Federal prosecutors bringing Maine’s first healthcare fraud case of its kind since 2019 failed Tuesday to persuade a judge to jail any of the six people accused of billing Medicaid for services that were never provided.
Faysal Kalayaf Manahe, 51, his wife, Noora Abd, 37, and four others are charged in an indictment unsealed Tuesday with running the scheme through Community Home Health Care, a South Portland agency Abd owns and operates. Prosecutors have not yet said how much of the more than $600,000 MaineCare paid the company was obtained through fraud.
The arrests come a week before the Nov. 3 election featuring a toss-up U.S. Senate race in Maine and after months of President Donald Trump’s administration casting the state as a haven for Medicaid fraud. Federal prosecutors had not filed a criminal health care fraud case in Maine since 2019, according to a Bangor Daily News review of court records.
The new case centers on an interconnected group of defendants. In late June, state health officials suspended MaineCare payments to Abd’s company. That same day, they also cut off Decent Health Care, an Augusta agency that Kalayaf Manahe helped form in 2018, according to corporate filings. A suspension notice shows that the company was also accused of billing for services it did not provide.
Neither state nor federal officials would say whether those cases are related.
“I can’t talk about whether there are other investigations or a linkage between the two,” Assistant U.S. Attorney Andrew McCormack said.
The unsealed indictment accused Kalayaf Mahane, Abd and four others of allegedly participating in a scheme that involved creating fake entries in a software design to log personal care and respite services, then billing MaineCare for services that were not actually provided. Prosecutors also allege that after Abd and Kalayaf Mahane learned they were under federal investigation in June, they pressured someone who knew about the fraud scheme not to speak with law enforcement.
The arrests perplexed lawyers, some of whom seemed caught off guard that the government had suddenly moved to lock up their clients for a nonviolent crime. One lawyer noted in court that the indictment was handed up last week but unsealed on Tuesday.
“The timing of this indictment so close to the midterm elections is interesting,” Thomas Marjerison, a lawyer for Kalayaf Manahe, said Tuesday as he left federal court in Bangor. “We look forward to our day in court and we’re going to prove that Faysal [Kalayaf Manahe] did nothing wrong.”
Marjerison declined to say whether federal prosecutors are also looking at Decent Health Care. Michael Conley, one of two attorneys for Abd and her company, also declined to comment Tuesday. A representative for Attorney General Aaron Frey, whose office helps investigate health care fraud, declined to comment on the case.
Vice President JD Vance singled out Gov. Janet Mills over fraud during a May visit to Bangor. In August, Dr. Mehmet Oz, who leads the Centers for Medicare and Medicaid Services, claimed without citing a source that 90% of Maine’s Medicaid billing was fraudulent.
Earlier this month, Frey’s office mistakenly sent news outlets a memo showing state prosecutors were frustrated by federal delays in at least two cases involving nearly $2 million in potential losses to taxpayers. Tuesday’s case was not one of them.
All six are charged with health care fraud conspiracy. Abd and Kalayaf Manahe are also charged with obstruction, and Mohammed Alkhalaf, 41, is charged with lying to an FBI agent by saying he had not created entry logs for anyone but himself. The other defendants are Adel Al Rashid, 47, his wife, Sura Almohammed, 47, and Ether Alyaseen, 46, the couple’s landlord.
Supporters of the defendants and multiple federal agents filled the courtroom’s benches at times during nearly six hours of hearings in Bangor.
Assistant U.S. Attorney Nicholas Scott asked that all six be held without bail, detailing each defendant’s ties to the Middle East and their assets as he argued they could flee the country. But Jonathan Goodman, Alyaseen’s attorney, called the argument that his client would sell his properties and flee to Iraq with his wife and two children “preposterous.”
During Abd’s hearing, Scott said the obstruction charge is supported by witnesses and a recording of a conversation between Kalayaf Manahe and a government witness. But Kristine Hanly, Abd’s other attorney, said nothing Scott described about obstruction involved Abd.
In a court filing, Conley argued there was no basis to jail Abd, who is pregnant with her fourth child. He questioned why agents moved to arrest her now when she had known about the investigation since June and had been indicted days earlier.
U.S. Magistrate Judge John Nivison released all six. They were ordered not to contact one another except for the married couples, and Nivison ruled that Alyaseen may communicate with Al Rashid and Almohammed through a third party.
Tuesday was not Kalayaf Manahe’s first time in federal court. He and three other home health care agency managers were indicted in 2022 on charges they agreed to fix pay rates and not poach each other’s workers during the COVID-19 pandemic. He was later acquitted.
Maine Monitor reporter Rose Lundy contributed to this report.