Judge overturns $7 million Medicaid fraud conviction

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Abdifatah Yusuf was found guilty in August in a $7 million Medicaid fraud case. However, the jury’s verdict was overturned Nov. 20 by a Hennepin County judge.

Yusuf was charged in June 2024 after investigators concluded that he defrauded Minnesota’s Medical Assistance program through his agency, Promise Health Services LLC. Although Promise claimed to provide home- and community-based waivered services, the company had no actual office and operated for years from a mailbox at a Central Avenue address. According to the charges, Yusuf and several family members illegally obtained Medicaid funds by billing for services that were never provided, submitting bills supported by falsified or nonexistent documentation, significantly overbilling for services, and offering kickbacks to clients to induce them to accept “services” from the agency.

In June 2024, Attorney General Keith Ellison announced that three people had been charged with defrauding the Medicaid program out of $9 million. Yusuf was one of the individuals. Investigators determined that Promise stole more than $7 million during Yusuf’s operation of the business. Evidence supplied by the Attorney General’s Office showed that Yusuf funneled over $1 million from Promise’s accounts into his personal bank account and withdrew more than $387,000 in cash. Despite lacking a physical office, Yusuf and his wife, Lul Ahmed, spent more than $22,000 at furniture stores. They also spent more than $42,000 at luxury auto dealerships and over $80,000 at high-end clothing retailers.

Yusuf was convicted on six counts of aiding and abetting theft by swindle involving more than $35,000. Jurors also determined that several aggravating factors were present, allowing for a potential upward departure from the standard Minnesota sentencing guidelines.

“Stealing money meant for poor people’s health care and using it to buy luxury cars and designer clothes is as shameful and disgraceful as it gets,” Ellison said. “I am pleased that my office convicted Yusuf, and I am committed to recovering as much of the money he stole from taxpayers as possible.”

However, the verdict was overturned by 4th District Judge Sarah West.

“While there was a significant amount of investigation and work put into the case against Mr. Yusif, there was not enough from which to infer Mr. Yusuf’s guilt,” West asserted, finding that withdrawals signed by him were just “purported to be.”

“While the Court is troubled by the manner in which fraud was able to be perpetuated at Promise, the State’s evidence did not exclude other reasonable, rational inferences that are inconsistent with Mr. Yusuf’s guilt,” West wrote.

West reasoned that, while Yusuf owned the organization, it was his brother, Mohamed Yusuf, who was being fraudulent. “[T]he State overinflates the actual fraud in their investigation and presentation, failed to provide actual circumstantial evidence tying Mr. Yusuf to his brother’s activities, and the evidence is insufficient to sustain a conviction for the six counts of Aiding and Abetting Theft By Swindle.”

West noted that while the court was “concerned that he may have been more involved than the evidence presented makes it appear,” ultimately she found that she had no other option than to grant defense’s motion due to “the reasonable inference inconsistent with guilt that comes from the case presented.”

The Attorney General’s Office is appealing.