Child care, home health scam bilks state of $4M, prosecutor says

ST. PAUL -- Four people were charged Tuesday in what Ramsey County authorities called a “massive” multimillion-dollar public benefits fraud scheme.

The four were accused of falsifying records to obtain public assistance through a home health care business and three child care centers in the Twin Cities.

The swindle cost the state about $4 million, Ramsey County Attorney John Choi said. It dates back to 2009, according to criminal complaints.

“I am a supporter of a safety net in our community, and it’s very troubling … to know there are people in our community who would take advantage of the good intentions of the public,” Choi said.

Yasmin Abdulle Ali, 33 of Fridley is suspected of masterminding the fraud.

Also charged were her husband, Ahmed Aden Mohamed, 46, of Fridley; Joshua John Miller, 31, of St. Paul; and Jordan Christopher Smith, 31, of Cottage Grove.

Mohamed remained at large Wednesday.

Ali was the primary owner of All Nations Home Health Care and the Deqo Family Center, which operated child care facilities in Minneapolis, St. Paul and Apple Valley.

Mohamed ran daily operations at the St. Paul child care center. Miller was involved with operations at the child care centers and the home health care business.

Smith, who appears to have had the smallest role in the alleged conspiracy, was contracted to help with billing for All Nations.

Under Ali’s direction, the defendants allegedly falsified documents to illegally receive a substantial amount of money from Minnesota’s Child Care Assistance Program and the Minnesota Health Care Program.

The majority of fraudulent funds were obtained via the child care centers, court documents say. Ali and Mohamed allegedly recruited mothers to enroll their children in the day cares and also offered to hire them to work at the facilities, making the women eligible to receive public benefits under the state’s child care assistance program.

To meet the program’s working requirements; fraudulent pay stubs were created to make it look as if the mothers worked more hours than they often did, court documents say.

Training records for the employees were also allegedly falsified.

The fraud orchestrated via the home health care business involved submitting claims for reimbursement from the Minnesota Health Care Program for care provided by people who did not perform the work.

The claims included names of personal care assistants licensed to provide the services. In many cases, the individuals who actually performed the care lacked the necessary background checks and were not properly licensed.

The scam involving the home health care business began in 2009. Criminal activity at the child care centers dates back to at least 2012, court documents say.

The investigation began that year after state authorities began receiving reports of improper handling of child care payments involving a child care center, Choi said.

It was aided by one of Ali’s former employees, who reported the fraud.

The investigation lasted more than two years. It involved investigators from the Ramsey County sheriff’s office, St. Paul police and the state Revenue, Commerce and Human Services departments.

This is the first major case to be prosecuted since Gov. Mark Dayton created the Minnesota Department of Human Services Officer of Inspector General in 2011 to investigate fraud.

Jerry Kerber, the inspector general, said the case has the potential to expose other holes in the state’s public benefit system.

“We really see a responsibility to learn from these cases to make those changes to the system (needed) to prevent this type of thing from being as likely to occur,” Kerber said.

The state Department of Human Services revoked Deqo’s license to provide child care at all of its centers in July of 2013.

Ali and Mohamed also were charged with concealing profits and failing to pay enough in taxes.

Ali was charged with 52 felony counts, including racketeering, theft by swindle, concealing criminal proceeds and failure to pay income taxes.

Mohamed faces 20 counts for similar crimes. Miller was charged with 17 criminal counts, while Smith faces seven.

Ali and Miller were scheduled to appear in court Thursday. Smith was charged by summons and scheduled to make his first court appearance Jan. 7.

While the four suspects had what Choi called the most “significant role” in the scheme, the investigation remains active. The state hopes to recover the money lost through the conspiracy, Choi added.

No phone numbers could be found to reach Miller, Smith or Mohamed. Attempts to call the number listed for Ali were met with a busy signal.

The Pioneer Press is a media partner with Forum News Service.

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