“Minnesota officials alerted to housing fraud two years before indictment,” reads the headline this morning in the Minnesota Star Tribune.
The “housing fraud” refers to the state Medicaid program Housing Stabilization Services (HSS), the fraud-ridden program operated by the state Department of Human Services (DHS).
Federal prosecutors indicted eight (8) defendants on fraud charges earlier this week, all involving alleged theft from the HSS program. Acting U.S. Attorney Joe Thompson announced that this week’s charges were merely the first wave of indictments to be handed down.
In this morning’s article, the Star Tribune digs deep into the HSS fraud backstory and finds the following, quoting from the article,
Two years before the U.S. Department of Justice indicted Christopher and Emmanuel Falade for allegedly defrauding the state, the Minnesota Department of Human Services was warned their company was engaging in potentially fraudulent activities.
The Falade’s were two of the eight indicted this week. The warnings, of course, went unheeded.
The Minnesota Department of Human Services (DHS) never investigated the complaint, referring it instead to an outside Medicaid administrator.
The DHS continued making payments to Faladcare for nearly two more years, shutting them off only after the FBI searched the company’s offices in July.
Federal prosecutors indicted the Falades on fraud charges for allegedly billing more than $2.2 million in services through the program. State data shows the company received more than $700,000 in 2024 after the DHS was made aware of fraud allegations.
To repeat, the Star Tribune found that the state paid out another $700,000 after the fraud warning was received.
The Minnesota Star Tribune discovered the tip in a trove of documents released by the DHS in response to an open records request.
The findings also conflict with DHS temporary Commissioner Shireen Gandhi’s statement to lawmakers this week that the department had received only “vague credible allegations of fraud” before this year.
I want to praise the Star Tribune for digging into the matter. But what took them so long? The industrial-scale fraud perpetrated against taxpayer-funded programs has been obvious to all sentient observers going back at least a decade.
As for HSS, the Star Tribune notes,
As allegations of fraud in Housing Stabilization Services snowballed, the state cut off payments to 115 providers that had billed for a total $100 million in services.
Last week, KARE-11 reminded its views of statements made by Gandhi’s predecessor, DHS Commissioner Jodi Harpstead,
In a January 2025 Senate hearing, 10 months after Hennepin County sent its first written warning, then-Commissioner Jodi Harpstead told lawmakers, “There’s a lot of rumors of fraud more than there is actual fraud.”
If you watched this week’s Joe Thompson press conference, he makes clear that not only individual welfare programs, like HSS, are overrun by fraud, but that entire classes of government programs are rife with fraud. All under the noses of the Walz-Ellison state government.
In March 2025, your correspondent testified in person (for nearly two hours!) in a state House heading on fraud in Minnesota government.
At that time, the official position of committee Democrats ran that there was no fraud, that I’d made it all up for some alleged partisan gain. The fall-back position was that maybe there had been some fraud back in the Covid days, but no longer.
Now, just six months later, the official position of the state Democratic party is that it’s the Democrats fighting against massive fraud, while opposed by the state Republicans.
Not even the Star Tribune is buying that one.