Federal prosecutors file new charges in $90 million Minnesota fraud cases

Federal prosecutors said Minnesota's Medicaid system was vulnerable to schemes that allegedly siphoned more than $90 million from children with autism, people needing housing help and other beneficiaries, charging 15 defendants in what officials called the state's two largest Medicaid fraud cases ever charged.

For Otter Tail County communities from Perham to Battle Lake, the cases matter because the money at stake is supposed to pay for legitimate care, not fake claims. When a benefit is abused, families waiting for autism therapy, housing support or other services are the ones left competing for fewer dollars.

At a downtown Minneapolis announcement, Todd Blanche, Robert F. Kennedy Jr., Dr. Mehmet Oz, U.S. Attorney Daniel N. Rosen and FBI Co-Deputy Director Christopher Raia framed the cases as part of a broader crackdown on what they called industrial-scale Medicaid fraud. Blanche said the defendants had "ripped off the American taxpayer," Kennedy called the arrests the "largest autism fraud bust in American history," and Kash Patel said stolen resources were taken from families who needed them.

Federal officials said the Minnesota cases include the two largest Medicaid fraud prosecutions ever charged in the state and the first of their kind involving additional Medicaid programs. The defendants included owners of child care centers and other Medicaid providers, a sign that billing schemes can move through ordinary-seeming businesses when screening and oversight do not keep pace with program growth.

One major scheme involved Housing Stabilization Services, a benefit Minnesota launched in July 2022 as the first Medicaid housing-stabilization program in the country. Another centered on the Early Intensive Developmental and Behavioral Intervention autism benefit, which pays for medically necessary services for people under 21 with autism spectrum disorder. Federal filings in December 2025 said one defendant used cash kickbacks to recruit children through parents in the Somali community and then submitted millions of dollars in fraudulent claims.

Colin M. McDonald said the alleged fraudsters treated disabled people like "lottery tickets" and spent the proceeds on luxury cars, real estate and jewelry. The Justice Department said it is responding by adding 15 new trial attorneys to its Health Care Fraud Section nationwide, but the cases also show a larger oversight failure: new and fast-growing Medicaid programs can become easy targets when billing review, provider screening and fraud detection lag behind the demand for services.