Philadelphia men plead guilty in $3.5 million Minnesota Housing Stabilization Services fraud tied to Minneapolis recruitment trips
Federal case centers on Housing Stabilization Services billing for services prosecutors say were not delivered
Two men from Philadelphia have pleaded guilty in federal court to a wire-fraud scheme that targeted Minnesota’s Housing Stabilization Services (HSS) benefit, a Medical Assistance program created to help seniors and people with disabilities find and keep housing. Prosecutors say the scheme generated about $3.5 million in improper payments tied to claims submitted for roughly 230 Medicaid beneficiaries.
The defendants, identified in court records as Anthony Waddell Jefferson, 37, and Lester Brown, 53, admitted they repeatedly traveled from Philadelphia to Minneapolis to recruit people at homeless shelters and Section 8 housing facilities. They presented themselves as “The Housing Guys,” enrolled their businesses as HSS providers, and then billed for services that prosecutors say were not provided.
How the program works, and why documentation matters
HSS was launched in 2020 as a Minnesota Medical Assistance benefit and later became a focal point of fraud concerns within the state’s broader safety-net system. Minnesota statutes governing the benefit include detailed documentation requirements, including service dates, start and stop times when billed by the hour, descriptions of services, and signatures tied to service delivery and recipient verification.
In the Philadelphia case, prosecutors say the defendants attempted to support disputed billings by fabricating records. The court record describes the creation of false emails and the use of generative artificial intelligence to produce fake client notes when insurers sought documentation. Prosecutors characterized the conduct as a concealment effort designed to make unsupported claims appear legitimate.
Timeline and charges
Time period alleged in court records: February 2022 through June 2025
Estimated loss: approximately $3.5 million
Charge and plea: each defendant pleaded guilty to one count of wire fraud
Potential penalty: wire fraud carries a maximum sentence of 20 years in prison; sentencing will be set by a federal judge using statutory factors and federal sentencing guidelines
Broader enforcement and program changes in Minnesota
The investigation involved multiple federal agencies, including the FBI, IRS Criminal Investigation, the Department of Health and Human Services Office of Inspector General, Homeland Security Investigations, and the U.S. Postal Inspection Service.
The case also arrives after major structural changes to the underlying benefit. Minnesota’s Department of Human Services terminated HSS on Oct. 31, 2025, after announcing plans to end the program amid widespread fraud concerns and receiving approval from the federal Centers for Medicare & Medicaid Services. The state has described efforts to connect impacted recipients to other services following the program’s conclusion.
Sentencing dates have not been finalized in the publicly described case summary; the court will determine the penalties after reviewing guidelines and statutory factors.