Arizona AG announces 42 new Medicaid fraud indictments, bringing total to 280

Arizona Attorney General Kris Mayes announced 42 Medicaid fraud indictments on Wednesday, bringing the total to 280 people, including bad actors who exploited a loophole in the American Indian Health Plan.

Arizona’s Medicaid system was defrauded out of an estimated $2.8 billion through bad actors billing the state for sober living services they never provided.

The 42 new indictments include a range of charges from unlicensed medical practice, money laundering and conspiracy to negligent homicide.

“These cases are different in their details, but they share a common thread. People who saw the healthcare system, and the people who depended on that healthcare system, as something to exploit,” Mayes said.

Mayes said her office is doing as much as it can to combat Medicaid fraud and bashed state lawmakers for cutting her budget slightly this year.

One of the indicted parties is a man called Thomas Heard. He was sentenced to two years of prison time followed by seven years of supervised probation on June 12 for fraud and exploitation.

Heard alone made millions off of Medicaid fraud, enough to purchase a mansion he filled with designer clothes, watches and shoes — along with 40 cars.

Mayes showed bodycam footage of a walkthrough of Heard’s mansion, which looks in line with what she described to KJZZ in 2024.

“Very expensive cars, very expensive homes, closets full of very expensive shoes that I'd never heard of before. In some cases, the state and taxpayers were defrauded out of millions of dollars by a single person,” Mayes said of fraudsters at the time.

Mayes said her investigators have only been able to recover about $140 million and a portion of it will be paid to victims as restitution. Some of it will go back to the Arizona Health Care Cost Containment System — the state’s Medicaid agency.

She noted that federal authorities are also pursuing their own cases.

In May, Mayes said her office has reduced fraud in the American Indian Health Plan program by 92%. She said it’s still unclear how many victims were impacted and told tribal communities to stay vigilant, as they’re often the target.

Her recent updates on Medicaid fraud mitigation also come in the wake of the U.S. Department of Health and Human Services Office of Inspector General warning all 50 states that the federal government is prepared to withhold funding if states aren’t doing enough to combat Medicaid fraud.

Mayes’ spokesperson Richie Taylor said Wednesday that the AG’s Office hasn’t heard anything from HHS since May.

Mayes advised all Arizonans to check whether their providers are licensed before booking services from drug rehabilitation to midwifery or even Botox.

“If you have any suspicions, if anything goes wrong, please contact my office immediately so that we can take action, so that we can stop these guys,” she said. “And really, today is about sending a message that if you do this, we're coming after you.”