FBI searching autism centers in Minneapolis, St. Cloud after finding 'substantial evidence' of health care fraud

The FBI raided two Minnesota autism centers Thursday as part of an investigation it said revealed "substantial evidence" of millions of dollars in fraudulent Medicaid claims from companies participating in a state program serving young people.

The searches are in connection with an investigation into the Early Intensive Developmental and Behavioral Intervention (EIDBI) health care program that is funded by the state and federal governments and serves people under 21 with autism spectrum disorder — an alleged fraud investigators say overlapped with the massive Feeding Our Future food aid fraud conspiracy.

According to a 54-page search warrant application, the FBI searched the Smart Therapy Center in Minneapolis and the Star Autism Center in St. Cloud. A Star Tribune reporter observed FBI agents in the hallway of Smart Therapy Center's office. Smart Therapy Center received about $13.8 million in Medicaid reimbursements between 2020 and 2024 to provide EIDBI-related services, the warrant says. Star Autism has received more than $6 million since it was formed in 2020.

According to the search warrant, the EIDBI fraud scheme was discovered in part through the U.S. Attorney's Office prosecution and FBI investigation into Feeding Our Future. The U.S. Attorney's Office tapped agents to review claims data for Medicaid submitted in Minnesota for EIDBI services and found Medicaid payments for such claims had soared since the program started in 2017 — in a pace similar to the federal child nutrition payout trends.

In an affidavit to apply for Thursday's search warrants, FBI Special Agent Kurt Beulke wrote that Minnesota companies billed the state for roughly $400 million in such services in both 2023 and 2024 for Minnesota Medical Assistance and related public health plans. That was up from $1.7 million in 2017. Beulke wrote that the FBI's investigation "has found substantial evidence that many of these companies have been submitting fraudulent claims for EIDBI services that were not actually provided or that were not covered by the EIDBI program."

U.S. Attorney Andrew Luger declined to comment. No charges have been filed as part of the federal probe. Thursday's search warrant operations were carried out in an attempt to gather evidence that may support an eventual indictment, but such a decision may not be made for months. In the Feeding Our Future case, FBI agents raided numerous businesses tied to the scheme in January 2022 and criminal charges followed in September of that year.

Abdinajib Hassan Yussuf was listed as Star Autism Center's organizer in the LLC's original state business filing in 2020.

"Everything is new to us, so we will figure out what's going on," he said in a call Thursday. Asked about the fraudulent billing allegations, he said, "No. There was nothing like that, but I have nothing to say at the moment."

He declined further comment. Asha Hassan, who is listed as Smart Therapy Center's manager in state business filings, could not be reached for comment.

Feeding our Future connections

The Feeding Our Future investigation unearthed connections to autism centers. At least a dozen of the 70 defendants in the Feeding Our Future case "owned, received money from, or were associated with autism centers that received state money for EIDBI services, according to Beulke's affidavit. And at least four autism centers were reimbursed over $1 million by the state through the federal child nutrition program at the crux of the Feeding Our Future case, while several others tried to get into the program. The affidavit said that Smart Therapy and its owners were involved in both the Feeding Our Future scheme and a scheme to fraudulently obtain Medicaid payments based on false claims for EIDBI services not actually provided. Smart Therapy LLC was registered with the Minnesota Secretary of State's Office in November 2019.

Smart Therapy participated in the federal child nutrition program under the sponsorship of Feeding Our Future in 2020. Aimee Bock, Feeding Our Future's executive director, told the Minnesota Department of Education that Smart Therapy and other autism clinics "operate like child care programs in that the parent drops the child off and leaves them there for several hours." The MDE approved Smart Therapy's participation in the federal food aid program based on Bock's description. Bock is awaiting trial next year on federal criminal charges related to the Feeding Our Future case.

Smart Therapy claimed to be working with a vendor called S&S Catering, whose owner, Qamar Hassan, has since pleaded guilty to federal fraud charges. Hassan admitted in her plea agreement that the sites that contracted with S&S Catering made "grossly inflated" claims of serving thousands of children daily.

Employee: No training, no treatment

According to the search warrant, a behavioral technician formerly employed by Smart Therapy told agents that the clinic's two owners were related to Hassan. The employee described receiving no training after starting at Smart Therapy and was just told to go with one of the clients and do "goals." According to the ex-employee, most of those who worked at Smart Therapy were 18- or 19-year-old relatives of the owners who had no formal education beyond high school and no training or certification related to autism treatment.

The former employee said the owners liked to hire their relatives so they could pay them less than qualified medical professionals and "because they would not question what was going on at the company." Smart Therapy's owner also "actively recruited" new clients by talking to parents they knew and knocking on doors to try to talk parents into getting their children into autism treatment, the employee said.

According to the employee, a typical day at Smart Therapy began with patients being dropped off about 9 a.m. and picked up about 5 p.m. by hired drivers who billed the state for transportation services. Each client was assigned to a behavioral technician, some of whom tried to work on "goals" with them. But the younger technicians related to Smart Therapy's owners "were usually just on their phones all day."

Clients' individual treatment plans were not completed on schedule because technicians were not qualified and did not provide necessary treatment, the employee told agents. The employee added that the technicians regularly arrived late to work, often at 11 a.m. or later. Supervisors covered for the tardy technicians while the clinic billed Medicaid for the full eight hours of treatment and observation "even when the behavioral technician was not present for a significant portion of the day," according to the search warrant.

Many of those receiving EIDBI services at Smart Therapy did not appear to be autistic, the employee told agents, but had other developmental delays.

According to Beulke, Smart Therapy billed Medicaid for EIDBI services rendered by medical providers who did not work at Smart Therapy and were not on the clinic's payroll, and also submitted claims for services from medical providers who were outside of the country at the time.

Federal investigators say Star Autism Center and its owners were "similarly involved in a scheme to fraudulently obtain Medicaid payments" based on fraudulent claims for EIDBI services that were not actually provided.

In one case, Star Autism received nearly $10,000 in Medicaid payments for 56 claims totaling 171 hours of in-home EIDBI services provided by one employee. But investigators found flight records showing that the person had traveled from Minneapolis to Kenya during that same period in 2023. Another provider made the same trip during that time, yet Star Autism submitted 66 claims for 283 hours of in-home EIDBI services and received more than $16,000 in Medicaid payments

Like Smart Therapy, Beulke wrote, Star Autism Center submitted improbably large Medicaid claims for EIDBI services. Star Autism also billed Medicaid for claims for services that took place when clients were at school or, in one case, at home recovering from surgery.

Investigations ongoing

The Minnesota Department of Human Services began investigating Star Autism in 2022 following a complaint from a provider screener who conducted onsite visits at Star Autism, according to the search warrant. The screener noted missing intake documents, missing personnel files and provider signatures "pre-printed" on records.

DHS investigators reviewed a one-year subset of the clinic's Medicaid claims and found a dozen cases of Medicaid claims billed where there were more hours of service claimed than were documented on the client's health service record. It also discovered 191 claims billed with no documentation to support services, nearly 1,400 claims billed without a treatment provider signature and more than 1,400 claims billed where the treatment provider did not meet qualifications.

The investigation further found "numerous" instances of claims billed where a treatment provider documented overlapping start/stop times for services rendered with Star Autism and shifts worked with other employees. In response, DHS referred the case to the Minnesota Attorney General's Office for investigation by its Medicaid Fraud Control Unit. The DHS on Thursday confirmed that it has had open investigations into Smart Therapy Center and Star Autism "for a significant amount of time."

"We work closely with our state and federal law enforcement partners in oversight of these and other Medicaid programs. DHS continues to gather and evaluate new information," Human Services Commissioner Jodi Harpstead said in a statement, adding that the department is now auditing the program and visiting "every single site" that participates.

As of Thursday, DHS was investigating 32 individuals or agencies providing early intervention services. The agency said this summer that it had withheld payments to seven providers since 2018 due to credible fraud allegations and forwarded five cases to the Attorney General's Medicaid Fraud Control Unit. Another 13 investigations were closed over the past five years, including an investigation into Sharmarke Issa that was closed in June 2023 and resulted in the provider being "terminated" from receiving Medicaid payments, the Star Tribune reported in September. Issa, the former board chair of the Minneapolis Public Housing Authority, pleaded guilty to a federal wire fraud charge in September in the Feeding Our Future case.

Nearly 300 agencies doing early intervention work are enrolled in Minnesota Health Care Programs. Minnesota doesn't license autism centers, so there's very little regulatory oversight and the state Department of Human Services can't track caseload size or staffing ratios.

Last year, the Legislature directed DHS to study whether to begin licensing autism centers. The Minnesota autism program has quickly grown since it was launched in mid-2015, particularly since Minnesotans started using the benefit in earnest in 2018. The number of providers — who diagnose and treat people with autism spectrum disorder — has increased from 41 in 2018 to 328 last year.