Four Minnesota men pleaded guilty after prosecutors say they stole roughly $2.2 million from a state housing program and used AI to fabricate records when their claims were scrutinized.
Four men from the Twin Cities area admitted guilt in a scheme that prosecutors say siphoned about $2.2 million from Minnesota’s Housing Stabilization Services program between April 2022 and April 2025. Authorities allege the group enrolled a shell company as an HSS provider and submitted thousands of claims for services that were never delivered or were inflated to boost reimbursements. The operation reportedly targeted vulnerable populations, including seniors and people with mental illness or substance use disorders.
The defendants have been identified as Moktar Hassan Aden, 31, Mustafa Dayib Ali, 29, Khalid Ahmed Dayib, 26, and Abdifitah Mohamud Mohamed, 27. They formed Brilliant Minds Services LLC in a St. Paul office and listed the business as an HSS provider, according to court documents. Prosecutors say roughly 350 Medicaid recipients were signed up and billed for assistance that never materialized.
When investigators asked for documentation to support the HSS claims, the defendants allegedly produced fabricated paperwork created with artificial intelligence tools, including ChatGPT. That pattern — using AI to invent supporting records after the fact — is an alarming twist prosecutors highlight as a growing method to mask healthcare fraud. The falsified files were meant to give the appearance of legitimate housing and support services when none were actually provided.
Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division offered a blunt assessment: “These defendants corruptly exploited vulnerable people and a vulnerable program to enrich themselves,” he said. “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. In the meantime, our work to stamp out fraud in Minnesota will continue in abandon.”
United States Attorney for the District of Minnesota Daniel N. Rosen also addressed the cases, saying: “Medicaid fraud is a serious offense with real consequences. 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.” Those public statements frame the prosecutions as part of a broader push to protect federal benefit programs.
Each defendant pleaded guilty to one count of wire fraud in hearings held between July 7 and July 23, 2026. All four face a statutory maximum of 20 years in prison for that charge; actual sentences will be set by a federal district court judge after consideration of the sentencing guidelines and other factors. No sentencing dates have been announced yet.
The case is being investigated by multiple federal agencies, including the FBI, the U.S. Internal Revenue Service Criminal Investigation unit, and the Department of Health and Human Services Office of Inspector General. Prosecutors on the matter are Trial Attorney Raymond E. Beckering III of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Matthew Murphy for the District of Minnesota.
The prosecutions come as the Justice Department has recently reorganized its anti-fraud efforts, creating a National Fraud Enforcement Division on April 7 to centralize and intensify fraud investigations. That division’s work is described as supporting a whole-of-government push to reduce fraud, waste, and abuse in federal benefit programs, which officials say has been an ongoing priority for multiple administrations and task forces.
Federal health care strike forces have also been active for years: the Health Care Fraud Strike Force initiative has charged thousands of defendants across the country who allegedly billed federal programs and private insurers for services that were not provided or were unlawfully inflated. Agencies including the Centers for Medicare & Medicaid Services and the HHS Office of Inspector General continue to develop tools and oversight to identify and hold accountable providers tied to schemes involving fabricated records, fictitious patients, or sham companies.
