Arizona’s sober living home scandal has taken a new turn. Here's the latest on the indictments.
Attorney General Kris Mayes announced today that a state grand jury has indicted 20 people, a mental health business and a church connected to a massive Medicaid fraud scheme involving sober living homes.
The indictment announced Tuesday alleged Happy House Behavioral Health LLC was paid the money for services that were either never provided or only partially completed and that there was billing for clients who were deceased and incarcerated.
Authorities say sober living homes referred clients to the behavioral health business, which received money from the Arizona Health Care Cost Containment System and then paid the homes for the clients in violation of state law.
Money laundering charges alleged Happy House Behavioral Health paid $5 million in July 2023 to a Hope of Life International Church, which later wired $2 million to an entity in Rwanda.
The charges include money laundering, theft, conspiracy, fraudulent schemes, patient referral fraud and forgery.
These indictments are part of an ongoing investigation into a $2.8 billion fraud that exploited Arizona’s Medicaid system, particularly targeting Native Americans seeking addiction treatment.
To date, more than 100 individuals have been indicted, with 25 convictions and approximately $140 million recovered.
The scam had left an unknown number of Native Americans homeless on the streets of metro Phoenix as fraudulent sober living homes lost their funding and turned former residents out onto the streets.
Navajos account for most Native Americans grappling with addictions who have been affected by the scam. Navajo officials say that in some cases, people who ended up in the homes were picked up in unmarked vans and driven to the Phoenix area from faraway places on the sprawling Navajo Nation that stretches across northern Arizona, and parts of New Mexico and Utah.
Arizona enacted new legislation last month to increase oversight of sober living homes, aiming to prevent fraud in the future.
EDITOR'S NOTE: This story's headline has been updated to clarify 22 individuals and entities were charged.
