We’re back, and thank you for watching. If you’re new here, we’ve been tracking the Minnesota Medicaid fraud situation for over a year now. Many people have been arrested, many have pleaded guilty, and many have been convicted. These are felonies.
Defrauding the American people out of thousands, hundreds of thousands, even millions of dollars—these are serious crimes. But a recent investigative report by a Minnesota news station found something that turns the whole thing on its head. Up to 80% of those who plead guilty can have their felonies removed from their records after completing probation. Eighty percent.
And it gets worse. Some of the people involved in these schemes have been hit with very small penalties—six months, a year in prison—even after stealing hundreds of thousands, if not millions, of dollars. Let’s get into it. 5 Investigates spent months reviewing hundreds of Medicaid fraud cases prosecuted by the Minnesota Attorney General’s Office.
Investigative reporter Kirsten Swanson discovered that many defendants walked away with little record of the crime they committed. Take the case of Lolita Fon Gonzales. She worked for MNSure, the state’s healthcare marketplace. In 2020, investigators say the public employee manipulated data in a state computer system, allowing Medicaid funds to flow to a company she had set up for her daughter.
Gonzales siphoned off more than $3,300 and was trying to steal another $10,000 when she got caught. The state’s Department of Human Services fired her. Three years later, the Minnesota Attorney General’s office charged her with medical assistance fraud, theft by swindle, embezzlement of public funds, and misconduct by a public officer or employee. In 2024, Gonzales pleaded guilty to two charges.
The transcript from that hearing shows her plea agreement included a stay of imposition. She was put on probation for a period of time. Amy Sweezy, a University of Minnesota law professor and former prosecutor, explained how the system works. If the defendant successfully completes all the conditions and terms of probation, the final felony sentence is never imposed.
In other words, the felony conviction gets knocked down. Court records currently show Gonzales convicted of a felony. But if she successfully completes probation next year, that felony becomes a misdemeanor. Sweezy called it an incentive for defendants to complete those terms of probation so that, at the end, there is no felony conviction on their record.
5 Investigates analyzed more than 250 Medicaid fraud cases charged by the Minnesota Attorney General’s office. They found nearly 80% of the convictions fall into this category—the defendant completes probation and the felony is reduced to a misdemeanor. At least 70 other convicted fraudsters had their convictions dismissed entirely after completing probation. Now, Keith Ellison is the Attorney General in Minnesota.
His office is instrumental in making these deals—accepting plea agreements, making recommendations, setting the tone for the cases. So what does he have to say about this practice? When asked whether felony-level fraud should result in a felony on someone’s record, Ellison said that’s not something the Attorney General ultimately decides. He pointed to the Minnesota Sentencing Guidelines, the standards judges use when deciding punishment.
Offenders with little to no criminal history convicted of theft of any amount receive a non-prison sentence. Ellison called the process an adversarial system involving both the prosecution and the defense. He argued that being charged is serious—defendants have to make court appearances and plead guilty to criminal wrongdoing in front of the whole world. He said it’s a serious consequence even if someone completes probation without a permanent felony.
But is it really? Remember, Amy Bock, the alleged ringleader of the Feeding Our Future fraud scheme, was sentenced to decades in prison. Some of the people involved have received long sentences. Others have gotten off with barely a slap on the wrist.
Take Zamzam Jama. She laundered half a million dollars for her role in the $300 million Feeding Our Future fraud scheme. Her sentence? Six months in prison.
Judge Nancy Brasel said Jama was one of the least culpable defendants and didn’t think she’d see Jama back in federal court for another crime. Jama was part of a family fraud operation run out of Bravo Restaurant and Cafe in Rochester, Minnesota. Her older siblings owned the restaurant. In total, the Jama family stole $5.
6 million, claiming to feed 1. 7 million meals out of their tiny restaurant in 2020 and 2021. Zamzam Jama used fraud money to buy a home in Rosemount and a Toyota RAV4. The feds seized the house, the vehicle, and nearly $150,000 from her bank account.
She was ordered to pay back $491,000. The other five Jamas haven’t been sentenced yet. They’re looking at a lot more prison time. Then there’s Abdul Abubakar Ali.
This morning, a judge handed him a 1-year and 1-day sentence after he pleaded guilty to conspiracy to commit wire fraud. Ali, along with two others, operated a federal child nutrition program site called Youth Inventors Lab. They claimed to have served approximately 1. 5 million meals to underserved children over seven months.
Federal prosecutors said they only served a small fraction of that. In all, federal investigators estimate Ali and his co-conspirators received more than $3 million in federal child nutrition program funds. So he gets one year for stealing $3 million. Let’s be honest.
I know all of you are outstanding citizens, but would you do a year for $3 million? Forget the wrongdoing for a second. If you had to serve one year in exchange for $3 million, would you take the deal? The judge gave Ali a sentence shorter than the pre-sentencing guidelines because, as the judge said, Ali already paid back a large chunk of his $122,000 restitution and helped with the investigative process.
So far in this massive fraud scandal, there have been 79 indictments, seven convictions, and several sentences. More sentences are coming. In fact, a woman is scheduled to be sentenced tomorrow who allegedly, along with her siblings, stole millions of dollars, buying a house and a car with the stolen money. Just when you thought things couldn’t get crazier, you find out that the person who stole your money is a felon—until they complete their probation.
Then they’re not a felon anymore. They were a felon back in those pre-probation-completion days, but once probation is done, no more felony. Congratulations. You graduated.
They get to graduate from felon to misdemeanor. I don’t know what to call a person who committed a misdemeanor. But I’ll let you decide what you think about this. Should you be able to have your felony conviction removed?
I admit, it seems like a good incentive to get people to complete their probation and stay on the right track. But it also feels wrong that you can steal millions of dollars from people and then, a year or two later, not even have a felony on your record. Let me know what you think. Drop a comment down below.
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We’ll see you back in the next one.
