Victims of Medicaid fraud who filed a class action lawsuit against Arizona are moving forward with their case and claim corruption exists inside state agencies.
Starting in 2019, bad actors defrauded the state’s Medicaid system out of an estimated $2.8 billion by charging for rehabilitation services they didn’t provide.
The scheme largely targeted Native Americans through the American Indian Health Plan fee for service program administered by the Arizona Health Care Cost Containment System, the state’s Medicaid agency.
The state has been trying to get the case — which was filed in 2024 — dismissed.
At the time, attorney Dane Wood estimated 2,000 people died in fraudulent sober living homes.
The state Supreme Court rejected the last dismissal attempt in May.
Wood along with attorney John Brewer pushed back on state officials touting their progress on fraud mitigation over the last several weeks, noting that only a few people have been charged and sentenced for the fraud.
The attorneys called those press releases and events “political infomercials.”
“Billions lost and only a handful go to prison, thousands injured and again only a small handful go to prison, there's something wrong with that,” Wood said Friday.
The attorneys claim they have evidence that corruption exists within both AHCCCS and the Arizona Department of Health and Human Services.
“We have crystal clear evidence of corruption within AHCCCS. From the application process, to the inspections, and also within DHS, to the payment process. Without question,” Brewer said.
He also alleges other state officials are aware of this corruption.
“The people that we know that were corrupt are still employed at AHCCCS. They're still there. And they're still conducting their jobs. And I believe that the state, sorry, I got to speak up, I believe that the state knows this,” Brewer said.
A spokesperson for the Attorney General’s Office declined to comment on those claims.
The plaintiffs’ attorneys referred to the case of LaRoie Davis, a former DHS employee who was charged with a series of crimes in 2024. The case is ongoing. Davis is accused of theft, forgery, money laundering, conspiracy and more.
The attorneys also brought up the case of Farrukh Ali, who’s charged of singlehandedly defrauding Medicaid of $650 million.
It’s possible that Ali will never see the inside of the courtroom, as he appears to have left the country.
“How can this one man rip off AHCCCS $650 million without somebody having oversight of the checks that are going out the door every day, every week, every month, and then it builds up into years of activity?” Brewer asked.
Brewer and Wood are working with victim advocate Reva Stewart, who’s been aiding victims of Medicaid fraud for years. She said the most successful outcome she can hope for with the class action lawsuit is accountability from the state.
“In this case, every person who has dealt in AHCCCS and ADHS is wrong because nobody wants to actually say, ‘I was wrong. I did it. It's my fault,’” Stewart said.
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