Attorney General Keith Ellison announced Medicaid fraud charges against nine people on Tuesday, including a therapist who allegedly bilked Minnesota’s medical assistance program out of more than $2 million.
The Medicaid Fraud Control Unit, a 50-person division within the attorney general’s office, worked with local law enforcement to investigate the cases. Since 2019, the MFCU has convicted over 350 people for Medicaid fraud.
The fraud charges announced Tuesday totaled $3 million. More than $2 million of that is connected to Peter Meilahn, a Duluth resident who investigators say ran his own psychotherapy practice and worked as an independent contracted therapist for Franklin Family Services. Investigators found nearly 30,000 false claims for services he did not provide, and, on multiple occasions, he continued to bill Medicaid for months after he stopped seeing a patient, according…
PAYROLL & HR CONTROLS (PREVENTING “GHOST” SCHEMES)
Payroll fraud is often the hardest to detect because it “looks” like a normal business expense.
- Segregation of Duties (SoD): The person who adds new employees to the system must not be the same person who approves the monthly pay run.
- Mandatory Vacation Policy: Require all financial and HR staff to take 5–10 consecutive days of leave annually. Fraud often surfaces when the perpetrator isn’t there to “hide” the trail.
- Ghost Employee Audit: Perform a quarterly “Headcount Reconciliation” where managers must physically verify every name on their payroll list exists.
- Self-Pay Blocking: Ensure the payroll software has a hard-coded block preventing administrators from editing their own salary or bank details.