Man pleads guilty to defrauding now-defunct Minnesota housing program

A man accused of defrauding a Minnesota program meant to provide housing consulting services pleaded guilty to wire fraud on Wednesday.

Abdifitah Mohamud Mohamed was one of the first people charged in a scheme to defraud the Housing Stabilization Services Program, which was shut down last October after federal regulators found it was "riddled with fraud."

Mohamed was charged in September. His sentencing has not yet been scheduled.

According to the Department of Justice, Mohamed operated a program called Foundation First Services LLC out of an office suite in St. Paul. He claimed to provide reimbursable consultation to other HSS providers but instead submitted fake and inflated bills. 

The Department of Justice says that between April 2023 and May 2025, Mohamed pocketed between $300,000 and $400,000.

When HSS launched in 2020, the estimated cost was about $2.5 million a year. But by 2024, the cost had ballooned to over $100 million. The Medicaid program was intended to help seniors and people with disabilities find and maintain housing.