Two owners of a Housing Stabilization Services provider are charged in federal court after they allegedly collected nearly $1 million in Medicaid reimbursements while overbilling for the services they provided.
Mustafa Dayib and Abdulbasit Ibrahim are each charged with one count of conspiracy to commit healthcare fraud, records show.
An affidavit filed on Wednesday alleges the pair registered Vitality Health Services in June 2022 and enrolled in HSS six months later. From January 2023 through July 2025, Dayib and Ibrahim received $975,000 in reimbursements through Minnesota’s Medicaid program.
Prosecutors allege Vitality “significantly overrepresented” the services it provided to its roughly 250 clients, either billing for hours well beyond the work actually provided or for services that were not performed at all.
HSS background
HSS was established in 2020 as a program to connect vulnerable adults to stable housing. At launch, its projected annual cost was $2.6 million, but spending had ballooned to more than $100 million by 2024.
Federal authorities began executing search warrants at the offices of HSS providers under investigation for fraud in July.
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The first round of charges dropped in September, with more prosecutions to follow in December, including two defendants accused of “fraud tourism.” Wednesday’s charges brings the number of fraud defendants tied to the program up to 15. At least two have pleaded guilty so far.
HSS was one of 14 Medicaid-based services that the Minnesota Department of Human Services identified last year as particularly vulnerable to fraud, and it was ultimately shut down on Oct. 31.
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