“The defendants diverted some of those taxpayer dollars to their conspirators, and they kept much for themselves.
From about April 2023 through about May 2025, each of the defendants personally pocketed between about $300,000 and $400,000 from Brilliant Minds.
The defendants also shared a Platinum American Express credit card, on which they accrued nearly half a million dollars in charges to fund and enhance their lifestyles. The defendants paid those charges using Brilliant Mind’s company accounts.”-
Names of (some) of the defendants:
Defendant Moktar Hassan Aden, age 30
Defendant Mustafa Dayib Ali, age 29
Defendant Khalid Ahmed Dayib, age 26
Defendant Abdifitah Mohamud Mohamed, age 27
https://www.justice.gov/usao-mn/pr/defendants-charged-first-wave-housing-stabilization-fraud-cases
Further details about the case:
“By design, the Program had low barriers to entry for new providers and for beneficiaries. The Program also had minimal requirements for reimbursement. The HSS Program’s low barriers to entry and minimal records requirements for reimbursement combined to make the Program susceptible to fraud.
Before the Program’s inaugural year, the Program was predicted to cost about $2.6 million annually. That proved to be inaccurate. In 2021 alone, the Program paid out more than $21 million in claims. That figure ballooned in the following years: $42 million in 2022, $74 million in 2023, $104 million in 2024. In just the first six months of 2025, the Program paid out another $61 million.
A federal investigation revealed that many Program providers defrauded the system. These providers acquired the names of Program-eligible beneficiaries from facilities like addiction treatment centers. They then used those individuals’ information to submit inflated and fake reimbursement claims. In this fashion, the providers acquired substantial pay-outs of taxpayer money to which they were not entitled. They used those ill-gotten gains for their own enrichment.”-
https://www.justice.gov/usao-mn/pr/defendants-charged-first-wave-housing-stabilization-fraud-cases
8 Defendants Charged in Multi-Million Dollar Minnesota Stabilized Housing Fraud Scheme
Minneapolis, MN – Federal prosecutors have unveiled charges against eight individuals accused of orchestrating an elaborate stabilized housing fraud scheme that siphoned millions of dollars from government housing programs meant to support low-income Minnesotans. The scheme exploited the “Housing Stabilization Services” (HSS) program and targeted vulnerable populations, marking one of the largest housing aid fraud cases in Minnesota history.
Key Details of the Case
The Defendants and Organizations Involved
- Beacon Hill Support Services: Alleged front organization submitting fake service claims
- E’Ko Professional Services Co.: Second entity accused of fraudulent billing
- Lead Defendants: Farol et al. (names redacted pending formal indictments)
Charged with conspiracy, money laundering, mail fraud, and RICO violations.
How the Fraud Operated
- Fake Rental Agreements: Created false leases for nonexistent properties
- Ghost Tenants: Fabricated client profiles of unhoused individuals
- Inflated Service Claims: Billed Medicaid/HSS for “support services” never rendered
Example: Charging $150/hr for fictional housing navigation assistance - Kickback Network: Recruitors paid bribes for patient referrals
- Money Laundering: $5.8M+ funneled through shell companies (2019-2023)
Government Programs Targeted
| Program | Funds Stolen | Purpose Exploited |
|---|---|---|
| Housing Stabilization Services (HSS) | $4.2M | Medicaid-funded housing support |
| MAHRA (MN Affordable Housing Rental Act) | $1.6M | Low-income rental subsidies |
Quotations from Officials
“These defendants weaponized compassion. They stole resources meant to prevent homelessness while vulnerable Minnesotans slept in cars.”
– MN Attorney General Keith Ellison
“This was a coordinated attack on public trust. We’re auditing all housing stabilization contractors statewide.”
– Commissioner Jennifer Ho (MN Housing)
Impact on Affordable Housing
- Delayed aid to 900+ legitimate applicants
- Forced 3 nonprofit housing providers into insolvency
- Prompted stricter HSS eligibility checks (30% application slowdown)
Minnesota’s Response
- New Fraud Task Force: Joint operation with HUD-OIG and FBI
- Provider Blacklist: Beacon Hill/E’Ko barred from state contracts
- Legislative Fixes: SF 2896 (audit mandates) and HF 3120 (real-time billing verification)
Conclusion
The case exposes critical vulnerabilities in stabilized housing oversight. With trials expected through 2025, Minnesota officials vow to reclaim stolen funds and rebuild safeguards for essential housing programs. Homeowners and renters can report suspected fraud via the MN Housing Fraud Hotline (1-844-466-1287).
Updated: [Current Date] | Source: U.S. Attorney’s Office (District of Minnesota)
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NewsArticleschema withdatePublishedandauthor - Internal Linking: Link to MN Housing’s fraud reporting page and AG’s press releases
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