8 Feds Charged in Minnesota Housing Fraud Scheme

Federal Prosecutors Charge Eight in Minnesota Housing Fraud Scheme

Federal prosecutors have charged eight individuals with wire fraud in connection to a massive scheme that defrauded the Minnesota Housing Stabilization Services (HSS) program of millions of dollars. The case highlights a growing concern over the misuse of public funds intended to support vulnerable populations, including seniors and individuals with disabilities.

Acting U.S. Attorney Joseph H. Thompson emphasized the severity of the fraud during a press conference, stating that the level of abuse within these programs is staggering. He noted that the system of “trust but verify” no longer works effectively, as fraud has increasingly overshadowed legitimate services. Additional charges are expected as the investigation continues.

The Individuals Charged

The eight individuals charged include:

• Moktar Hassan Aden, age 30
• Mustafa Dayib Ali, age 29
• Khalid Ahmed Dayib, age 26
• Abdifitah Mohamud Mohamed, age 27
• Christopher Adesoji Falade, age 62
• Emmanuel Oluwademilade Falade, age 32
• Asad Ahmed Adow, age 26
• Anwar Ahmed Adow, age 25

Adam Jobes, Special Agent in Charge of IRS Criminal Investigation, described the charges as a significant blow to organized program fraud in Minnesota. He highlighted that the HSS program was designed to provide stability, assistance, and dignity to those in need, but instead, it became a vehicle for greed.

The Housing Stabilization Services Fraud

The HSS program, launched in 2020, aimed to assist seniors and individuals with disabilities, including those recovering from substance abuse or mental health issues, in finding stable housing. However, the program quickly became a target for fraudsters.

Over 4.5 years, the program paid out $302 million in claims, far exceeding its initial budget of $2.6 million annually. Hundreds of companies enrolled in the program, claiming to provide housing stabilization services. According to Thompson, many of these companies targeted vulnerable individuals, particularly those recently released from rehab facilities, and submitted inflated or fake reimbursement claims.

Thompson stated that most recipients did not receive the housing they needed, as the money was essentially stolen. He warned that this is just the first wave of charges, with more expected as the investigation unfolds.

Key Companies Involved

Several companies were implicated in the fraud, including Brilliant Minds Services LLC, which allegedly submitted fraudulent claims totaling over $2.3 million between September 2022 and April 2025. The company operated out of an office suite in St. Paul, where another provider, Foundation First Services LLC, also had a presence.

Faladcare Inc., run by Christopher and Emmanuel Falade, was accused of falsely claiming over $2.2 million in services for about 100 beneficiaries. Meanwhile, Leo Human Services LLC, led by Asad Adow, reportedly submitted inflated bills for around 250 beneficiaries, receiving approximately $2.7 million in payments. Adow allegedly used the funds for personal expenses, including a BMW, a leased apartment, and real estate investments in Kenya.

Liberty Plus LLC, owned by Anwar Adow, also engaged in similar practices. Employees were instructed to inflate their billable hours, leading to over $1.2 million in payments. Anwar Adow allegedly used the funds to purchase a Mercedes-Benz and make other luxury purchases.

Addressing the Problem

Minnesota has since cut off funding to the HSS program, working closely with prosecutors to build criminal cases. However, Thompson noted that much of the federal investigation was conducted independently, with financial links tracing back to Feeding Our Future, an organization that may have played a role in facilitating the fraud.

Thompson explained that the programs were new and experimental, making them particularly vulnerable to exploitation. When hundreds of companies enrolled at once, the system was overwhelmed, allowing fraud to flourish unchecked.

What’s Next?

Five of the defendants appeared in court on Thursday afternoon and pleaded not guilty to the charges. Mustafa Dayib Ali, through his defense attorney, expressed a desire to review the evidence and prove his innocence. All eight defendants will eventually be released on bond, with conditions that prohibit them from contacting anyone involved in the HSS program.

As the investigation continues, more charges are likely to follow, underscoring the complexity and scale of the fraud. The case serves as a stark reminder of the risks associated with large-scale public benefit programs and the importance of robust oversight.