Philadelphia 'fraud tourists' plead guilty in $3.5M Minnesota Housing Stabilization scheme
Two Philadelphia men, Anthony Jefferson (37) and Lester Brown (53), pleaded guilty in U.S. District Court to one count of wire fraud each for their roles in a $3.5 million scheme that exploited Minnesota’s Medicaid Housing Stabilization Services program; they rented Minneapolis office space for Chozen Runner LLC and Retsel Real Estate LLC, billed themselves as “The Housing Guys,” enrolled about 230 beneficiaries by targeting shelters and Section 8 housing, and admitted using ChatGPT to fabricate service notes and reports — Jefferson’s plea contemplates 5–6.5 years and Brown’s 3.5–4.5 years, with both free pending sentencing. Their pleas come amid a broader federal probe that has charged eight people in related HSS frauds allegedly involving millions, prompted FBI raids, and led the state to end the HSS program after sharply rising Medicaid spending and apparent widespread abuse.
📌 Key Facts
- Two Philadelphia men, Anthony Jefferson and Lester Brown, pleaded guilty in U.S. District Court to one count of wire fraud each for roles in a $3.5 million scheme that exploited Minnesota’s Medicaid Housing Stabilization Services (HSS) program; their plea agreements contemplate prison terms (Jefferson 5–6.5 years; Brown 3.5–4.5 years) and both are allowed to remain free pending sentencing.
- Jefferson and Brown operated Chozen Runner LLC and Retsel Real Estate LLC, rented downtown Minneapolis office space, branded themselves as “The Housing Guys,” enrolled about 230 beneficiaries by targeting shelters and Section 8 housing, and admitted using ChatGPT to fabricate service notes and reports for insurers and Medicaid auditors.
- The federal probe is broader: the U.S. Attorney’s Office charged eight people with wire fraud tied to Minnesota’s HSS program, and prosecutors allege more than $8 million was stolen in that set of charges; a search warrant alleges 14 providers collected about $22 million in 16 months.
- Investigators allege defendants diverted stolen Medicaid funds to personal spending and investments, including luxury vehicle leases (BMW, Mercedes), a Roseville apartment, and real estate in Kenya; prosecutors say some suspects pocketed up to $400,000 each and used a joint American Express Platinum card to rack up nearly $500,000 in purchases.
- Because of widespread fraud allegations, Minnesota’s Department of Human Services has ended the HSS program; reported HSS Medicaid spending rose from $27.7 million in 2021 to $105.3 million in 2024, and the program cost roughly $302 million over five years, far above initial estimates.
- Law enforcement actions have included FBI raids across the Twin Cities on July 16 and administrative actions against providers — for example, 24hrs Home Care (registered to defendant Anwar Adow) received an HCBS license Oct. 1, 2021, was temporarily suspended Oct. 10, 2025, and its DHS license revocation became effective Jan. 7, 2026.
- DOJ alleges that through Liberty Plus LLC, defendant Anwar Adow instructed employees to bill inflated hours, pulled in more than $1.2 million in Medicaid funds for roughly 200 clients, and diverted much of the money to employees, his brother, a Mercedes‑Benz lease and investments.
- The named defendants in the broader case include Moktar Hassan Aden; Mustafa Dayib Ali; Khalid Ahmed Dayib; Abdifitah Mohamud Mohamed; Christopher Adesoji Falade; Emmanuel Oluwademilade Falade; Asad Ahmed Adow; and Anwar Ahmed Adow; companies tied to the scheme include Brilliant Minds Services LLC, Leo Human Services LLC, Faladcare Inc., and Liberty Plus LLC.
- Acting U.S. Attorney Joseph Thompson says the investigation is ongoing and more charges are expected; recent guilty pleas indicate the federal prosecution is advancing toward resolutions in the HSS fraud scheme.
📊 Relevant Data
In Minnesota's fraud investigations involving daycare centers and food programs from 2020 to 2026, 85 out of 98 charged defendants are of Somali descent, while Somalis make up approximately 1.4% of the state's population.
Rep. Brandon Gill questions Somali fraud statistics in Minnesota at hearing — Fox News
Causal factors for overrepresentation of Somali immigrants in Minnesota welfare fraud include socioeconomic challenges such as high poverty rates, language barriers, and concentrated resettlement in communities with limited resources.
A Somali-American former investigator: why you're hearing about fraud in my community — Minnesota Reformer
Nationally, Medicaid fraud recoveries totaled $2.7 billion in fiscal year 2024, with states like Minnesota experiencing higher incidences due to program expansions during the COVID-19 pandemic.
The Minnesota welfare fraud story is really about a broken Medicaid bureaucracy — Reason
📰 Source Timeline (7)
Follow how coverage of this story developed over time
- Two Philadelphia men, Anthony Jefferson (37) and Lester Brown (53), have pleaded guilty in U.S. District Court to a single count of wire fraud each in a $3.5 million scheme that exploited Minnesota’s Housing Stabilization Services (HSS) program.
- Jefferson and Brown rented downtown Minneapolis office space for Chozen Runner LLC and Retsel Real Estate LLC, branded themselves as “The Housing Guys,” and enrolled about 230 beneficiaries by targeting shelters and Section 8 housing.
- Both admitted using ChatGPT to fabricate service notes and reports for insurers and Medicaid auditors; Jefferson’s plea deal contemplates a 5–6.5 year sentence and Brown’s a 3.5–4.5 year sentence, with both allowed to remain free pending sentencing.
- FOX 9 reports HSS Medicaid spending jumped from $27.7M in 2021 to $105.3M in 2024, and reiterates DHS has now ended the program outright because of widespread fraud.
- 24hrs Home Care in Blaine, registered to Housing Stabilization defendant Anwar Adow, received an HCBS license Oct. 1, 2021 and was hit with a temporary immediate suspension by DHS on Oct. 10, 2025 due to his criminal charges.
- DHS states that the HCBS license revocation for 24hrs Home Care becomes effective Jan. 7, 2026, aligning it with the Smart Therapy case.
- The article cites DOJ allegations that Adow, through Liberty Plus LLC in Roseville, told employees to 'bill as much as they could,' incentivized inflated hours, pulled in more than $1.2 million in Medicaid funds for roughly 200 clients, and diverted much of the money to employees, his brother, a Mercedes‑Benz lease and investments.
- One of the eight defendants has pleaded guilty, marking the first guilty plea in the case.
- The plea confirms the federal prosecution is advancing toward resolutions in the HSS fraud scheme.
- Prosecutors allege suspects used stolen funds to invest in real estate in Kenya and lease luxury vehicles (BMW, Mercedes) and a Roseville apartment.
- Four suspects allegedly pocketed up to $400,000 each and used a joint American Express Platinum card to rack up nearly $500,000 in purchases.
- Eight defendants named and ages provided: Moktar Hassan Aden (30), Mustafa Dayib Ali (29), Khalid Ahmed Dayib (26), Abdifitah Mohamud Mohamed (27), Christopher Adesoji Falade (62), Emmanuel Oluwademilade Falade (32), Asad Ahmed Adow (26), and Anwar Ahmed Adow (25); the Adows are brothers.
- Companies tied to the scheme: Brilliant Minds Services LLC (St. Paul), Leo Human Services LLC (Brooklyn Park), Faladcare Inc. (St. Paul), and Liberty Plus LLC (Roseville).
- Amount attributed to this set of charges: more than $8 million allegedly stolen.
- Acting U.S. Attorney Joseph Thompson said the investigation is ongoing and more charges are expected.
- Background details: FBI raids across the metro on July 16; a search warrant states 14 providers collected $22M in 16 months; the state shut down the Housing Stabilization Services program in August; overall program cost $302M over five years, far above initial estimates.
- Specifies the charge as wire fraud brought by the U.S. Attorney's Office for the District of Minnesota.
- Reaffirms the target of the alleged scheme: Minnesota’s Housing Stabilization Services (Medicaid) program.