Federal prosecutors have charged eight individuals in connection with a scheme that allegedly defrauded more than $8 million from a Minnesota housing assistance program. The funds, intended for vulnerable adults, were reportedly used to purchase luxury vehicles and real estate in Kenya, according to the indictment.
Key Takeaways
- Eight people face federal wire fraud charges for allegedly stealing over $8 million from Minnesota's Housing Stabilization Services program.
- Prosecutors claim the stolen taxpayer money was used to fund lavish lifestyles, including leasing luxury cars and buying property in Kenya.
- The Housing Stabilization Services program, which cost taxpayers $302 million instead of the estimated $12 million, has since been shut down by the state.
- The investigation, led by the FBI, is ongoing, and officials expect more charges to be filed.
Federal Indictment Details Allegations
An indictment unsealed on Thursday outlines federal charges against eight individuals accused of exploiting a state-run housing program. The U.S. Attorney's Office for the District of Minnesota alleges the defendants systematically defrauded the government by submitting false claims for services that were never provided.
The eight suspects charged with conspiracy to commit wire fraud are: Moktar Hassan Aden, 30; Mustafa Dayib Ali, 29; Khalid Ahmed Dayib, 26; Abdifitah Mohamud Mohamed, 27; Christopher Adesoji Falade, 62; Emmanuel Oluwademilade Falade, 32; Asad Ahmed Adow, 26; and Anwar Ahmed Adow, 25.
Four companies were also named in the initial court filings: Brilliant Minds Services LLC of St. Paul, Leo Human Services LLC of Brooklyn Park, Faladcare Inc. of St. Paul, and Liberty Plus LLC of Roseville. These entities were allegedly used to bill the state for fraudulent services.
Understanding the Housing Program
The Housing Stabilization Services program was established in 2020. It used Medicaid funds to help vulnerable adults, such as seniors and individuals with disabilities or addiction issues, secure and maintain housing. However, federal investigators later described the program as "extremely vulnerable to fraud."
Tracing the Misappropriated Funds
According to prosecutors, the defendants used the illicitly obtained funds to finance luxurious lifestyles. The indictment provides specific examples of how the money was allegedly spent, painting a picture of significant personal enrichment at taxpayer expense.
Several suspects reportedly used a joint American Express Platinum Card, accumulating nearly $500,000 in personal charges. Court documents allege that some individuals received as much as $400,000 each from the scheme.
Specific Alleged Expenditures
The indictment details several major purchases made with the stolen funds:
- One suspect allegedly used the money to invest in real estate properties in Kenya.
- Another leased a BMW and a high-end apartment in Roseville, Minnesota.
- A third suspect is accused of using program funds to lease a Mercedes-Benz and make other personal investments.
A Program's Staggering Cost Overrun
The Housing Stabilization Services program was initially projected to cost approximately $12 million over five years. Instead, it cost Minnesota taxpayers $302 million during that same period. While it remains unclear how much of that total was fraudulent, prosecutors have stated that most of the claims submitted by the defendants were bogus.
The Investigation and Government Response
The charges followed a large-scale investigation led by the Federal Bureau of Investigation (FBI). On July 16, federal agents conducted raids on multiple homes and businesses across the Minneapolis-St. Paul metropolitan area as part of the probe.
Court documents from the investigation revealed that just 14 providers had billed the state for $22 million over a 16-month period, raising significant red flags. In response to the growing evidence of fraud, the state of Minnesota officially shut down the Housing Stabilization Services program in August, shortly after the FBI raids.
"This investigation is ongoing, and we anticipate that additional charges will be forthcoming," stated Acting U.S. Attorney Joseph Thompson during a press conference announcing the indictments.
Thompson's statement indicates that the initial eight arrests may only be the beginning. Federal authorities are continuing to examine the records of other providers who participated in the program, suggesting the scope of the fraud could be even larger than what has been charged so far. The defendants will appear in federal court to face the wire fraud charges in the coming weeks.
