In Arizona, a sweeping $2.8 billion Medicaid fraud scheme promised addiction treatment and recovery. Instead, it exploited thousands of vulnerable people — many of them Native American — and left communities across the state searching for answers.
Now, with criminal cases underway and state agencies pledging reform, survivors and volunteers are left to repair what’s been broken: trust, dignity and the chance for a real recovery.
The scam targeted Arizona’s Medicaid program, known as AHCCCS, by using fake sober living homes to bill the state for addiction treatment services that were never provided. Many patients were recruited from tribal reservations and urban streets, enticed by promises of housing and care.
Instead, some were shuffled between homes, often receiving little more than a mattress and minimal supervision. Investigators say over 100 people have been indicted, but only a fraction of the money has been recovered.
“It’s not that people are fools,” said Ricky Gonzales, who has experienced both homelessness and fake treatment centers. “It’s just that they’re vulnerable, and they’ve got nobody.”
Raquel Moody knows that cycle well.
Raised on the White Mountain Apache Reservation, Moody became addicted to alcohol at 17 and later turned to meth. After a stint in prison, she sought help — but instead found herself trapped in a loop of fraudulent recovery homes.
“They were all connected,” Moody said. “If you were told to leave one, they had someone already waiting to take us.”
She cycled through 13 different fraudulent facilities, all the while receiving no real treatment. “They just made it OK for us to be stuck in our addiction,” she said.
Now two years sober, Moody works as a behavioral health technician at Scottsdale Recovery Center, one of the treatment centers that’s trying to pick up the pieces.
“When we do our outreach — a majority of them have been in these fraudulent places. They’ve lost hope.”Raquel Moody
It’s also one of the recipients of a $6 million state grant program announced by Arizona Attorney General Kris Mayes to support tribal nations and nonprofits in helping those impacted by the fraud.
“I’m glad I work here,” Moody said. “It gives me a chance to work on myself, too.”
Still, she says many people they try to help don’t believe in the system anymore — and she understands why.
“When we do our outreach — a majority of them have been in these fraudulent places,” she said. “They’ve lost hope.”
AHCCCS, in a statement, said the agency has implemented more than 20 new oversight measures, suspended hundreds of providers, and provided direct support to more than 11,000 individuals since the scheme was uncovered in May 2023.
AHCCCS said it remains committed to restoring trust and working with tribal partners, law enforcement and oversight agencies to ensure impacted individuals receive care and justice.
Reva Stewart has spent years documenting the damage.
A member of the Navajo Nation, Stewart began noticing white vans circling tribal communities in 2020. One of those vans took her cousin, and when she tried to locate him, she said she discovered a network of fake treatment homes operating across Arizona.
Through her volunteer group, Turtle Island Women Warriors, Stewart has gathered evidence on dozens of facilities and submitted reports to law enforcement and state agencies.
But she says many of those reports were ignored — and in some cases, leaked back to the very people accused of abuse.
She says her work now focuses on outreach and wellness checks — not just offering food or water, but rebuilding trust.
“The harsh reality is telling them that if they continue to be out there, they will die,” Stewart said.
Although the state launched the $6 million grant program last fall, only 11 organizations applied — leaving more than $800,000 unclaimed.
In one case, her team found a man collapsed in the heat who had been missing for weeks. They helped clean him up and got him on a bus home. Today, Stewart says, he’s working two jobs and caring for his parents.
“He’s still fighting his demons,” she said, “but he’s at home. He’s safe. And he’s alive.”
Although the state launched the $6 million grant program last fall, only 11 organizations applied — leaving more than $800,000 unclaimed. Scottsdale Recovery Center was one of the recipients and says it’s using the funding to expand services for those affected.
For Moody, Stewart, recovery is about more than services. It’s about rebuilding faith in a system that failed them.
“If we can help one person get home instead of in a casket,” Stewart said, “we’re going to keep doing this.”
As criminal investigations continue and legal cases unfold, community advocates say lasting solutions will require time, accountability and cooperation across agencies and tribal nations.
