Minnesota authorities and federal investigators say Somalis involved in the state’s Medicaid autism-care programs stole millions of dollars through fraudulent billing schemes and funneled portions of the money overseas, including to terror groups in Somalia, according to reporting from City Journal, Breitbart News, and statements from federal officials.
In July, Breitbart News reported that nearly 100 autism clinics across Minnesota were under investigation for billing Medicaid for treatment of children allegedly diagnosed with autism — much of it tied to fraud within the Somali community in Minneapolis. New findings suggest the criminal activity is significantly larger than initially understood, unfolding under the administration of Gov. Tim Walz.
Medicaid Costs Balloon as Fraud Expands
Minnesota’s Housing Stabilization Services program illustrates the scale of the issue. Launched in 2021 with estimated first-year costs of $2.6 million, it instead paid out $21 million. Annual expenditures then grew to $42 million, $74 million, and $104 million. By mid-2025, the program had reached $61 million in spending, City Journal reported.
Fraud allegations extend to other state welfare operations as well. Prosecutors charged Asha Farhan Hassan with defrauding the Early Intensive Developmental and Behavioral Intervention program of $14 million by using fake autism diagnoses among Somali families. Investigators allege that Hassan and associates promised kickbacks of $300 to $1,500 per month per child in exchange for enrollment in the state-funded autism programs.
Autism-related Medicaid claims in Minnesota surged from $3 million in 2018 to $399 million by 2023. The number of autism-care providers also exploded — from 41 statewide in 2020 to 328 by 2025, many of which received Medicaid funding. According to City Journal, one in 16 Somali four-year-olds in the state had an official autism diagnosis, more than triple the statewide average.
Part of a Larger Web of Welfare Scams
The autism-care scheme comes on the heels of the Feeding Our Future scandal, in which 70 Somali Minnesotans were indicted for stealing $250 million in fraudulent food-aid funds.
U.S. Attorney Joe Thompson said these cases form a larger pattern of theft across multiple state programs. “From Feeding Our Future to Housing Stabilization Services and now Autism Services, these massive fraud schemes form a web that has stolen billions of dollars in taxpayer money,” Thompson said. He added that many of the implicated organizations were “purely fictitious companies solely created to defraud the system.”
Thompson described the breadth of fraud as unprecedented in his career, saying, “The depth of the fraud in Minnesota takes my breath away.”
Money Transfers Tracked to Al-Shabaab
According to reporting in City Journal, millions in stolen welfare and Medicaid funds were moved through hawalas — informal, clan-based cash-transfer networks used widely in Muslim communities — and ultimately reached Al-Shabaab, an al-Qaida-linked terror group operating in Somalia.
Because hawalas operate outside the traditional banking system, tracing funds is difficult. Former Seattle Police Department detective Glenn Kerns told City Journal he had tracked $20 million moving to Africa through Seattle hawalas in a single year, and said investigators saw similar patterns in Minnesota. He said sources indicated that much of the money being moved originated as DHS benefits.
Another official told City Journal that money sent back to Somalia through these systems indirectly or directly benefits Al-Shabaab, stating that “the largest funder of Al-Shabaab is the Minnesota taxpayer.”
A Longstanding Security Concern
Minnesota has long been on the radar of federal counterterrorism authorities. A decade ago, the state led the nation in the number of residents traveling abroad to join ISIS and other extremist groups. The new allegations — tying welfare fraud to overseas terror financing — suggest the problem has continued, according to investigators cited by City Journal.
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