$10B Medicaid Crisis Looms as Minnesota Bans 150 Providers Over Somali Fraud Network

Federal investigators in Minnesota reveal a daily torrent of $50 million fraud schemes draining state Medicaid programs, with up to $9 billion in taxpayer funds potentially stolen since 2018. First Assistant U.S. Attorney Joe Thompson called it “staggering, industrial-scale fraud,” marking what prosecutors describe as the largest welfare fraud crisis in U.S. history.​

Record-Breaking Theft from Safety Nets

Organized networks exploited Minnesota’s Medicaid and social services from 2018 to 2025, targeting 14 high-risk programs that billed $18 billion total. Prosecutors estimate at least half involved fake patients, nonexistent services, and forged records, diverting aid meant for children, autistic youth, seniors, and disabled individuals.​

Funds fueled lavish purchases like Porsches, Burberry and Louis Vuitton goods, and transfers to overseas accounts. Criminals from other states engaged in “fraud tourism,” traveling to exploit lax oversight.​

The $250 Million Feeding Scheme

Nonprofit Feeding Our Future claimed to serve 91 million meals to low-income children during the COVID-19 pandemic but fabricated sites and paperwork. Ringleaders Aimee Bock and Salim Said were convicted in March 2025 after a six-week trial; 78 people have been indicted, 59 convicted.​

Najmo M. Ahmed’s Evergreen Grocery and Deli took $4.2 million on false claims, with $1.1 million wired abroad amid luxury shopping. Bock forfeited $5.2 million, including a Porsche, bank funds, electronics, and designer items.​

Explosive Growth in Autism and Housing Programs

Minnesota’s Early Intensive Developmental and Behavioral Intervention program for autism therapy ballooned 700% from 2018 to 2024, payments jumping from $6 million to $192 million yearly. Providers allegedly targeted Somali community children with sham diagnoses and parental kickbacks; one-fifth of 450 providers faced probes.​​

Asha Farhan Hassan, 28, admitted stealing $14 million via Smart Therapy Center’s $31.8 million in fake claims, plus $465,000 from Feeding Our Future.​

Housing Stabilization Services costs soared from $2.6 million in 2020 to $104 million by 2024 on phantom bills, prompting shutdown in summer 2025. Thirteen people were charged.​

Fraud Tourism and New Vulnerabilities

Philadelphia duo Anthony Waddel Jefferson and Lester Brown filed $3.5 million in bogus claims through fake Minnesota firms. The Integrated Community Services program for disabilities grew 3,600% from $4.6 million in 2021 to $170 million in 2024, aided by no-license entry; agents raided Ultimate Home Health Services for $1.1 million in fraud.​

Department of Human Services Inspector General James Clark deemed it “shocking,” saying fraud became the business model. Over 90% of charged individuals through December 2025 were of Somali descent, mostly U.S. citizens, straining community ties in Minnesota’s 108,000-strong Somali population.​

At least 150 Somali medical providers in Minnesota are currently banned from participating in Medicaid and Medicare programs. Minnesota DHS has disenrolled approximately 800 inactive providers in high-risk programs.​

Misinformation and Political Fallout

YouTuber Nick Shirley’s December 2025 video confronted Somali daycares, alleging fraud, but inspections found most licensed with children present. Quality Learning Center, with $1.9 million in funds and no fraud charges, closed January 6, 2026, after safety violations.​

On that date, the Trump administration froze $10 billion nationwide in TANF ($7 billion), child care ($2.4 billion), and social services ($870 million) for Minnesota, New York, California, Illinois, and Colorado. President Trump ended Somali deportation protections, labeling them “garbage”, and deployed 2,000 DHS agents to the Twin Cities.​​

Governor Tim Walz abandoned reelection, citing fraud fights over politics. House Oversight hearings accused his administration of ignoring warnings; a February testimony looms. Five states sued January 8 to restore funds, claiming illegality.​

Path Forward

Ongoing probes yield weekly indictments, sparking national Medicaid reviews. Auditors spot similar issues elsewhere. A 90-day payment halt and audits aim to protect legitimate care, but Thompson warns persistent fraud risks program collapse. Recovery demands years of reforms balancing crackdowns with access for the needy, as enabling factors like pandemic flexibilities and weak licensing persist.​