KARE 11 Investigates: FBI looking into Minnesota autism payments
Feeding Our Future fraud defendants also billed taxpayers for services allegedly provided to children with autism.
What began as a massive federal investigation into fraudulent claims for meals served to children has expanded to review payments made through another program designed to help kids, sources tell KARE 11.
The FBI is investigating a series of Minnesota-based companies that billed taxpayers for services they claimed to provide for children with autism, sources familiar with the investigation say.
Records show that one of the 21 defendants who has already pleaded guilty in the $250 million Feeding Our Future meals scandal also founded a company that purported to provide autism services – billing Medicaid for hundreds of thousands of dollars.
Bekam Merdassa entered a guilty plea last October for his role in the Feeding Our Future case. United States Attorney Andy Luger has called Feeding Our Future the largest pandemic fraud in the nation.
Merdassa admitted he formed a non-profit called Youth Inventor's Lab which operated as a shell company and created fake meal count sheets to help his co-conspirators steal more than $3 million in federal child nutrition money – without serving so much as a single bagged meal to kids.
Autism company formed
Documents reviewed by KARE 11 show Merdassa also created a second company – Epic Therapy – around the same time. It claimed to provide services for autistic children and operated out of the same small St. Paul storefront as Youth Inventor’s Lab.
According to the Minnesota Department of Human Services, Epic Therapy received $106,458 in Medicaid reimbursements for autism-related services in 2020.
That number ballooned to $633,219 in 2021 when Merdassa's admitted phony meal scam was taking off.
Overall, state data shows autism-related payments in Minnesota have exploded in recent years from $5.1 million in 2018 to $68.6 million in 2021, and then up to $163.5 million in 2023.
As of mid-September, $178.6 million has been paid out this year.
The number of autism providers has soared from 18 in 2018 to 220 this year, adding to the concern about possible fraud.
Just like those Feeding our Future defendants accused of billing for meals never served, sources confirm that the FBI is investigating some autism companies for services allegedly never provided.
Legitimate need
“It is disappointing because those resources need to be allocated appropriately,” said Jules Edwards, co-founder of MN Autistic Alliance.
Edwards says there is a real need for legitimate services for children. “And when those funds are misused, that is taking away resources from people who need them,” she told KARE 11.
No criminal charges have been filed in the autism investigation.
Merdassa is awaiting sentencing in the Feeding Our Future case. The state says it terminated Epic Therapy as a medical assistance provider in December 2021 – months after the FBI’s investigation into meal fraud began.
Meanwhile, in the wake of exponential growth and fraud concerns, state officials say they are considering whether Minnesota should begin licensing autism centers.