Nick Shirley Brings Minnesota Medicaid Fraud Into the Senate

Independent journalist Nick Shirley told a Senate panel on July 15 that Minnesota Medicaid fraud sat in empty clinics in plain sight. Federal prosecutors had already charged 15 people in schemes of more than $90 million. Chairman Rand Paul used the session to ask why the government kept paying.

The hearing did not open a new case file. It put a camera-led investigation into a room that already had indictments, a shuttered housing benefit, and a fight over frozen federal cash.

Empty Chairs at the Fraud Hearing

Paul convened the July 15 Senate fraud hearing at 10:00 a.m. in Dirksen room SD-342 under the title Exposing Fraud in America. Shirley sat on the first panel with James O’Keefe of O’Keefe Media Group and Dylan Hedtler-Gaudette of the Project on Government Oversight.

Ranking Member Gary Peters of Michigan appeared for the opening, then left. Sen. Bernie Moreno of Ohio asked whether a Democrat would go next. Paul said there did not appear to be a great deal of interest across the aisle. The rest of the minority slate, including John Fetterman, Maggie Hassan, Richard Blumenthal, Ruben Gallego, Andy Kim, and Elissa Slotkin, did not take seats.

Paul told the room his office debt clock stood at nearly $40 trillion that morning. Private insurers, he said, verify first because it is their money. Washington pays first.

Our first witness, Nick Shirley, decided to see for himself. In Minneapolis, he visited supposed daycare centers that had collected millions of dollars from taxpayers. He found industrial buildings with blacked-out windows, no playgrounds, no children, no employees, no one answering the door. A private insurer would have stopped payment. The federal government kept writing the checks.

Rand Paul, chairman, Senate Homeland Security and Governmental Affairs Committee, July 15 opening statement

Hedtler-Gaudette used the same morning to put Minnesota inside a wider ledger. The Government Accountability Office’s $186 billion improper-payment estimate for fiscal year 2025 covers 64 programs across 15 agencies, about $24 billion above the prior year, with $153 billion of that total classed as overpayments. Medicaid alone accounts for $37.4 billion in that estimate. Improper payments mix error and fraud, and they are not a Minnesota scorecard. They are the reason a YouTuber was invited to a Homeland Security table.

What Nick Shirley Told the Senate

Shirley described himself in Shirley’s written opening statement as a 100 percent independent journalist. “When we talk about fraud, we are talking about money stolen from hardworking, law-abiding, taxpaying citizens,” he wrote. “This issue has nothing to do with political parties, because no dollar says Republican or Democrat on it.”

Last December he posted a 43-minute video from Minneapolis. He walked up to clinics that had drawn large Child Care Assistance Program payments and filmed industrial fronts, dark windows, and doors that nobody opened. At Quality Learning Center, the sign spelled the second word wrong. Shirley asked, on camera, how a building licensed for 99 children could look empty. A manager later said the center ran from 2:00 p.m. to 10:00 p.m. and that Shirley had come too early. Ibrahim Ali denied any fraud and said children arrived daily.

State records still closed that license on January 6, 2026. The center had taken about $1.9 million in CCAP money in 2025 and about $10 million since 2019, and inspectors had logged 121 violations in four years. No public charging document has named Quality Learning Center as a defendant. The clip became the image of the scandal anyway.

The guilty plea that did follow the video attached to a different door. Fahima Mahamud, chief executive of Future Leaders Early Learning Center, appeared in Shirley’s roundup and shut that center on January 24, 2026. In July she pleaded guilty to wire fraud and conspiracy. Prosecutors said she filed more than $4.6 million in CCAP claims for families who never paid the required copay, and that the same site had taken more than $850,000 through Feeding Our Future in 2021.

At posting, eight of the nine centers in the video still held active licenses. A parking lot with no minivans is not an indictment. A copay scheme that ends in a plea is. Shirley told senators that Governor Tim Walz had branded his work as white supremacy and called him a far-right delusional conspiracy theorist, and that Walz then abandoned his reelection bid in January. He also said more than 30 fraud bills had been filed after the video. Those counts are his, not a clerk’s tally.

Sen. Ron Johnson cited a separate claim that $700 million in cash left Minneapolis-St. Paul for countries in Africa. That figure has not been produced as a court finding in the Medicaid cases charged in May. It is a hearing allegation, and it travels farther than the invoices.

Federal Charges Already Covered $90 Million

On May 21, the Justice Department announced charges against 15 defendants in Minnesota health-care and child-care schemes with more than $90 million in intended loss. Acting Attorney General Todd Blanche said the defendants stole money “while providing substandard care for children and abandoning at least one Medicaid recipient as they passed away.” The department also funded 15 new trial-attorney posts for Medicaid fraud nationwide and expanded its Midwest strike force into the District of Minnesota.

THE MAY 21 PROGRAM CHARGES

HHS Secretary Robert F. Kennedy Jr. called the autism case the largest fraud bust of its kind the department had charged. CMS Administrator Mehmet Oz said the defendants turned Medicaid into “luxury cars and real estate empires.” U.S. Attorney Daniel Rosen said the May cases were “the beginning of our work in Minnesota,” not the end.

Autism Bills Grew From $600,000 to $400 Million

Minnesota became one of the first states, in 2017, to cover Early Intensive Developmental and Behavioral Intervention through Medicaid. Claims then ran from just over $600,000 in 2018 to over $400 million by 2025. That curve is the Justice Department’s, not a campaign graphic.

Prosecutors charged Shamso Ahmed Hassan, 55, and Hanaan Mursal Yusuf, 25, both of Brooklyn Park, with a $46.6 million scheme at Smart Therapy Center and Star Autism Center. About $21.2 million was paid. The indictment describes kickbacks of $300 to $1,500 a month to parents who enrolled children, autism diagnoses issued without medical need, and bills for therapy that did not happen. Children who actually needed the hours lost their place in line.

Asha Farhan Hassan, tied to Smart Therapy, had already pleaded guilty in December 2025 to a related autism case. Prosecutors said she took more than $14 million in Medicaid payments and more than $450,000 in child-nutrition funds, and sent hundreds of thousands of dollars to Kenya for real estate. Several Feeding Our Future defendants, federal lawyers have said, were also drawing autism-clinic money. That is how the meal-site case walked investigators into Medicaid.

On the home-supports side, Charles Wayne Healey and Katherin Suzan Larsen-Guthmiller took $22.7 million through Healey Homes while, prosecutors say, hiding that they owned the houses billed as independent living. Medicaid bars that landlord interest. They used the proceeds, the indictment says, to buy more property, cars, and jewelry. Integrated Community Supports paid out more than $460 million from 2021 through 2025. In the $1.4 million case charged in May, a defendant billed for 24-hour help the day before a recipient was found dead.

St. Paul Lists Its Probes While Washington Holds the Cash

Minnesota’s Department of Human Services answers with a different stack of figures. Its Minnesota program-integrity fact check says the agency has run 3,594 investigations since 2020, identified more than $56 million for recovery, and sent 1,150 cases to law enforcement. On EIDBI alone it lists 444 onsite visits, 73 new probes, 25 law-enforcement referrals, and 35 administrative sanctions.

MINNESOTA’S OWN TALLY

• $259 million deferred: CMS held that sum after Vice President JD Vance and Oz announced a pause, on top of a January threat to withhold $2 billion a year until a corrective plan was in place.
• Around $350 million frozen: That is the running figure St. Paul now uses for Medicaid payments stuck in the federal dispute.
• 3,411 disenrolled: After a five-month review of almost 5,600 high-risk providers, the state sent that many disenrollment notices, most for unfinished paperwork or failed site visits, not courtroom verdicts.
• 636 payment stops: Since January 1, 2025, DHS says it has cut off that many providers on credible fraud allegations.

Walz signed an executive order in January 2025 creating a Bureau of Criminal Apprehension fraud unit, hired an inspector general with a Medicaid-prosecution background, and in September issued Executive Order 25-10 for prepayment review, inactive-provider purges, and a public dashboard. About 800 non-billing providers were dropped on October 15, 2025. The state paused new licenses for community-based and adult-day providers for two years and put 14 high-risk services on extra review. CMS asked for a corrective plan on December 5, 2025, rejected the first version on January 6, and approved a revised plan on March 19, 2026.

Walz called the freezes part of a retribution campaign and said the White House was exploiting fraud rather than helping stop it. Temporary Commissioner Shireen Gandhi, later removed from the top DHS job in May, had already said the agency did not move fast enough on housing-stabilization fraud. The department now stresses that Medicaid in the state covers 1.3 million people in a state of 5.8 million, and that a freeze of this size hits counties, clinics, and home-care networks, not only the billed shells.

THE FIGHT OVER THE $9 BILLION FIGURE

• Joe Thompson’s estimate: Then a senior federal prosecutor in Minnesota, he said in December 2025 that half or more of roughly $18 billion run through 14 high-risk programs since 2018 might have been stolen.
• The political rebuttal: Walz called the $9 billion reading sensationalized. Attorney General Keith Ellison called it a false number.
• The charged floor: Feeding Our Future plus the May Medicaid cases still sit in the hundreds of millions, which is already enough to close a housing program and freeze payments, and is not the same thing as half the state’s high-risk Medicaid book.

A House Oversight staff report later said senior Minnesota officials had warnings as early as 2019 and put a $9 billion cloud over Medicaid payments. Walz’s office called that committee a joke. The dollar argument is now a campaign instrument. The invoices in the May indictments are not.

Aimee Bock’s Prison Term Came First

The meal-site case did not wait for a YouTube channel. Feeding Our Future, a nonprofit sponsor in the federal Child Nutrition Program, became a $250 million fraud file, with 79 defendants and a federal judge later sentencing former leader Aimee Bock to more than 41 years and $243 million in restitution. Convictions in that docket bought luxury cars, waterfront property, and trips. Joe Thompson, speaking after Bock’s sentencing, said the case had changed the state forever.

Minnesota’s legislative auditor had already been through Child Care Assistance Program fraud in the 2010s, when prosecutors proved $5 million to $6 million and believed the true figure was higher. Housing Stabilization Services, launched in July 2020 as the first Medicaid benefit of its kind in the country, was supposed to cost about $2.6 million a year. It paid more than $26 million in 2021 and over $104 million in 2024, about 40 times the forecast, before the state shut it on October 31, 2025. Some of the May defendants, prosecutors said, were Pennsylvania residents who traveled in to bill Minnesota.

HOW THE BILL CAME DUE

1. 2019: State auditors and, later, House investigators flag child-care fraud warnings that officials did not treat as a system failure.
2. 2022: Federal charges open in Feeding Our Future, the meal program that would grow into a $250 million case.
3. October 31, 2025: Minnesota ends Housing Stabilization Services, citing fraud, before Shirley’s video is posted.
4. December 2025: Shirley releases the 43-minute Minneapolis daycare video; Quality Learning Center’s license is closed on January 6, 2026.
5. January 2026: Walz drops his reelection bid; CMS starts the noncompliance and withhold path that St. Paul now prices at around $350 million frozen.
6. May 21, 2026: The Justice Department charges 15 people in the Medicaid and child-care takedown.
7. July 2026: Mahamud pleads guilty; Shirley testifies on July 15.

The sequence cuts against the idea that a visitor with a camera found a secret. HSS was already dead. Bock was already heading toward a multi-decade sentence. What the video did was make an empty doorway national, pull federal payment levers, and put Shirley in Paul’s witness chair. Late August clips of him arguing with a man outside a missing transportation company show the next phase of that method, and the same reply: the missing office is the point, not the reporter’s religion.

The Housing Program Is Already Gone

Assistant Attorney General Colin McDonald said one Minnesota program was shut because the money was gone. Housing Stabilization Services no longer exists for the people it was written to house. That is the cost that does not show up as a recovery statistic.

WHO LOST WHEN THE CHECKS STOPPED

• Children on the autism ledger: Kickback clinics billed hours that were never delivered, which is theft from families who needed the therapy and from the taxpayers who funded it.
• People who needed housing help: HSS went from a $2.6 million idea to a $104 million 2024 outlay and then to a closed door on October 31, 2025.
• A billed ICS recipient: Prosecutors say a provider claimed 24-hour support the day before that person was found dead.
• Clinics still waiting on federal cash: A freeze Minnesota now puts at around $350 million, plus 3,411 disenrollment notices, lands on real payrolls as well as on shells.

Aggressive payment stops can strand lawful providers and delay care, which is the warning state officials now repeat in every fact sheet. Slow payment stops left an optional housing benefit to be billed into collapse. Both failures are in the record at once.

Shirley asked the Senate to treat empty buildings as a reason to halt checks, not as a culture fight. Site visits in Minneapolis keep drawing a racism charge from people at the door. That charge does not fill a classroom licensed for 99 children, and it does not restore HSS. The May defendants are still in federal court. CMS still holds the deferred funds. The housing program is still closed.