The Minnesota fraud continues and its reach spreads. Two Pennsylvania men admitted to traveling multiple times from Philadelphia to Minneapolis as part of an alleged scheme to defraud Minnesota’s Housing Stabilization Services (HSS) program of roughly $3.5 million, according to federal prosecutors. A
uthorities say the defendants relied on artificial intelligence to generate fraudulent documentation to support false claims. The men — identified as Anthony Waddell Jefferson, 37, and Lester Brown, 53 — allegedly established businesses in Minnesota and registered as providers under the HSS program, which is designed to offer housing consultation, transition assistance, and ongoing support to eligible individuals.
Minnesota’s HSS program, launched in July 2020, is intended to help people with disabilities — including seniors and individuals dealing with mental illness or substance abuse — secure and retain stable housing. The Justice Department previously noted that the program “had low barriers to entry and minimal records requirements for reimbursement.”
Attorney General Pam Bondi responded to the case, saying, “Criminal fraud not only robs taxpayers — it shatters trust in our institutions. Under President Trump’s leadership, today’s convictions are just the beginning. Our prosecutors will work tirelessly to unravel criminal fraud schemes and charge their perpetrators in Minnesota and across the country.”
Prosecutors allege Jefferson and Brown billed HSS for services that were never delivered to approximately 230 Medicaid beneficiaries, fraudulently collecting about $3.5 million. Both men pleaded guilty to one count of wire fraud and face a maximum sentence of 20 years in prison, according to the DOJ.
“Minnesota will no longer be a haven for fraud under our watch,” Deputy Attorney General Todd Blanche said. “The Justice Department has been investigating billions in taxpayer fraud across the country and has already successfully convicted 66 individuals and counting in Minnesota. The collaboration between the Criminal Division and the U.S. Attorney’s Office is a prime example of how we restore justice and public trust, while holding criminal fraudsters accountable.”
Fox Business reports that according to the Justice Department, Jefferson and Brown recruited Medicaid beneficiaries by visiting homeless shelters and Section 8 housing facilities, where they promoted themselves as “The Housing Guys.” The individuals they signed up allegedly never received the HSS services claimed on billing records.
The DOJ further alleges Jefferson hired relatives and associates and directed them to produce fabricated client notes that falsely indicated services had been rendered. Some records allegedly showed Jefferson had “invented fake employees” and used their names to sign off on documentation.
Brown, meanwhile, is accused of failing to maintain required service notes altogether. Prosecutors said Jefferson and Brown “fabricated emails” related to supposed clients and used ChatGPT to generate false client records.
“These defendants had no connection to Minnesota or its communities. They traveled across the country for one purpose: to prey upon and steal millions in taxpayer dollars meant for people struggling with homelessness, addiction and disabilities,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division. “Although programs like HSS are run by the states, they are funded with federal tax dollars. The Criminal Division will not stand by while fraudsters put all Americans’ tax dollars at risk.”