DOJ announces charges against 15 in Minnesota Medicaid and autism fraud; federal officials cite $90 million in alleged losses

Assistant Attorney General Colin McDonald opened a federal press conference saying the Department of Justice has charged 15 defendants in Minnesota in health-care fraud schemes that collectively targeted about $90,000,000 in taxpayer funds. "This is the beginning of our work in Minnesota," McDonald said, calling the level of alleged dishonesty "shocking."

McDonald described seven state-managed Medicaid programs as targets and said one program—the state housing stabilization services program intended to help people find and keep housing—had been "completely shut down" because "there's no money left." He said that program, projected to cost about $2.5 million annually in 2020, reached more than $104,000,000 by 2024 because of fraud.

He gave examples of alleged harms, including a claim that a patient listed as receiving 24-hour care through an integrated community supports program actually received no services and later died. McDonald said some defendants billed Medicaid for services that were never provided and in one instance submitted a claim of more than $400 for a day on which the patient had died.

McDonald also described what DOJ called an unprecedented autism fraud, alleging defendants paid kickbacks to parents, pushed diagnoses regardless of medical necessity, and billed for autism services that were not provided. "The largest autism fraud scheme ever charged by the Department of Justice," McDonald said.

Officials from the Department of Health and Human Services and the White House anti-fraud task force framed the prosecutions as part of a wider national effort to protect federal health programs. "It was 38.1 million in 2020. Instead, this year, it hit 442 million," the HHS representative said to illustrate the magnitude of the spike in spending in one early-intervention program. HHS officials said the department had deferred $350,000,000 in federal payments to Minnesota while it and federal partners review provider documentation.

Administrator (Dr.) Oz, representing the White House anti-fraud task force, cited a whistleblower named Faye and said federal review found rapid, unexplained increases in program spending during the COVID period. He described actions the administration is taking, including provider revalidation: about 5,600 high-risk providers were targeted and, as of a May 7 status cited during the conference, roughly 40% had not provided adequate responses.

An FBI official asked the public for help identifying a defendant shown in video footage, naming Mohammed Omar as one of the charged individuals and saying the man was "on the run." The FBI urged anyone with information to call 1-800-CALL-FBI or submit tips at tips.fbi.gov.

Officials announced enforcement expansions: DOJ said it will add strike-force prosecutors to Midwest health-care efforts and will form a new nationwide Medicaid strike force beginning with 15 attorneys who can be deployed to fraud hot spots. McDonald said the health-care strike-force teams return $106 for every dollar spent on enforcement work.

In a question-and-answer session, reporters asked whether federal authorities planned to pursue state leaders who may have enabled fraud. McDonald said DOJ will "go wherever the facts require us to go" and will investigate and charge individuals within the chain of criminal culpability if evidence supports it. On state cooperation, McDonald said cooperation "has fallen significantly short" of the standard the federal team seeks.

Officials also said the administration is developing a victims' fund and a whistleblower program under a presidential executive order, intended to allow harmed individuals to report fraud and potentially recover some stolen funds. The press conference closed with officials reiterating the intent to sustain rapid, coordinated prosecutions and investigations.