Minnesota HSS Program Fraud: $15.7M Medicaid Takedown
Eight defendants charged in the Minnesota Housing Stabilization Services takedown. The Department of Justice has charged eight defendants for defrauding the Minnesota Housing Stabilization Services Program of approximately $15.7 million. The cases form part of a broader Minnesota Health Care Fraud Takedown involving 15 defendants and more than $90 million in intended Medicaid losses. DOJ also announced the expansion of the Midwest Strike Force into the District of Minnesota and the addition of 15 new Health Care Fraud Section prosecutors nationwide.
The Minnesota Health Care Fraud Takedown
On May 21, 2026, the Department of Justice announced the Minnesota Health Care Fraud Takedown. The takedown includes charges against eight defendants tied to the Housing Stabilization Services Program. Four indictments and one Information have been unsealed in the District of Minnesota.
The HSS Program was a Medicaid benefit administered by the Minnesota Department of Human Services. The Program began in July 2020. Minnesota was the first state to cover housing stabilization through Medicaid. Costs grew from a projected $2.6 million per year to more than $104 million in 2024. The state shuttered the Program on October 31, 2025.
The charging documents identify common features across the four cases: inflated hours, services not provided, claims submitted for recipients who were hospitalized or in inpatient treatment, claims submitted for a deceased recipient, and falsified case notes presented to insurers and auditors. The Langley and Hodges indictments allege fraud tourism by Pennsylvania residents who flew to Minnesota to recruit beneficiaries and bill from outside the state.
On May 21, 2026, the Justice Department announced the Minnesota Health Care Fraud Takedown. Fifteen defendants face criminal charges connected to four Medicaid-funded programs in Minnesota. The total intended loss exceeds $90 million. The Department called two of the cases the largest Medicaid fraud prosecutions ever charged in the District of Minnesota.
The takedown covers four distinct fraud streams. The first stream is the Early Intensive Developmental and Behavioral Intervention (EIDBI) Program, the autism services benefit. The Department charged two defendants in connection with a $46.6 million scheme. The second stream is the Integrated Community Supports (ICS) Program. One defendant faces charges in a $1.4 million scheme that allegedly continued to bill for a recipient who had died. The third stream is the Individualized Home Supports (IHS) Program. Two defendants face charges in a $22 million scheme involving concealed ownership of residential properties. The fourth stream is the Housing Stabilization Services (HSS) Program. Eight defendants face charges connected to approximately $15.7 million in alleged fraud.
This post focuses on the four HSS Program cases the Department unsealed in early May 2026. Each case turns on the same statutory framework. Each turns on the same structural vulnerabilities in the Program. But the charging theories and factual allegations vary in ways that matter for sentencing exposure and defense.
How the Housing Stabilization Services Program Operated
The HSS Program was a Medicaid benefit. The Minnesota Department of Human Services administered the Program. The Program began in July 2020, making Minnesota the first state to offer Medicaid coverage for housing stabilization services. The Program was designed to help seniors and people with disabilities, including individuals with mental illness and substance use disorders, find and maintain housing.
The Program reimbursed four categories of services. Housing consultation paid approximately $174 per session for completing a Person-Centered, Housing Focused Plan. Housing transition services paid approximately $68 per hour for helping a recipient plan for, find, and move into housing. Housing sustaining services paid approximately $68 per hour for helping a recipient keep housing after move-in. The Program also reimbursed moving expenses up to $3,000.
Enrollment requirements were minimal. To become a provider, an individual needed to be at least 18 years old, submit an enrollment application to DHS, pass a background check, and complete approximately five hours of online training videos. To enroll as a recipient, an individual needed to be at least 18 years old, hold Medicaid coverage, have a documented disabling condition, and experience housing instability. A recipient meeting those requirements completed a Person-Centered Housing Focused Plan and could then enroll with a provider. The provider could begin billing.
To bill, the provider submitted the recipient's name, the type of service, and the number of hours worked. The Program's low barriers to entry and minimal documentation requirements created the structural conditions for the alleged fraud. The Department of Health and Human Services Office of Inspector General has warned repeatedly that Medicaid home and community-based services programs are vulnerable to billing fraud when documentation requirements are thin. See HHS-OIG analysis of Medicaid program integrity vulnerabilities.
The Program's financial trajectory illustrates the scale of the problem. The Department of Human Services projected an annual cost of approximately $2.6 million. In 2021, the first full year, the Program paid more than $26 million in claims. By 2024, the figure exceeded $104 million. On October 31, 2025, Minnesota shut the Program down.
The Four HSS Indictments: Common Charging Theories, Different Conduct
The Department charged eight defendants across four cases. Each case rests on the same federal statutes. Each alleges the same core conduct: submission of false claims to Minnesota Medicaid for housing services that were inflated, never delivered, or ineligible for reimbursement. But the charging structures differ. Three cases are indictments returned by a federal grand jury. One case is an Information filed by the U.S. Attorney's Office, signaling a likely plea agreement. The conduct alleged also differs in ways that affect sentencing exposure and the available defenses.
United States v. Meadows: Solo Operator, Three Substantive Counts
On May 7, 2026, a federal grand jury in the District of Minnesota returned an indictment against Sharmaine Meadows. The case is captioned United States v. Meadows, No. 26-cr-00090 (D. Minn.). Meadows registered Cradle of Love, LLC with the Minnesota Secretary of State in June 2019 and enrolled Cradle as an HSS provider with DHS in May 2020. The indictment charges three counts of healthcare fraud under 18 U.S.C. section 1347 and aiding and abetting under 18 U.S.C. section 2. The indictment also alleges criminal forfeiture under 18 U.S.C. section 982(a)(7).
The government alleges that Meadows signed DHS Provider Agreements in August 2019, February 2020, and May 2020. In those agreements, Meadows promised to comply with all federal and state requirements, to assume full responsibility for the accuracy of claims, to submit claims only after services were actually delivered, to maintain records that fully disclosed the extent of services provided, and to refund any overpayments received as a result of fraudulent billing. In the May 2020 HSS Provider Enrollment Agreement, Meadows acknowledged that misrepresentations in information submitted to DHS, including false claims or the concealment of a material fact, could be cause for denial or termination as a Medicaid provider.
The indictment alleges that on January 11, 2020, Meadows opened a Bank of America checking account ending in x6623 in the name of Cradle for the purpose of receiving HSS reimbursement from DHS. Meadows was the sole signatory on the account. From August 2020 through October 2025, Meadows directed Cradle of Love employees to report identical quantities of hours per Medicaid recipient per week up to the maximum allowed amount, when those services were not actually provided. The indictment also alleges submissions for services purportedly provided to Medicaid recipients on dates and times when those recipients were hospitalized, as well as claims that, when aggregated across employees and recipients, were temporally impossible.
Meadows allegedly billed Minnesota Medicaid approximately $4.3 million and received nearly $3.7 million based on the false and fraudulent claims. The three substantive counts charge specific claims: a $206.04 claim for recipient A.T. on July 22, 2022 (Medicaid Claim No. 72223000402031366); a $343.40 claim for recipient S.R. on October 24, 2023 (Claim No. 72333200403082618); and a $120.19 claim for recipient P.D. on November 28, 2023 (Claim No. 52334000400049864). Each count carries a statutory maximum of 10 years. The Meadows indictment does not charge a conspiracy count. The case is structured as a solo enterprise, with no other defendants or unindicted co-conspirators identified.
United States v. Omar and Abdi: Conspiracy, Multiple Companies, and a Charged Claim for a Deceased Recipient
On May 12, 2026, a federal grand jury returned an indictment against Muhammad Abdulqadir Omar and Ibrahim Bashir Abdi. The case is captioned United States v. Omar, et al., No. 26-cr-00092 (D. Minn.). Omar and Abdi formed NHHC in June 2022. Omar submitted a Provider Agreement to enroll NHHC as a Minnesota Health Care Programs provider in August 2022. The defendants represented to DHS in a Provider Profile Report that they were equal owners of NHHC. In April 2023, Omar individually formed SHHC and submitted a Provider Agreement enrolling SHHC as a Minnesota Health Care Programs provider in July 2023. The indictment charges conspiracy to commit healthcare fraud under 18 U.S.C. section 1349 and four substantive healthcare fraud counts under section 1347 and section 2.
In November 2022, Omar and Abdi opened a business checking account at JPMorgan Chase Bank ending in 7217 in the name of NHHC. In April 2023, they opened a second NHHC checking account at JPMC ending in 7809. Both accounts received DHS reimbursement for NHHC's HSS claims, and both Omar and Abdi were signatories. On September 12, 2023, Omar opened two additional JPMC business checking accounts ending in 7525 and 8656 in the name of SHHC. Omar was the sole signatory on the SHHC accounts.
The Omar and Abdi indictment is the most factually developed of the four. The government alleges that the defendants hired housing coordinators who were documented as providing services to multiple recipients at the same time, an objective impossibility on its face. The indictment alleges that between August 2024 and May 2025, a compliance manager at NHHC told Omar and Abdi that housing coordinators did not actually meet with Medicaid recipients, failed to communicate with recipients, and did not provide services as reflected in the claims. The defendants allegedly did not alter their billing practices after receiving that notice. This sequence supports a willful blindness theory at trial and a sentencing enhancement for obstruction or aggravating role.
The most striking factual allegation involves a deceased Medicaid recipient. Between September 7, 2023 and December 30, 2023, the defendants allegedly submitted claims for 92 hours of HSS services purportedly provided to a recipient after the recipient's death. The indictment also alleges that Omar and Abdi created falsified case notes describing services NHHC purportedly delivered and provided those notes to insurers and auditors to justify the false and fraudulent claims.
Through NHHC, the defendants allegedly billed Minnesota Medicaid approximately $3.3 million between September 2022 and March 2025 and received approximately $3.2 million. Through SHHC, Omar allegedly billed approximately $490,000 between August 2023 and April 2025 and received approximately $480,000. The indictment further alleges that Omar used over $150,000 of fraud proceeds to invest in real estate in Nairobi, Kenya and more than $60,000 to lease a Mercedes-Benz. Abdi allegedly used over $20,000 of fraud proceeds to invest in real estate in Nairobi.
The four substantive counts charge specific claims involving four different recipients: Count 2 (recipient N.A., NHHC, October 18, 2024, $137.36); Count 3 (recipient S.M., NHHC, July 14, 2023, $137.36); Count 4 (recipient L.H., NHHC, August 16, 2024 to August 31, 2024, $824.16); and Count 5 (recipient R.W., SHHC, January 31, 2025, $137.36, charged against Omar alone). Each substantive count carries a 10-year statutory maximum. The section 1349 conspiracy count carries the same statutory maximum.
United States v. Langley: An Information Filed by the U.S. Attorney
On May 13, 2026, the U.S. Attorney for the District of Minnesota filed an Information against Candice Langley. The case is captioned United States v. Langley, No. 26-cr-00093 (D. Minn.). The filing charges a single count of conspiracy to commit healthcare fraud under section 1349, along with criminal forfeiture under section 982(a)(7).
An Information signals a different posture from an Indictment. An Information is filed by a U.S. Attorney without grand jury action. A defendant must consent to proceed on an Information rather than an Indictment under Federal Rule of Criminal Procedure 7(b). The procedural posture typically signals a plea agreement or a defendant's intent to cooperate with the government.
The Langley Information alleges a textbook fraud tourism scheme. Langley lived in Philadelphia, Pennsylvania. In December 2021, an unidentified individual informed Langley and others that the Minnesota HSS Program was a lucrative opportunity. Langley and at least four of her associates, all living outside Minnesota, decided to become Minnesota HSS providers. In February 2022, each filed corporate registration paperwork with the Minnesota Secretary of State and submitted enrollment paperwork to the HSS Program. Langley registered Candice Carene Inc. in February 2022, completed mandatory training that set forth the services for which she was permitted to submit claims, and certified she would not submit false or fraudulent claims. Through Candice Carene Inc., Langley began submitting claims to the HSS Program in August 2022.
The Information also alleges that Langley assisted in the operation of a second provider, referred to as Company 1, owned by Co-Conspirator 1. Co-Conspirator 1 began submitting claims through Company 1 in August 2022 as well.
The Information alleges that the scheme ran from February 2022 through July 2025 and that Langley and her co-conspirators repeatedly flew from Philadelphia to Minneapolis to recruit beneficiaries. They then used the beneficiary names and identifying information to bill the HSS Program for services that the Information alleges were not actually provided. Through Candice Carene Inc. and Company 1, Langley and her co-conspirators billed Minnesota Medicaid approximately $3,504,307 for HSS services purportedly provided to approximately 350 beneficiaries. Minnesota Medicaid paid approximately $3,476,244, a payment rate near 99 percent of the amount billed, reflecting the Program's minimal pre-payment review.
United States v. Hodges: Conspiracy, Aiding and Abetting, and False Statements to a Government Agency
On May 20, 2026, a federal grand jury returned an indictment against Deborah Hodges. The case is captioned United States v. Hodges, No. 26-cr-00101 (D. Minn.). The indictment charges one count of conspiracy to commit healthcare fraud under section 1349 and four substantive healthcare fraud counts under section 1347 and section 2. The indictment also alleges criminal forfeiture under section 982(a)(7).
The Hodges indictment follows the same fraud tourism pattern as Langley but adds a distinct charging theory: false representation of corporate independence. The indictment alleges that Hodges and at least two of her associates were residents of Pennsylvania. In February 2022, all three filed corporate registration paperwork in Minnesota and enrolled in the HSS Program. Hodges registered House of Heroes (HOH). Co-Conspirator 1 registered Company 1. Co-Conspirator 2 registered Company 2. Each began submitting HSS claims in August 2022.
Hodges signed the HOH Provider Agreement with DHS as the "President/CEO" of HOH. In that agreement, Hodges represented that HOH would submit accurate claims, refund any overpayments for fraudulent billing, and maintain records that disclosed the services HOH provided to Medicaid recipients. The indictment alleges that during the course of the scheme, despite representing to DHS that they operated independent companies, Hodges, Co-Conspirator 1, and Co-Conspirator 2 worked together to find Medicaid recipients, recruited and interviewed employees that worked for each of the providers, and provided consultations and created housing plans for the same Medicaid recipients regarding whom false and inflated claims were submitted for payment by HOH, Company 1, and Company 2. The shared operation theory provides the government with a discrete misrepresentation: the very independence the defendants asserted to DHS to obtain three separate billing privileges was, on the government's account, false at the time it was made.
The indictment also alleges that Hodges knowingly and willfully submitted claims for services HOH did not provide and for more services than HOH provided. One substantive count involves a claim for HSS services purportedly provided to a Medicaid recipient on a date when the recipient was in inpatient treatment and could not have received the claimed services. The indictment further alleges that Hodges created records falsifying the services HOH claimed it provided and lied to a government agency concerning whether certain employees who resided in Pennsylvania worked remotely or in Minnesota. That false statement allegation, while not separately charged as obstruction or as a section 1001 violation, anticipates the kind of conduct that often supports additional charges or sentencing enhancements at later stages.
From August 2022 through August 2025, Hodges, Co-Conspirator 1, and Co-Conspirator 2, through HOH, Company 1, and Company 2, allegedly billed Minnesota Medicaid approximately $5.3 million and received approximately $5.2 million based on the false and fraudulent claims. The four substantive counts charge specific claims: Count 2 (recipient E.C., February 13, 2023, Claim No. 72309400405043776, $274.72); Count 3 (recipient P.C., February 22, 2024, Claim No. 72419500400039085, $206.04); Count 4 (recipient J.G., August 14, 2024, Claim No. 72431700401070445, $274.72); and Count 5 (recipient L.B., November 7, 2024, Claim No. 72435900408029464, $171.70).
The Hodges indictment differs from Langley in three important ways. First, Hodges is charged with an Indictment rather than an Information, signaling no presumed cooperation with the government. Second, Hodges faces four substantive counts in addition to the conspiracy count, significantly increasing her statutory maximum exposure. Third, the indictment includes both the false statement allegation and the false-independence theory, neither of which appears in the Langley charging document.
The Federal Statutory Framework
All four HSS cases rest on the same federal statutes. Each statute carries a distinct burden of proof and a distinct sentencing exposure. The charging decisions made in the four HSS cases reflect strategic choices about how to maximize that exposure.
Section 1347 requires the government to prove that the defendant knowingly and willfully executed, or attempted to execute, a scheme to defraud a healthcare benefit program. Medicaid is a healthcare benefit program under 18 U.S.C. section 24(b). The intent element is the critical battleground. A submission error, a documentation gap, or even sloppy billing practices do not satisfy section 1347. The government must prove the defendant knew the claims were false and intended to defraud.
Section 1349 punishes the agreement. The government does not have to prove an overt act. The statutory maximum mirrors the underlying offense. A conspiracy charge expands the government's evidence at trial. Co-conspirator statements come in under Federal Rule of Evidence 801(d)(2)(E). Conduct by other co-conspirators in furtherance of the agreement becomes admissible against the defendant.
The Materiality Theory: Provider Certifications as the Anchor for Section 1347
The four indictments share a common materiality theory built on the DHS Provider Agreement. Each defendant signed an agreement with DHS in connection with HSS enrollment. Each agreement contains representations about claim accuracy, service delivery, recordkeeping, and overpayment refunds. The Meadows indictment quotes the August 2019, February 2020, and May 2020 Provider Agreements directly. The Omar Provider Agreement representations are referenced for August 2022, March 2023, and February 2024. Hodges signed her HOH Provider Agreement in February 2022 as "President/CEO." Langley certified through the enrollment process that she would not submit false or fraudulent claims.
The Provider Agreement language functions as the materiality hook for the section 1347 charge. A claim submitted in violation of the certifications signed at enrollment is, on the government's theory, a claim submitted by means of materially false and fraudulent pretenses. The government must prove the misrepresentation was capable of influencing the payment decision. A certification that the provider would submit claims only for services actually delivered, paired with documented billing for hours that were inflated, never provided, or temporally impossible, satisfies that standard.
The Provider Agreement certifications also support the government's intent theory. Each defendant completed mandatory training instructing on which services were billable. Each defendant signed acknowledgments that misrepresentations could result in denial or termination as a Medicaid provider. Those acknowledgments make a "regulatory misunderstanding" defense harder to mount. The government will argue that the defendants knew the conduct alleged in the indictments was prohibited because they were told so in writing before they began billing.
Key Differences Across the Four HSS Indictments
The four HSS cases share the same statutory framework. The cases differ in charging structure, factual allegations, and the procedural posture of each defendant. Those differences matter for sentencing exposure and for the defenses available at trial.
| Case | Charging Document | Counts | Alleged Loss | Distinguishing Allegations |
|---|---|---|---|---|
| Meadows (Cradle of Love) | Indictment | 3 substantive section 1347 counts | $3.7M received on $4.3M billed | Solo operator. No conspiracy count. Identical maximum-hour billing. Claims for hospitalized recipients. Temporally impossible aggregate hours. |
| Omar and Abdi (NHHC and SHHC) | Indictment | 1 section 1349 conspiracy + 4 substantive section 1347 counts | ~$3.7M received on ~$3.8M billed | Compliance manager warnings ignored. Claims for deceased recipient. Falsified case notes provided to auditors. Real estate in Nairobi. Mercedes-Benz lease. |
| Langley (Candice Carene Inc.) | Information | 1 section 1349 conspiracy count | ~$3.48M received on $3.5M billed | Fraud tourism from Philadelphia. ~350 beneficiaries. Procedural posture suggests cooperation or plea. Recruited beneficiaries on flights from Philadelphia. |
| Hodges (House of Heroes) | Indictment | 1 section 1349 conspiracy + 4 substantive section 1347 counts | ~$5.2M received on $5.3M billed | Fraud tourism from Pennsylvania. False representation of independent companies. Lied to a government agency about employee locations. Claims for recipient in inpatient treatment. |
Three observations stand out. First, the Meadows indictment is the only one that does not charge conspiracy, reflecting the solo-operator structure of Cradle of Love and the absence of identified co-conspirators in the public record. The other three cases involve multiple defendants or unindicted co-conspirators that support the section 1349 count. Second, the Omar and Abdi indictment is the most factually aggressive of the four. The allegations of compliance manager warnings, a charged claim for a deceased recipient, and falsified case notes presented to auditors track the government's preferred theory in healthcare fraud cases involving willful blindness and obstruction of internal oversight. Third, the Langley Information stands apart procedurally. An Information typically signals plea negotiations, a cooperation agreement, or both.
The Parallel Timeline: Pennsylvania Fraud Tourism in February 2022
One pattern across the cases warrants closer attention. Both Langley and Hodges resided in Pennsylvania. Both became aware of the HSS Program in late 2021. Both filed Minnesota corporate registrations in February 2022. Both involve unidentified co-conspirators referred to as "Co-Conspirator 1" and, in Hodges, "Co-Conspirator 2." Both schemes began submitting claims in August 2022, the same month Meadows had been billing for nearly two years.
The parallel timing is unlikely to be coincidence. The Langley Information references "at least four of her associates" who decided to become Minnesota HSS providers. The Hodges indictment references "at least two of her associates in Pennsylvania" who did the same. The overlap suggests a broader Pennsylvania-based network that the government is unwinding by charging participants individually as the evidence develops. The Langley Information, charged by Information rather than Indictment, may reflect a defendant who is providing information about the broader network. The unindicted co-conspirators in both cases are likely to be charged separately if the cooperation evidence supports it. Providers and individuals connected to the broader network should expect additional charging activity.
The Enforcement Significance: Midwest Strike Force Expansion and the Data Fusion Center
The HSS cases are not isolated prosecutions. They are the visible output of an expanding federal enforcement infrastructure. On the same day the Department announced the takedown, it announced the expansion of the Midwest Health Care Fraud Strike Force to include the District of Minnesota. The Midwest Strike Force previously operated from Detroit and Chicago. The Department also announced funding for 15 new Trial Attorney positions dedicated to Medicaid fraud nationwide.
The HSS takedown was supported by the Health Care Fraud Section's Data Fusion Center. The Fusion Center combines Medicaid claims data, HHS-OIG investigative leads, FBI intelligence, and CMS billing data with algorithmic outlier detection. Providers whose billing patterns deviate from peer norms now appear on federal dashboards in near real time. The Fusion Center capability gives federal prosecutors a faster route to indictment, with less advance warning to providers and less opportunity for providers to identify exposure and consult counsel before charges are filed.
Acting Attorney General Todd Blanche described the takedown as "just the tip of the iceberg." Assistant Attorney General Colin McDonald of the new National Fraud Enforcement Division committed the 15 new Trial Attorney positions to existing Strike Forces in California, Florida, New York, and Texas, and to the National Rapid Response Strike Force. The HHS-OIG, FBI, IRS-CI, Homeland Security Investigations, and U.S. Postal Inspection Service all coordinated with DOJ on the Minnesota cases. Federal officials have made clear that additional Medicaid waiver and home and community-based services programs will draw similar enforcement attention across the country.
What the HSS Cases Signal for Providers in Medicaid Waiver Programs
The Minnesota HSS Program is closed. But the structural features that made it vulnerable to fraud, including low documentation requirements and high reimbursement rates for services that are difficult to verify after the fact, exist across Medicaid waiver and home and community-based services programs nationwide. Every state operates similar programs. Every program presents similar vulnerabilities. And every program is now in the field of view of the expanded Health Care Fraud Section and its Data Fusion Center.
The charging decisions in the HSS cases reflect a federal enforcement model that any provider operating in a Medicaid waiver program should understand. The government looks for outlier billing patterns. The government looks for impossible service combinations, such as identical hours billed across multiple recipients on the same day or services billed during hospitalization or after death. And the government looks for evidence of willful blindness, such as compliance manager warnings that went unaddressed.
Each of these markers appears in the four HSS indictments. None of them is unique to Minnesota. Each of them is a feature of federal Medicaid fraud enforcement going forward.
Defense Considerations in HSS and Other Medicaid Waiver Prosecutions
The four HSS cases illustrate the importance of trial-ready defense from the earliest stages of a federal healthcare fraud investigation. The intent element under section 1347 is the most defensible piece of the government's case. The line between regulatory noncompliance and criminal fraud runs through what the defendant knew and what the defendant intended. That line is often blurry in Medicaid waiver programs where documentation requirements are thin and where billing practices may have evolved without clear regulatory guidance.
Defendants in these cases face overlapping criminal, civil, and administrative exposure. CMS and state Medicaid agencies pursue billing privilege actions and overpayment recoveries in parallel with the criminal case. Statements made to CMS auditors or to state agency investigators are not privileged. Those statements can and will be used in a parallel criminal proceeding. Providers who respond to administrative inquiries without coordinated criminal defense counsel risk creating evidence the government will use against them at trial.
The firm's healthcare fraud defense practice handles federal cases involving Medicaid waiver programs, home and community-based services programs, and other Medicaid-funded benefit programs across the country.
The Minnesota Health Care Fraud Takedown is part of a coordinated federal enforcement strategy that combines the new National Fraud Enforcement Division, the expanded Strike Force network, the Data Fusion Center, and the Vice President's Task Force to Eliminate Fraud. The same enforcement model that produced the HSS cases will be deployed against Medicaid waiver programs nationwide. Providers who hold contracts in these programs should expect heightened audit activity, faster movement from audit to criminal referral, and shorter windows between investigation and indictment.
Frequently Asked Questions: Minnesota HSS Program Fraud and Medicaid Waiver Enforcement
What is the Minnesota Housing Stabilization Services Program?
The Housing Stabilization Services Program was a Minnesota Medicaid benefit administered by the Minnesota Department of Human Services that began in July 2020. The Program reimbursed providers for housing consultation, housing transition services, housing sustaining services, and moving expenses delivered to seniors and people with disabilities, including individuals with mental illness and substance use disorders. Consultants could bill Medicaid approximately $174 per consulting session. Providers could bill approximately $68 per hour for transition and sustaining services. Minnesota was the first state in the country to offer Medicaid coverage for these services. Program enrollment requirements were low. Minnesota shuttered the Program on October 31, 2025 due to widespread fraud.
How does the federal healthcare fraud statute apply to Medicaid waiver and home and community-based services billing?
18 U.S.C. section 1347 makes it a federal crime to knowingly execute a scheme to defraud a healthcare benefit program or to obtain money from such a program by means of materially false or fraudulent pretenses. Medicaid qualifies as a healthcare benefit program under 18 U.S.C. section 24(b). State home and community-based services waiver programs funded through Medicaid fall within the statute when a provider submits claims to a state Medicaid agency that pays from federal and state Medicaid funds.
The government must prove the defendant knowingly submitted false claims and acted with intent to defraud the program. A regulatory billing error or documentation gap alone is not a federal crime. The intent element distinguishes criminal fraud from regulatory noncompliance.
What is fraud tourism in federal healthcare fraud cases?
Fraud tourism is the term federal prosecutors use to describe a pattern in which individuals travel from one state to another to enroll as providers in a state Medicaid program with lower barriers to entry, then bill that program from outside the state. The Minnesota HSS Program drew defendants from Pennsylvania who registered Minnesota corporations, submitted enrollment paperwork to the Minnesota Department of Human Services, and billed Minnesota Medicaid for services they allegedly never provided in the state where the recipients lived.
The pattern generates venue for prosecution in the District of Minnesota and gives the government opportunities to charge wire fraud and conspiracy theories that reach across state lines. The Langley and Hodges cases both involve this charging theory.
How does a parallel CMS or state Medicaid audit interact with a federal criminal investigation?
CMS and state Medicaid agencies pursue administrative actions, billing privilege revocations, and overpayment recoveries in parallel with federal criminal investigations. Information generated through audits and administrative responses flows back to federal prosecutors. The HHS-OIG, CMS Center for Program Integrity, and state Medicaid Fraud Control Units share data and investigative leads across criminal and civil lines.
Statements made to CMS auditors or to state agency investigators are not privileged. Those statements can be used in a parallel criminal proceeding. Providers who receive an audit request, a Civil Investigative Demand, or a payment suspension notice while a criminal investigation may be developing face a coordination problem that requires criminal defense counsel from the outset.
What is the difference between a conspiracy charge under 18 U.S.C. section 1349 and a substantive healthcare fraud charge under 18 U.S.C. section 1347?
Section 1347 punishes the substantive offense of executing a scheme to defraud a healthcare benefit program. Each charged claim typically represents a separate substantive count, and each count carries up to 10 years in prison.
Section 1349 punishes the agreement to commit healthcare fraud and carries the same statutory maximum as the underlying offense. The government does not have to prove an overt act under section 1349. A conspiracy charge expands the field of admissible evidence to include co-conspirator statements under Federal Rule of Evidence 801(d)(2)(E) and reaches conduct committed by other members of the conspiracy in furtherance of the agreement. Prosecutors often combine the conspiracy count with multiple substantive counts to increase sentencing exposure.
What is the Health Care Fraud Data Fusion Center?
The Health Care Fraud Data Fusion Center is a federal analytics capability operated through the DOJ Fraud Section's Health Care Fraud Unit. It combines Medicare and Medicaid claims data, HHS-OIG investigative leads, FBI intelligence, CMS billing privilege actions, and other federal data sources. The Fusion Center applies algorithmic outlier detection to identify providers whose billing patterns deviate from peer norms.
Federal prosecutors then use the Fusion Center output to build cases that reach indictment more quickly and with less advance warning to the provider. The Fusion Center contributed to the Minnesota Health Care Fraud Takedown announced on May 21, 2026.
What is the procedural significance of an Information versus an Indictment in a federal healthcare fraud case?
An Indictment is a formal charging document returned by a federal grand jury. The Fifth Amendment requires a grand jury indictment for any "infamous crime," including all federal felony offenses, unless the defendant waives that right. An Information is a charging document filed directly by a U.S. Attorney without grand jury action.
Under Federal Rule of Criminal Procedure 7(b), a defendant must waive indictment in open court to proceed on an Information for a felony offense. The waiver typically reflects a plea agreement, a cooperation agreement, or both. In the Minnesota HSS takedown, United States v. Langley proceeded by Information, while the cases against Meadows, Omar and Abdi, and Hodges proceeded by Indictment.
Where does Armstrong & Bradylyons PLLC defend federal healthcare fraud cases?
Armstrong & Bradylyons PLLC defends healthcare providers, executives, and individuals in federal healthcare fraud investigations and prosecutions nationwide. Scott Armstrong has tried sixteen complex federal cases, including nine healthcare fraud jury trials. He served for nearly a decade at DOJ's Fraud Section as an Assistant Chief. Drew Bradylyons served as Assistant Chief of the DOJ Healthcare Fraud Unit's South Florida Strike Force and as Chief of the Financial Crimes and Public Corruption Unit at the U.S. Attorney's Office for the Eastern District of Virginia. He investigated and supervised cases involving more than $1 billion in fraudulent claims to Medicare, Medicaid, and TRICARE. The firm represents clients in every federal district where DOJ brings healthcare fraud cases, including the District of Minnesota and other districts now served by the expanded Midwest Strike Force.
Facing a Federal Medicaid or Healthcare Fraud Investigation?
Armstrong & Bradylyons PLLC defends providers, executives, and individuals in federal Medicaid and healthcare fraud investigations nationwide. As former DOJ Fraud Section prosecutors, Scott Armstrong and Drew Bradylyons built and tried the same theories driving the Minnesota Health Care Fraud Takedown.
