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.

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.…