Arizona sued in lawsuit representing 7,000 Native Americans victimized by fake sober living homes

PHOENIX — The slow wheels of justice are propelling Arizona officials into the courtroom through a class-action lawsuit filed against the state over fraudulent sober living homes.

Thousands of Native Americans in Arizona were victimized by these schemes, which stole $2.8 billion from Arizona taxpayers, according to a complaint filed by BrewerWood Law Firm.

“There was a lot of harm being done, and the state knew about it,” attorney John Brewer told KTAR News 92.3 FM’s Arizona’s Morning News on Thursday.

In fact, state officials were informed about fraudulent abuses of the American Indian Health Program back in 2019, Brewer added.

Arizona agencies sued over fraudulent sober living homes

BrewerWood Law Firm filed its class-action complaint against two state agencies. One is the Arizona Health Care Cost Containment System (AHCCCS).

Since AHCCS oversaw the American Indian Health Program, it’s responsible for enabling fraudsters, according to the lawsuit.

“Essentially, what they were doing is they were just billing, and AHCCS was approving,” Brewer said.

The other agency being sued is the Arizona Department of Health Services (ADHS). As the state’s health department, it should have nipped the fraud in the bud, according to Brewer.

Just how bad were these fraudulent sober living homes?

Many of the fraudsters facilitating these fraudulent sober living homes stem from Nevada, Brewer said.

“They came over here in Arizona, and they saw a golden opportunity,” Brewer said. “It was in the fee-for-service program of Medicaid — the state-run Medicaid, which is AHCCCS — and they just saw a billing bonanza.”

Fraudsters specifically targeted Native Americans. In fact, the Medicaid scams in Arizona were so prevalent that the Navajo Nation declared a public health state of emergency in 2023.

“They call this the white van syndrome. They were going up to the reservations,” he said.

One of the victims of these strategies was Carson Leslie, who died after going into one of these vans near Flagstaff.

“They gave him alcohol within the vehicle. He threw up and he died within the vehicle, and they just discarded his body,” Brewer said. “His blood alcohol, at the time of his death, when the coroner checked, it was 0.543.”

Cases like this aren’t rare. In fact, according to fraud victim advocate Reva Stewart, approximately 2,000 people have died or gone missing due to these fraudulent sober living homes, Brewer said.

“It’s one of the largest frauds in Medicaid, U.S. history,” he said. “But this isn’t just an Arizona program … this is federal money.”