ST PAUL, MINN. – New charges are being filed in federal court regarding alleged fraud in Minnesota state programs.
The U.S. Attorney’s Office in Minnesota says one-half of 18 billion dollars in Medicaid claims paid to Minnesota programs could be bogus, and a total of 14 state programs have been targeted for fraud. Including new cases announced Thursday.
“The magnitude of the fraud in Minnesota can not be overstated,” First Assistant U.S. Attorney for the District of Minnesota Joe Thompson said.
The programs include the Housing Stabilization Services Medicaid Program (HSSMP) and the Early Intensive Developmental Behavioral Intervention (EIDBI) Autism Medicaid Program, according to Thompson, who also provided information on ongoing investigations.
New HSSMP Program charges
Five new defendants face charges with relation to the HSSMP. The defendants claimed to provide services to people in Minnesota and then defrauded the government of services, submitting claims to Medicaid for things that were not done.
Two other defendants were charged with different crimes – Thompson described it as ‘fraud tourism.’
The defendants, residents of Philadelphia, Penn., had no connections to the state of Minnesota.
“Except for they heard that Minnesota and its Housing Stabilization Service Program was easy money,” Thompson said.
The pair enrolled their companies in Minnesota in the HSSMP before returning to Philadelphia, where they began submitting fraudulent claims to Medicaid, obtaining more than $3.5 million in payments.
“This fraud tourism is new,” Thompson said. “Although we’ve heard of it as investigators here.”
EIDBI Autism Medicaid Program charges
A second defendant has been charged in connection with fraud from the EIDBI Autism Medicaid Program.
The owner of the Star Autism Center in St. Cloud has been charged.
He allegedly paid kickbacks to parents to have children diagnosed with autism spectrum disorder and enrolled to receive EIDBI services at the business in St. Cloud.
Many of the services ‘were not provided, and in many cases, were not needed,’ according to Thompson.
The first defendant, previously charged, pled guilty this morning.
Search warrant executed into Integrated Community Supports program
Thompson said authorities executed a search warrant Thursday related to the Integrated Community Supports (ICS) program, which is housed under the Minnesota Department of Human Services.
The program started in 2021 in Minnesota and was designed to help people with disabilities live more independently in the community, he said, with assistance. Clients are to be provided this assistance on a daily basis.
“In reality, what the investigation has shown, is that many ICS providers did no such thing,” Thompson said. “Instead, they obtained apartments or condos, which they rented to people who they got qualified to receive ICS services.”
The program allows hundreds of dollars per day to be billed for each client, Thompson said.
House Speaker Demuth responds
House Speaker Lisa Demuth responded to the new claims saying, “Today, even more charges were announced against fraudsters who stole from Minnesotans to finance their own luxury lifestyles and send money overseas. Once again, the Walz administration sat by and did nothing while the administration’s out of control fraud culture imported fraudsters from other states to steal taxpayer dollars instead of serving those in need.”
She calls on Governor Tim Walz ‘admit what we all know: this administration has failed on fraud.’
“I’m grateful to the US Attorney’s office for shining a light on the sprawling fraud mess that has unfolded under the Walz administration, and for making clear how widespread the fraud is within Minnesota programs,” she said.
