Feds charge 15 in $90M Minnesota childcare, Medicaid fraud

By Andrew Rice
The Center Square

Federal prosecutors announced charges against 15 people in Minnesota on Thursday in connection to Medicaid and childcare fraud costing taxpayers more than $90 million.

Prosectors said those who were charged targeted seven state-managed Medicaid programs in Minnesota, one of which has been entirely shut down due to a lack of funds.

“Today’s charges are unprecedented,” said Colin McDonald, assistant attorney general for the National Fraud Enforcement Division at the U.S. Department of Justice. “They include the highest loss amount ever charged in a Medicaid case in Minnesota, and the largest autism fraud scheme ever charged by the Department of Justice.”

In one instance, McDonald said, a person charged with fraud claimed to perform services for a man who needed constant medical supervision. The man was found dead after not receiving the services for which the government paid.

Other defendants improperly diagnosed children with autism and billed the government for autism services that were never provided, while providing parents with kickbacks for the services, McDonald said.

“We will not rest until every fraudster knows that the cost of stealing from the American people is far higher than any scheme is worth,” McDonald said.

Two people were also charged with defrauding $22 million from the Individualized Home Supports Program, which was meant to help disabled people live in their own homes.

The two people used disabled people “like lottery tickets” in order to get funds from the government and used those funds to buy luxury cars, jewelry and real estate, McDonald said.

“We will not let fraudsters bankrupt Medicare and Medicaid the same way that they bankrupted the housing stabilization services program,” McDonald said.

Robert F. Kennedy Jr., Secretary of the U.S. Department of Health and Human Services, said the some of the people charged deceived parents of children with fake autism diagnoses and fraudulent care.

“When criminals exploit these programs, taxpayers lose billions, and vulnerable children lose their access to care,” Kennedy said. “If we fail to confront the fraud aggressively, these programs will not survive for future generations in the form Americans rely upon them today.”

Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, said much of the fraud began during the COVID-19 pandemic. He said the pandemic led to a “general abandonment of principles” designed to protect the social welfare programs.

“Total Medicaid spending has increased by 50% since the start of COVID,” Oz said. “This rampant failure of this program is addressable, but we’ve got to be able to deal with it from within.”

One person included in the most recent set of charges fled from federal officials, according to FBI co-deputy director Chris Raia. He called for the public to submit information on the individual and displayed video of him.

“Too often here in Minnesota lately, fraudsters have turned government programs into their own personal ATMs,” Raia said.

McDonald also announced that additional prosecutors would be brought into the Midwest region to pursue individuals in relation to fraud. He said 15 attorneys would be deployed throughout the United States to pursue fraud charges, specifically in California and Minnesota.

He also said cooperation with Minnesota leaders has “fallen significantly short” of his desired standards. McDonald added that many of the fraud schemes in the state are still active.

“The fraudsters are agnostic as to whose money or what program they are defrauding, they just want our money,” McDonald said. “We are seeing that the fraud is ongoing, and we are interested in rooting it out, so we are working rapidly to bring into custody everyone who is facing charges and who faces arrest warrants.”