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20 People, Health Care Business and Church Charged in Sober Living Scheme in Arizona

  • On Tuesday, an indictment was filed against twenty individuals, a behavioral health company, and a church for orchestrating a $60 million Medicaid fraud scheme in Arizona linked to sober living facilities.
  • The scheme arose from unlicensed sober living homes referring clients to a behavioral health business that billed for incomplete or unprovided addiction and mental health services.
  • Happy House Behavioral Health LLC is accused of transferring $5 million in Medicaid funds to a church that served as both its landlord and a recipient of the money, which the church described as a donation made in good faith.
  • Attorney General Kris Mayes is leading an ongoing effort that has resulted in charges against over a hundred individuals and multiple companies for Medicaid fraud and operating unlicensed sober living homes, with many cases involving Native American communities.
  • The fraud caused payment suspensions for over 100 providers and left many Native American clients, mainly Navajos, homeless on Phoenix streets after sober living homes lost funding and evicted residents.
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KPNX broke the news in Phoenix, United States on Tuesday, May 20, 2025.
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