- Details
- By Elyse Wild
The indictments are the latest in the state’s crackdown on bad actors behind the scam, estimated to have cost the state upwards of $2.5 billion.
Happy House Behavioral Health, LLC, faces charges of conspiracy, fraud, forgery, theft, and money laundering, according to Monday’s indictment.
Hope of Life International Church, based in Phoenix, also faces money laundering charges. The indictment alleges the mental health business paid $5 million in July 2023 to the church, which later wired $2 million to an entity in Rwanda.
In all, more than 100 people and several companies have been charged in cases brought by Attorney General Kris Mayes’ office in the state’s crackdown on Medicaid fraud and unlicensed sober living homes, many of which targeted tribal community members. The state has suspended payments to more than 100 providers as part of the crackdown.
In an interview with a local Phoenix news station, Attorney Josh Kolsrud, representing the pastor of Hope of Life International Church, asserted his client did not know about the fraud. “He rented out his property and is now being indicted on four counts of fraud and abuse,” Kolsrud said.
Between 2019 and 2023, thousands of Native Americans in Arizona and as far away as Montana reported being kidnapped – forced into unmarked SUVs and vans under false pretenses — given alcohol and drugs such as fentanyl or methamphetamine, subjected to fraudulent mental health services, held prisoner, and eventually ejected onto the street or dropped off in remote rural areas with no means of transportation.
Victims were enrolled in the American Indian Health Program through the state’s Medicaid agency, the Arizona Health Care Cost Containment System (AHCCS). The homes billed AHCCS for patient care in excess of $1,000 per day per patient. Dozens died in the homes, and many remain missing. The mass fraud came to light in May 2023 when state officials held a press conference announcing they would take action against 100 fraudulent providers involved in the scheme. By August, the number grew to 131; by May 2024, it had ballooned to 375 providers.
Arizona lawmakers passed legislation in April to crack down on the fraud, but advocates and victims say it doesn’t go far enough.
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