Feds Raid Twin Cities Homes, Offices in Medicaid Fraud Probe

One of the buildings that housed an office searched as part of a federal investigation into alleged Medicaid fraud involving Minnesota’s Housing Stabilization Services program.

Federal agents executed search warrants at multiple homes and offices across the Twin Cities this week as part of a widespread Medicaid fraud investigation in the Housing Stabilization Services program.

A recently unsealed search warrant filed July 12 in U.S. District Court authorized the search of eight locations connected to businesses including Leo Human Services, Liberty Plus LLC, Pristine Health LLC, Brilliant Mind Services, and Faladcare Inc.

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The investigation has centered on what federal agents describe as a “massive scheme to defraud” a state-run Medicaid program that provides housing support for seniors and people with disabilities.

The Housing Stabilization Services program launched in 2020 as the first in the country to offer Medicaid coverage for Housing Stabilization Services and the program has grown rapidly. State data shows it paid out more than $104 million in 2024 and over $61 million in the first half of 2025—numbers far exceeding original projections. Authorities believe some providers used the program to bill for services that were never delivered, often targeting vulnerable clients in treatment centers and halfway houses.

In one case, federal investigators say Leo Human Services billed Medicaid over $2.7 million between late 2022 and early 2025 for services to nearly 300 clients. Several of those clients later told law enforcement they received little or no assistance. Investigators also flagged a pattern of copy-pasted service notes. One client was listed across dozens of entries describing job search help using nearly identical wording over several months with no signs of meaningful engagement.

Federal investigators allege that Liberty Plus LLC fraudulently billed Medicaid for housing-related services that clients never requested and did not receive. According to the search warrant affidavit, several clients tied to Liberty Plus said they had no memory of working with the company, did not sign any service plans, and were unaware that their names had been used for billing. Despite this, Medicaid was charged for multiple sessions using vague and repetitive service descriptions. Authorities believe Liberty Plus submitted these claims as part of a larger effort to exploit the Housing Stabilization Services program by fabricating documentation and targeting clients without their knowledge or consent.

Pristine Health LLC is also named in the investigation. One client told investigators he never received services from Pristine, despite records showing more than $6,000 in Medicaid claims filed under his name. His wife said she contacted Pristine after being referred by a treatment provider, but no one ever followed up. She told investigators that after media coverage surfaced about fraud in the program, Pristine staff began contacting her repeatedly, offering to take her to the courthouse to sign documents.

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Brilliant Mind Services is accused of billing Medicaid for housing services that were never requested or received by the clients listed in their records. In one instance, Brilliant Minds billed and received nearly $14,000 in Housing Stabilization Services payments for services that were never provided, according to investigators. Records show the company collected payments for work between December 2023 and August 2024 despite offering no actual assistance. Investigators also found at least 13 instances where Brilliant Minds and Leo Human Services both billed—and were paid—for services to the same person on the same day, a practice they determined was duplicative and not allowed. DHS records show Brilliant Minds was the seventh-highest biller in the program statewide in 2024, receiving approximately $1.29 million.

Faladcare is named in the search warrant after a review by a managed care organization flagged the company as a billing outlier, with unusually high claims per client and services often recorded long after the alleged service dates. Investigators found that many records were created from memory years later, and some clients whose names were used for billing reported receiving no meaningful housing support. In several cases, Faladcare billed hundreds of hours and received tens of thousands of dollars for clients who were already stably housed. One review determined the company was consistently billing up to or beyond the maximum annual limits allowed by the program.

Agents seized computers, mobile phones, and digital records, citing the need to locate billing logs, communication histories, and supporting documents. The investigation is being led by the U.S. Attorney’s Office, Minnesota Department of Human Services, Bureau of Criminal Apprehension, and Minnesota Attorney General’s Office, with assistance from the FBI.

Authorities say no charges have been filed yet. However, Acting U.S. Attorney Joseph H. Thompson said the searches mark “another step in a much bigger reckoning” as Minnesota works to hold accountable those accused of abusing public aid programs.

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