never attended college.
That same day, the U.S. Labor Department announced it was sending a “strike team” to investigate whether unemployment compensation was being abused in Minnesota.
Overturned Somali Fraud Verdict Could Help Reveal ‘Road Map’ for Reforms: Minnesota Lawmaker
A new state senator is probing a controversial case that he said could reveal how to better prevent, detect, and prosecute fraudsters.
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Senior Reporter
12/17/2025|Updated: 12/18/2025
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ST. PAUL, Minn.—Two days after Minnesota state Sen. Michael Holmstrom, a Republican, was sworn in as a new state senator in November, a judge reversed a conviction in one of Minnesota’s many welfare fraud cases.
That caught his attention and sparked outrage and questions from his constituents.
Holmstrom’s social media posts on the overturned verdict and the state’s other fraud scandals drew millions of views and tens of thousands of comments. Several people said that until they heard about the case of Abdifatah Abdulkadir Yusuf, they had no idea that trial judges have the power to overturn jury verdicts.
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Since the judge’s decision in late November, Holmstrom has been digging for records and answers beyond the judge’s unusual ruling. He said he believes that Yusuf’s case could reveal how fraud happens and how those cases ought to be prosecuted. Holmstrom said he hopes to figure out a plan for preventing large-scale welfare fraud—not only in Minnesota, but also across the nation.
“This is the number one priority for me: making sure that we have transparency, so Minnesotans know what happened … [and] how the system failed so drastically,” Holmstrom told The Epoch Times in a recent interview at his state Senate office.
“This is death by 44,000 cuts,” he said, referring to the number of transactions in Yusuf’s case.
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“I want to figure out what the road map to fraud is,” Holmstrom said. “How do you go from zero dollars at day one to $7.2 million? What happened in between?”
Holmstrom said he is hopeful that such a “road map” would help government agencies better prevent and detect fraud. The case might also reveal needed changes in the criminal justice system, he said.
Surprising Findings
Initially, Holmstrom questioned Minnesota Judge Sarah West’s reasoning when she threw out a Hennepin County jury’s guilty verdicts in the case against Yusuf, a 44-year-old Somali man. The jury convicted him of six counts of aiding and abetting theft by swindle. West dismissed a count of racketeering during Yusuf’s August trial.
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Among the dozens of defendants convicted of welfare fraud in Minnesota, mostly Somalis, Yusuf’s case appears to be the only instance in which a judge overturned a jury verdict.
However, some surprising findings cast the judge’s decision in a new light, Holmstrom said.
Two other judges dismissed a pair of related cases before they even went to trial, the senator said. In addition, no charges were filed against Yusuf’s brother, despite the judge’s assertion that a reasonable jury could have inferred that he was responsible for the alleged crimes.
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In her ruling, West said evidence proved that “serious issues and fraud” did occur at Promise Health Services, a Yusuf-owned company that operated from a mailbox “with no physical office space.”
Promise Health Services “fraudulently billed” the state welfare agency based on “falsified support plans … services that were procured by prohibited kickbacks, and services not delivered,” state prosecutors said in a court record.
Yet the prosecution provided “no direct evidence of Mr. Yusuf’s participation in, knowledge of, or aiding in the fraud,” the judge wrote.
The judge also said it was “not clear how much of an actual role he played” in the company. Rather, his brother was managing Promise.
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The fact that Yusuf allowed his brother to act as manager “is not enough to establish the basis for aiding and abetting theft [by] swindle,” she wrote.
West’s words and the two dismissed cases raise questions for Minnesota Attorney General Keith Ellison, whose prosecutors handled the Yusuf case, Holmstrom said. He noted that federal prosecutors have gained convictions in dozens of fraud cases and have many more cases pending.
Ellison’s office did not respond to a request for comment. But the attorney general recently stated that his office has successfully prosecuted 300 Medicaid fraud cases.
The attorney general has appealed Yusuf’s acquittal.
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The appellate court could uphold West’s ruling or overturn it and reinstate the jury’s verdict, said legal scholar Nora Demleitner, former president of St. John’s College in Maryland and former dean of the Washington and Lee University School of Law.
Demleitner told The Epoch Times that judges must focus on the facts of the case and cannot allow themselves to be swayed by “the overall political climate.”
Georgia attorney Joe Zdrilich told The Epoch Times, “Judges very rarely reverse a jury’s guilty verdict, and when they do, it usually involves some very specific legal finding rather than any kind of critique of the jury system.”
Based on seeing similar issues play out in civil cases, appeals courts tend to focus on “whether the judge stayed within his or her authority” rather than reweighing the facts, he said.
Judge Found Fraud ‘Offensive’
West’s decision to overturn Yusuf’s convictions hit just as national publicity was swelling over allegations that millions of dollars from Minnesota fraudsters indirectly funded the al-Shabaab terrorist group in Somalia.
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The Treasury Department is investigating those fund transfers. Multiple other federal investigations focus on immigration fraud and welfare fraud involving potentially billions of taxpayer dollars.
Thus, West’s ruling struck a raw nerve, Holmstrom said.
“It is frustrating, as a Minnesotan who pays taxes, who lives in the state, who has friends and neighbors on these services, to watch the system get abused,” he said.
Similarly, the judge stated that it was “offensive and of great concern” how much Medicaid money flowed through Yusuf’s company, with more than $1 million transferred from the business account to Yusuf’s personal accounts.
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Yusuf also used funds from Promise to pay $55,000 in credit card bills. He shopped at high-end retailers, including Nordstrom and Coach, and made payments to luxury auto dealers such as Mercedes-Benz and Jaguar Land Rover, court records show.
Further, bank records show $2.5 million paid to people who were not Promise employees, the judge wrote.
Yet, she said, prosecutors “dumped 115 exhibits on the jury with minimal explanation or guidance as to what was included, where to find the circumstances from which to infer Mr. Yusuf’s knowledge, or even how to go through them.”
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West chastised prosecutors for “the way this case was presented” and for their “failure … to actually connect the dots” to show that Yusuf “knowingly assisted in the fraud.” She called those prosecutorial failings “more than concerning.”
Although the judge’s 55-page decision lays out considerable information, Holmstrom persuaded West to release the trial exhibits, which had been sealed under an existing court policy. His efforts are continuing, he said, as he pointed to tiny, illegible screenshots he was sent. He is also seeking answers from Ellison’s office and from other state officials.
This case and others highlight a need for more bipartisan anti-fraud cooperation, the freshman Republican lawmaker said.
Earlier this year, Minnesota state Sen. Heather Gustafson, a Democrat, sponsored a bipartisan bill that would have created an Office of Inspector General to combat fraud. The proposal stalled this year, but Gustafson said she intends to reintroduce it in 2026.
“Everybody should be 100 percent on board with investigating this fraud, regardless of party,” Holmstrom said. “It’s the taxpayers’ money, regardless of party.”
