Four defendants admitted fraudulent Medicaid billing and creating fake records using artificial intelligence.
Four Minnesota men have admitted to taking more than $2.2 million from a state Medicaid housing program by billing for services that investigators said were never actually provided. Federal prosecutors also said the group turned to artificial intelligence to create fake records after insurance companies requested documentation to support the claims. The guilty pleas were announced by the U.S. Department of Justice (DOJ) and involve Minnesota’s former Housing Stabilization Services program, which was created to help people with disabilities find and keep stable housing. The program served people facing serious challenges, including older adults, people with mental health conditions, and those recovering from substance use disorders.
According to court records, Moktar Hassan Aden, Mustafa Dayib Ali, Khalid Ahmed Dayib, and Abdifitah Mohamud Mohamed operated a company called Brilliant Minds Services LLC from the Griggs-Midway Building in St. Paul. The business became an approved Medicaid provider and enrolled hundreds of people in the housing assistance program. Prosecutors said the company signed up about 350 Medicaid recipients but failed to provide the services it claimed to deliver. Even so, thousands of reimbursement requests were submitted through the program. Investigators said many of those claims were either entirely false or greatly exaggerated.
The alleged scheme lasted for about three years, from April 2022 through April 2025. During that time, prosecutors said the company collected about $2.2 million for housing support services that were never completed or were overstated. The money was intended to help vulnerable residents secure housing and receive ongoing support, but authorities said it was instead used for personal financial gain. Investigators also said the fraud became more apparent when insurance companies requested records to verify the claims. Rather than producing legitimate documentation, prosecutors said the defendants generated false records with the help of ChatGPT in an attempt to make it appear that the services had actually been performed.
The case reflects a growing concern among investigators that artificial intelligence tools can be misused to create convincing but false business and other official records. Officials said technology itself was not responsible for the fraud, but it was allegedly used to support an existing criminal operation by producing paperwork that appeared authentic.
Each of the four men pleaded guilty to one count of wire fraud during separate court hearings held between July 7 and July 23 and face sentences up to 20 years behind bars. Wire fraud is a federal offense that involves using electronic communications as part of a scheme to obtain money through false or misleading information. Sentencing dates have not yet been announced.
The investigation was carried out by the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS) Criminal Investigation division, and the Office of Inspector General for the U.S. Department of Health and Human Services. Prosecutors from the Department of Justice’s Fraud Section and the U.S. Attorney’s Office for the District of Minnesota are handling the case. The DOJ indicated its Health Care Fraud Strike Force has charged thousands of defendants nationwide over the past two decades in cases involving tens of billions of dollars in fraudulent billing.
Sources:
Four Men Plead Guilty to $2M Minnesota Medicaid Fraud
Four men with Somali names plead guilty to bilking Medicaid under company called ‘Brilliant Minds’
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