Four Twin Cities men admitted to defrauding Minnesota's Housing Stabilization Services program out of more than $2.2 million, using artificial intelligence to fake records when insurers started asking questions.
Moktar Hassan Aden, 31; Mustafa Dayib Ali, 29; Khalid Ahmed Dayib, 26; and Abdifitah Mohamud Mohamed, 27, each pleaded guilty Friday to bilking the Medicaid-funded program through a company they called Brilliant Minds Services LLC. The Department of Justice announced the pleas on July 24, 2026, capping a case that began with criminal indictments last September and contributed to the state shutting down the entire housing program.
The scheme was straightforward. The four men set up Brilliant Minds in an office suite inside St. Paul's Griggs-Midway Building, enrolled the company as a Medicaid provider, and claimed to deliver housing stabilization services to roughly 350 people with disabilities and addictions. The Daily Caller News Foundation reported that instead of actually helping those people find and keep housing, the defendants billed for services never provided and inflated the hours for services that were.
Court filings put the total at $2,253,385.06 in fraudulent claims, money drawn from a program meant to keep some of Minnesota's most vulnerable residents off the streets.
When insurance companies began questioning the claims, the defendants did not scale back. They escalated. Employees at Brilliant Minds fabricated client notes, and the owners turned to artificial intelligence tools to generate fake records designed to satisfy the insurers' inquiries. The DOJ's announcement flagged the AI angle specifically, calling the case part of a "burgeoning trend of fraudsters" using artificial intelligence to "further a fraud scheme targeting health care programs in Minnesota and around the country."
The details of which AI tools were used and how remain unclear from the public record so far. But the DOJ's language signals that federal prosecutors see AI-assisted fraud as an emerging and growing problem, not an isolated episode.
Minnesota has become a recurring setting for large-scale Medicaid fraud cases. Federal authorities have arrested suspects in a separate $21 million Medicaid fraud scheme involving autism care centers in the state, and the pattern of taxpayer-funded programs being exploited by criminal enterprises shows no sign of slowing.
Assistant Attorney General Colin McDonald did not hold back about the men who admitted to the fraud. In a statement released with the guilty pleas, McDonald said:
"These defendants corruptly exploited vulnerable people and a vulnerable program to enrich themselves. Taxpayer dollars designed to provide shelter and support for the homeless and needy instead went to the pockets of these men. They have now admitted their fraudulent conduct and will face justice for their crimes."
McDonald added that the DOJ's work to root out fraud in Minnesota would continue. U.S. Attorney for the District of Minnesota Daniel Rosen reinforced the message, calling Medicaid fraud "a serious offense with real consequences."
Rosen pointed directly at the victims, not the system, not the politics, but the people left without help. He stated in the DOJ press release:
"These defendants stole funds intended to support vulnerable Minnesotans who rely on housing and recovery services. Their guilty pleas underscore my office's commitment to holding accountable those who exploit public programs."
The four men who pleaded guilty Friday were part of a larger group. In September 2025, federal prosecutors announced criminal indictments against eight defendants tied to the Housing Stabilization Services fraud. Besides Aden, Ali, Dayib, and Mohamed, the indictments named Christopher Adesoji Falade, Emmanuel Oluwademilade Falade, Asad Ahmed Adow, and Anwar Ahmed Adow. Six of the eight are part of Minnesota's Somali community, according to a spokesperson for the U.S. Attorney's Office cited by City Journal.
The current status of the four remaining defendants, whether they face trial, have entered plea negotiations, or are cooperating, is not addressed in the public record surrounding Friday's announcement. That leaves open the question of how wide the scheme actually ran and whether additional charges could follow.
The fraud was severe enough to help bring down the program itself. In November 2025, the Minnesota Department of Human Services announced it would terminate the Housing Stabilization Services program entirely, citing credible allegations of fraud. The people who genuinely needed help, Minnesotans struggling with disabilities and addiction, trying to keep a roof overhead, lost the program because fraudsters treated it as a cash register.
A House oversight report has accused the Walz administration of ignoring fraud warnings as billions in federal funds disappeared across multiple programs in the state. The Brilliant Minds case fits squarely into that larger pattern of lax oversight meeting brazen theft.
The guilty pleas landed just days after the Trump administration announced it would defer more than $1 billion in federal Medicaid payments to both California and Minnesota as part of a broader push against fraud. The DOJ's National Fraud Enforcement Division posted about the Brilliant Minds case on X, calling out the defendants by name and highlighting the AI fabrication angle.
Minnesota's fraud problems extend well beyond Medicaid housing services. Federal investigators recently captured a fugitive tied to the state's $250 million Feeding Our Future fraud after a four-year international manhunt. Taken together, these cases paint a picture of a state where federal benefit programs became magnets for organized fraud, and where state-level oversight failed to stop it before the damage was done.
Sentencing dates for Aden, Ali, Dayib, and Mohamed have not been announced. The specific charges to which they pleaded guilty, whether wire fraud, health care fraud, conspiracy, or some combination, are not detailed in the DOJ's public announcement.
Across the country, weakened fraud enforcement at the state level has made federal intervention more urgent. When state agencies cannot or will not police their own programs, taxpayers foot the bill twice, once for the stolen funds, and again for the federal resources needed to clean up the mess.
The Housing Stabilization Services program was built to help people who had nowhere else to turn. Four men named their fraud vehicle "Brilliant Minds," pocketed $2.2 million meant for the disabled and the addicted, and used AI to cover their tracks. The program is gone. The people it was supposed to help are still out there. And the bill, as always, went to the taxpayer.