Since 2016, Minnesota’s Department of Human Services has paid roughly $49 million in Medicaid-linked funds to companies connected to Gandi Mohamed, also known as Gandi Abdi Kediye.
The payments flowed to entities that own or supply assisted-living and group homes across the Minneapolis metro area. Mohamed was later indicted in a separate federal fraud case, raising questions about how such large public payments continued to move through interconnected care-home businesses.
Pandemic Food Fraud and Expansion into Care Homes
Federal prosecutors allege Mohamed helped launder more than $1 million from the Feeding Our Future child-nutrition fraud between 2020 and 2022. Court filings show that after the pandemic-era scheme, entities tied to Mohamed expanded aggressively into residential care housing.
While the food-program fraud and assisted-living payments involve different programs, investigators say the same business network later collected millions through Minnesota’s Medicaid-funded care systems.
Residents in Affected Homes
Adults with disabilities live in many of the single-family homes tied to these payments, particularly in Brooklyn Park and Minneapolis. The residences are licensed as assisted-living or group homes and largely funded through Medicaid waiver programs.
Residents and staff interviewed by reporters described homes that appeared operational and staffed. However, the properties’ ownership links to a high-profile fraud case have drawn new scrutiny to how care-home funding is monitored.
State Agencies’ Roles and Limitations
Minnesota’s oversight is split between agencies. The Department of Health licenses assisted-living facilities, while the Department of Human Services handles Medicaid payments.
State officials say they lack authority to revoke licenses or stop payments solely because a property owner is indicted but not convicted, particularly when that owner does not directly operate the licensed care business. This division has complicated the state’s ability to respond swiftly.
Growth in Assisted-Living Spending
State data show assisted-living and related residential care programs are among Minnesota’s fastest-growing Medicaid expenditures. Spending has increased far more rapidly than other Medicaid categories, even though enrollment has only roughly doubled.
Lawmakers and analysts note that high reimbursement rates and relatively low startup costs have attracted new providers. That growth has intensified concerns about whether oversight systems expanded quickly enough to match the surge.
Assisted-Living Density in Twin Cities Suburbs
Brooklyn Park and Brooklyn Center stand out for their unusually high concentrations of assisted-living facilities. Brooklyn Park has 181 licensed sites despite a population of about 84,000, while Brooklyn Center has 106 for roughly 30,000 residents.
By comparison, Minneapolis has fewer facilities despite being several times larger. Investigators and legislators view these clusters as potential indicators of intensive Medicaid billing activity.
Operations at GAK Properties Homes
Homes owned by GAK Properties, an entity tied to Mohamed, operate throughout several Twin Cities suburbs. During site visits, reporters encountered staff who said the homes were managed day-to-day by Mohamed’s wife, Samsam Mohamed.
Residents described structured routines, meals, and supervision consistent with licensing rules. While no immediate care violations were alleged, ownership and payment flows remain under investigation.
Legislative Response to Oversight Concerns
The issue reached the Minnesota House Fraud Prevention and State Agency Oversight Committee, where Chair Rep. Kristin Robbins criticized continued state payments to entities connected to Feeding Our Future defendants.
She described the situation as evidence of inadequate due diligence. In response to broader fraud concerns, Governor Tim Walz signed legislation strengthening fraud detection, payment controls, and inter-agency coordination across multiple public assistance programs.
Federal Medicaid Rules and State Constraints
Federal Medicaid regulations require states to suspend payments when there is a credible allegation of fraud against a provider, but allow exceptions to protect access to care.
Minnesota DHS argues those rules do not clearly apply to landlords or related parties who own property but do not hold the provider license. Officials say state statutes limit their ability to cut payments without directly tying fraud allegations to licensed operators.
Impacts on Care Providers
Legitimate assisted-living operators say cases like this have reshaped the industry. Providers report increased documentation requirements, more frequent audits, and longer payment delays. Industry representatives acknowledge that related-party ownership structures are common in residential care but say stronger transparency and oversight are needed.
Many providers support tougher controls, even as they warn that excessive delays can strain staffing and service delivery.
Budget Tradeoffs in Medicaid Spending
Minnesota’s Medicaid budget is finite, meaning rapid growth in one area affects others. Analysts note that rising assisted-living expenditures can limit resources for hospitals, skilled nursing facilities, and home-health providers.
Several of those sectors already report workforce shortages and financial pressure. Policymakers face difficult choices about balancing oversight, access to care, and fiscal sustainability as residential programs expand.
Related Entities and Payments
In addition to housing companies, investigators are examining Comfort Services LLC, a home-health provider connected to Mohamed. Records show the company has received more than $40 million in payments from DHS since 2016.
Authorities are reviewing how funds moved between related businesses and whether Medicaid dollars were appropriately billed. Some proceeds were reportedly used to acquire additional residential properties used for care services.
Feeding Our Future as a National Case
The Feeding Our Future scandal ranks among the largest pandemic-era fraud cases in the United States. Prosecutors allege more than $250 million in fraudulent claims and have charged roughly 78 defendants.
The scope of the case has drawn national attention, with officials in other states watching Minnesota’s response closely as they evaluate vulnerabilities in their own nutrition and healthcare programs.
Community Impacts of Media Coverage
Many defendants in the Feeding Our Future case, including Mohamed, are of Somali descent. Defense attorneys argue extensive media coverage has fueled harmful stereotypes and prejudice. In court filings, one attorney warned that publicity has portrayed Somali Minnesotans unfairly.
Community leaders have echoed concerns that legitimate businesses and families may face suspicion due to the actions of a small number of individuals.
Considerations for Families
Community-based assisted-living homes can offer a more personal environment than large facilities, especially for adults with disabilities.
However, advocates urge families to look beyond appearances. Key steps include reviewing state licenses, understanding ownership structures, checking inspection histories, and asking how staffing is supervised. Transparency, they say, is essential for ensuring quality care and responsible use of public funds.
Outcomes from Alleged Fraud
Federal indictments in related cases describe proceeds spent on luxury homes, vehicles, and cash purchases.
At the same time, compliant providers face increased regulatory burdens, and Medicaid recipients risk disruptions if payments are suspended. Residents living in homes connected to investigated entities may experience uncertainty, even when no immediate care deficiencies have been identified.
Implications for Insurers and Markets
Managed-care organizations and financial stakeholders closely track Medicaid fraud investigations. Rapid growth in assisted-living claims, particularly where ownership risks are flagged, can influence reimbursement rates, contract terms, and risk assessments.
For municipal bondholders and insurers, weaknesses in oversight raise broader concerns about cost controls and long-term stability in publicly funded healthcare systems.
Steps for Consumers
Families and guardians can take practical steps to protect loved ones. These include searching state licensing databases, requesting written ownership disclosures, reviewing inspection reports, and reporting concerns through state fraud hotlines.
Experts also recommend comparing multiple care options and asking providers how they separate property ownership from care operations to reduce conflicts of interest.
Potential for Further Fraud Risks
State officials have identified 14 Medicaid programs previously exploited for fraud. Lawmakers warn that assisted-living could become another vulnerability if oversight does not keep pace with growth.
Recent legislation and executive actions expand DHS authority to share data, halt questionable payments more quickly, and strengthen fraud investigations across agencies.
Case Exposes Oversight Challenges
Mohamed’s February 2024 indictment, combined with $49 million in Medicaid-linked payments since 2016, has become a defining example of Minnesota’s oversight challenges. The case underscores how rapidly expanding care sectors can outpace regulatory safeguards.
As investigations continue, state leaders face pressure to close gaps while protecting residents who depend on assisted-living services.
Sources:
- APM Reports/MPR News (Primary Source)
Title: Not explicitly titled in citations; refers to investigative reporting on Gandi Abdi Kediye and group homes (dated 30 Dec 2025)
- Publication: APM Reports / MPR News
- IRS Criminal Investigation
Title: Not specified; references Feeding Our Future fraud details
- Publication: IRS Criminal Investigation, 26 Jun 2025
- Federal Regulations
Title: N/A (statutory text) - Publication: eCFR 42 C.F.R. §455.23
- KSTP-TV
Title: Not specified; covers defense arguments on trial venue and community prejudice
- Publication: KSTP-TV, 18 Dec 2025
- U.S. Attorney’s Office–Minnesota
Title: N/A (press releases) - Publication: U.S. Attorney’s Office–Minnesota, 2024–2025 releases
- Secondary/Research Summaries
Title: N/A (data compilations) - Publication: MSN JSON research summary, 2024; Minnesota Department of Health licensing guidance (via APM Reports); HHS-OIG MFCU guidance