Federal and state fraud investigators search Minnesota autism centers

MINNEAPOLIS — Federal and state authorities searched the autism service providers Iska Inc. and Bright Horizon Therapy Center, along with other sites in Minnesota on Thursday.

An FBI spokesman said they are working with a handful of agencies on “court-authorized investigative activity at several sites.”

The FBI declined to provide additional details, citing an active investigation. But the Minnesota Attorney General’s Office said their investigators were involved with searching Iska Inc. and Bright Horizon Therapy Center.

Iska Inc., which is based in St. Louis Park, received more than $16.7 million in Medicaid funds for autism services between 2018 and 2025, according to Minnesota Department of Human Services data. Bright Horizon Therapy Center got nearly $17.7 million from 2020 to 2025, the data shows.

Both businesses were billing Medicaid for other services in addition to the autism program in recent years, the data show.

Iska billed for a multitude of services, including providing aid through the Housing Stabilization Services program, which the state shut down over fraud concerns. And Bright Horizon Therapy Center billed for adult rehabilitative mental health services, another program that has been vulnerable to fraud.

The U.S. Department of Health and Human Services Office of Inspector General, the Minnesota Attorney General’s Medicaid Fraud Control Unit, the Bureau of Criminal Apprehension, criminal investigators at the Internal Revenue Service and U.S. Postal Inspectors were working with the FBI on Thursday’s investigations, an FBI spokesman said.

The searches come ahead of a visit by Vice President JD Vance to Minnesota on Friday. Vance and members of the White House Task Force to Eliminate Fraud will be holding a news conference in St. Cloud, and the vice president’s office said they will be making an announcement about “the Administration’s War on Fraud.”

Employees at businesses near Bright Horizon Therapy Center spotted more than a dozen federal agents from the FBI, IRS and Medicaid Fraud Control Unit converge there just before 8 a.m. Thursday.

Witnesses described how one agent handed a piece of paper — an apparent search warrant — to the landlord or property manager of Bright Horizon, who let them in. The autism center is located toward the rear of a nondescript strip mall in Edina, surrounded by small business offices.

Drew Mills, who works for a local manufacturing company, told The Minnesota Star Tribune that he and his colleagues became suspicious of the autism center in recent years after a consistent lack of activity and foot traffic.

“We were saying, ‘This is really weird. It seems like nothing is happening here,’” Mills said. “People don’t really show up — and when they do, it’ll be like one woman with three kids, who walk in and five minutes later they all leave.“

Eventually, Mills did some research on Bright Horizon and said their website, which has since been taken down, mentioned mental health services and assisted living. That made him suspect potential fraud.

“I had a feeling it was only a matter of time,” he said of the raid, which was happening as he arrived at work Thursday morning.

“I don’t think we should have people in our community that are committing this massive fraud,” he added. “That’s a huge burden on actual taxpayers.”

The president of MBG Property Management, which operates the building in Excelsior where Iska has a corporate office, confirmed federal agents searched the property for several hours Thursday.

“The people at Iska have paid their rent on time and have been kind and respectful tenants,” said the man, who declined to provide his name. He noted that the FBI was also respectful to staff and “I assume was just doing their job.”

He declined to provide further details about the operation or say what had been taken.

Staff at Bright Horizon and Iska did not respond to calls and emails Thursday.

Iska’s website describes the business as a “culturally competent agency that provides specialized therapy and social services to disabled individuals in the Metro area. We believe everyone should be the best version of themselves and those who need special support can get the proper professional support, so they can reach their full potential.”

Both of the businesses searched Thursday got funding through the state’s Early Intensive Developmental and Behavioral Intervention, which is intended to support young people with autism and their families and has been targeted by fraudsters. The number of providers and Medicaid dollars flowing to the program have exploded since Minnesota rolled it out around 2018.

Last year, state officials labeled it one of 14 Medicaid-funded programs at “high risk” for fraud. Legislators and the Walz administration made numerous changes to weed out fraudsters and prevent bad actors from entering the autism program. Many in the industry have said the state’s crackdown has harmed good providers and warn families could lose needed services if companies are forced to close.

The Minnesota Department of Human Services, or DHS, said it started contracting with private sector health care auditors in January to do targeted audits of billing outliers in the autism service program. The agency also stressed the program is a crucial to improve the lives of children with autism and their parents.

DHS officials said in a statement Thursday that they are tracking the latest law enforcement activity.

“Collaboration between local, state and federal authorities is essential to fighting fraud and stopping criminal schemes,” the agency said. “When we see evidence of fraud, we shut off money and refer suspected criminals to law enforcement. We are thankful to see criminals being held accountable.”

Five other centers that provide the early autism intervention services were also searched in April, according to the Minnesota Attorney General’s Office. The Minneapolis and Fridley locations of Aspen Associates, Empower Skill Academy in Fridley, Global Star Therapy in Savage and the Mendota Autism Center in Mendota Heights were all searched.

Law enforcement executed 22 search warrants in Minnesota around that time, the Department of Justice said. Investigators also raided social service providers in Massachusetts and Washington state in April, and the Department of Homeland Security described search warrants as targeting “the rampant fraud of U.S. taxpayer dollars.”

The April searches followed a lull in high-profile fraud raids by federal investigators, who previously made headlines when they searched two autism service providers in Minneapolis and St. Cloud in December 2024. At least four people connected to those autism centers have been charged with defrauding a state autism services program.