Feds execute search warrants connected to ‘massive scheme to defraud’ a Minnesota housing program
"The Program has proved to be extremely vulnerable to fraud," wrote a special investigator in a search warrant. "Fraud is a huge problem in Minnesota," Acting U.S. Attorney Joe Thompson said at the scene of one raid.
Alpha News was on location as a search warrant was being served at several locations related to a “massive scheme to defraud” Medicaid and Minnesota’s Housing Stabilization Services (HSS) program.
According to the search warrant, the fraud investigation involves HSS providers who billed for various services intended to provide stable housing for Minnesotans.
The search warrant states, “The Program has proved to be extremely vulnerable to fraud.”
The vulnerability stems from limited requirements for service providers and the vast services they can provide for Medicaid reimbursement.
“Since Minnesota became the first state to offer Medicaid coverage for Housing Stabilization Services, dozens of new companies have been created and enrolled in the program. These companies, and the individuals who run them, have taken advantage of the housing crisis and the drug addiction crisis in Minnesota to prey on individuals who need help getting back on their feet as they recover from drug addiction,” the warrant says.
“These companies and individuals do so by contacting Medicaid-eligible people in halfway houses and residential drug treatment facilities and offering to help them find stable housing. After registering these people to receive housing stabilization services, the companies fraudulently claim to provide dozens of Program service hours to their new ‘clients.’ In reality, client after client has reported that they received little or no actual services or assistance from these companies. But the companies engaged in this scheme have received millions of dollars in Medicaid funds for housing stabilization services they did not actually provide,” it continues.
HSS providers can bill Medicaid for providing all kinds of housing-related services, including: consultations, housing transition services, housing sustaining services, moving expenses, and other services.
Alpha News on location during search warrant
The search warrant stems from an investigation into HSS-related fraud, including “wire fraud, healthcare fraud, and conspiracy to commit wire fraud and healthcare fraud.”
Twenty-two HSS providers—who received more than $8 million in Medicaid payments—operate at the same location: the Griggs Midway Building, the warrant explains.
Alpha News reporter Liz Collin was on scene Wednesday morning at that location when investigators served a search warrant—along with Acting U.S. Attorney Joe Thompson.
“Fraud is a huge problem in Minnesota. Hopefully today will help put a stop to it,” Thompson said.
Brilliant Minds Services LLC
The search warrant was executed at several businesses Wednesday morning, including one in the Griggs Midway Building: Brilliant Minds Services LLC, located in Suite 120.
Records indicate that Brilliant Minds Services is owned by Khalid Dayib and Mustafa Ali. Before April 2025, it was owned by Dayib, Ali, and a third partner, Moktar Hassan Aden.
Records also indicate that Brilliant Minds received more than $2.2 million in funds for providing HHS services between September 2022 and April 2025—claiming to have provided services to 340 individuals, the warrant says.
Yet, at least more than a dozen times, Brilliant Minds Services and another organization, Leo Human Services, received HSS payments on the same date—for the same recipient, according to the warrant.
The investigation into the billing and payments of these two providers indicated that “such billing was duplicative and not allowable,” the warrant says.
The investigation also revealed that people who supposedly received services from Brilliant Minds actually never did and had little interaction with them, according to the warrant.
In one case that was detailed in the warrant, Brilliant Minds “fraudulently received about $2,000” for services they claimed to provide to one individual. That individual said that “she never received any HSS services from Brilliant”—except for “one occasion when a person named Mohamed Mohamed” came to her residence “to drop off a vacuum.”
An ‘explosion’ in services claims
In July 2020, Minnesota became the first state to provide Medicaid coverage for Housing and Stabilization Services (HSS).
Since then, the number of claims—and the amount of Medicaid funds paid to HSS providers—have increased massively, according to the warrant.
In 2020, the associated costs for this program were estimated at $2.5 million. In 2021, the program paid out more than $21 million in claims. In 2024, the costs exceeded more than $100 million.
The alleged fraud related to the HSS program adds to the growing problems of fraud that have plagued Minnesota.
In 2022, the $250 million Feeding Our Future fraud scheme was discovered. Dozens have been convicted in the ongoing prosecution of those involved in the fraud scheme.
This is a developing story and may be updated.
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