Philadelphia men repeatedly traveled to Minneapolis to carry out $3.5M housing fraud scheme: DOJ
Two men from Pennsylvania admitted to repeatedly traveling from Philadelphia to Minneapolis in an effort to defraud Minnesota’s Housing Stabilization Services (HSS) program, prosecutors announced. The men allegedly defrauded approximately $3.5 million from the program and used artificial intelligence to create false records.
The two men, identified as Anthony Waddell Jefferson, 37, and Lester Brown, 53, allegedly set up businesses in Minnesota and enrolled as HSS providers. The men were allegedly supposed to provide housing consulting, transitioning and sustaining services to qualifying individuals.
The state's HSS program, which was officially launched in July 2020, aims to help people with disabilities, including seniors and those with mental illnesses or substance abuse issues, find and maintain housing. The Justice Department previously said the program "had low barriers to entry and minimal records requirements for reimbursement."
Attorney General Pam Bondi reacted, "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."
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Jefferson and Brown are accused of stealing approximately $3.5 million from HSS for services they falsely claimed to have provided to around 230 Medicaid beneficiaries. The men each pleaded guilty to one count of wire fraud and face up to 20 years in prison, the DOJ said.
"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."
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Jefferson and Brown allegedly visited shelters and Section 8 housing facilities, marketing themselves as "The Housing Guys," in order to recruit Medicaid beneficiaries to sign up for HSS services that ultimately were not provided, according to the DOJ.
The DOJ also accused Jefferson of hiring family members and associates to work as employees, who, at his direction, created fake client notes that allegedly showed services provided. Some of the documentation allegedly showed that Jefferson had "invented fake employees" and used their names to sign client notes, the DOJ said.
The department claimed that Brown did not keep notes "despite being required by Program rules to do so." The DOJ said Jefferson and Brown "fabricated emails" about purported clients and used ChatGPT to create fake client notes.
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"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."