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Fake Arizona rehabilitation centers are defrauding Native Americans far from home, officials warn during investigations

PHOENIX (AP) — Autumn Nelson said she sought help for alcohol addiction last spring when fellow members of Montana’s Blackfeet Nation suggested a rehab center in Phoenix, far south.

The 38-year-old said the center even bought her a plane ticket to make the 1,300-mile journey. But Nelson said she was kicked out after a month after questioning why there was one therapist for 30 people and no Native American staff, despite the focus on Native clients.

“Suddenly I was outside in the 108-degree heat in Phoenix, Arizona,” said Nelson. “I was scared and didn’t know where to go.”

Now back on the Blackfeet Reservation, Nelson is one of hundreds of Native Americans targeted by scammers in the Phoenix area. The billing schemes often left customers homeless and, in some cases, funded lavish lifestyles for the fraudulent providers, authorities said. Arizona has been defrauded of hundreds of millions of dollars by such scams in recent years, state officials estimate.

The fraudulent charges were filed primarily through the American Indian Health Program, a Medicaid health plan that allows providers to directly bill for reimbursement for services rendered to American Indian and Alaska Native tribesmen.

Under federal law, Native Americans can choose either the fee-for-service plan or a managed care plan. The state Medicaid program known as AHCCCS – Arizona Health Care Cost Containment System – contracts with managed healthcare organizations to provide health services to most Medicaid members in Arizona, while the fee-for-service plan allows American Indians to use any provider registered with AHCCCS.

The far-reaching ramifications of the scam are now becoming known as warnings are issued by state and tribal governments outside of Arizona, as well as Montana’s US Senator Jon Tester, a Democrat, and Governor Greg Gianfonte, a Republican.

Arizona Governor Katie Hobbs and Attorney General Kris Mayes, who have said authorities believe a Nevada-based criminal syndicate launched the first scams, announced in May that they were stepping up an investigation into fraudulent Medicaid billing that was started before taking office in January. The FBI and the U.S. Attorney General have joined Arizona prosecutors in the investigation. And Tester has called on the Centers for Medicare and Medicaid to investigate as well.

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Non-medical transportation companies that allegedly took Native Americans from their reservations to bogus programs should also be investigated, said Arizona State Senator Theresa Hatathlie, a Democrat and Navajo who lives on the reservation. The New Mexico Attorney General announced a “Don’t get carried away” campaign, warning people not to accept transportation from strangers to get to Arizona’s rehab centers.

The Navajo Nation and the Blackfeet Nation declared public health emergencies to release resources to help affected members. The Navajo Nation also launched a program called Operation Rainbow Bridge to help members access legitimate programs or return to the reservation.

Blackfeet members who recruit for bogus programs on the reservation risk thousands of dollars in fines and even expulsion, the tribal leadership concluded.

Arizona has since suspended Medicaid payments to the center where Nelson was staying — a phone number on the provider’s LinkedIn account no longer works — along with more than 300 other providers based on “credible allegations of fraud” as of Aug. 18. Some providers closed and some have appealed to remain open.

AHCCCS enacted stricter controls, including a six-month moratorium on enrolling new health clinics for Medicaid billing. Site visits and fingerprint background checks are now required for high-risk behavioral health providers when they enroll or revalidate.

The scams exploded during COVID-19 lockdowns.

“There were a lot of relaxed rules that allowed those scammers to get in,” said Dr. John Molina, director of health services at the publicly funded Native Health, an Indian health center in Phoenix. He said addiction among Native Americans is rooted in generations of trauma.

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“This takes us back to the early years of colonization and how natives were abused for economic gain,” says Molina, of Pascua Yaqui and San Carlos Apache descent.

Last year, Johnwick Nathan, 29, was charged with multiple counts of fraud, money laundering and forgery. Authorities allege that Nathan illegally billed Medicaid on behalf of Native American customers, a charge he denies. He is scheduled to be tried on September 18.

The scams can be very lucrative. In a federal case, a woman who ran a bogus recovery program in Mesa, Arizona, pleaded guilty to fraud and money laundering in July after taking in more than $22 million in Medicaid money between 2020 and 2021 for services never rendered.

Court records don’t say whether patients were Native Americans, only that they were brought to the facility only once and then billed to their name for up to 90 days. Bills were also made for dead and prisoners.

Diana Marie Moore, 42, will be sentenced Dec. 18 following an investigation by the Internal Revenue Service. A federal court ordered her to forfeit property she obtained through the fraud, including four homes, seven luxury vehicles and luxury items including Rolex watches, diamond rings and a rainbow of Louis Vuitton handbags.

Navajo police visiting Phoenix in recent months have found hundreds of Indians living on the streets after the centers closed, said Harland Cleveland, special operations manager for Rainbow Bridge. Many are drunk and don’t have cell phones to call their families, he said.

Former clinic clients “are too scared” to testify before the Senate, Hatathlie said.

Reva Stewart and several other Native American women living in Phoenix run an online network to find missing people whom they refer to as “our relatives” by posting details of lost persons on social media.

Stewart, who is Navajo, got involved a year ago after seeing van drivers pull up outside the Phoenix Indian Medical Center to offer people a place to stay.

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“Something wasn’t right,” says Stewart, who runs a native art store nearby. Around that time, her cousin disappeared in a similar vehicle in New Mexico.

After an hour-long journey, the cousin was kicked out of the center in Phoenix where she was taken after she refused to fill out intake forms, Stewart said. She said her cousin is now back on the reservation and sober.

Not all endings are happy.

Raquel Moody, who is Hopi and Apache, described a house where residents were allowed to drink alcohol. Moody said she left in December after an argument with her cousin Carlo Jake Walker, who continued to imbibe.

Months later, Moody learned that Walker died of alcohol poisoning and was buried in a pauper’s grave. Moody quit drinking and now volunteers with Stewart’s group #stolenpeoplestolenbenefits to help Native American families find lost loved ones who have gone to rehab.

Addiction recovery is a challenge on reservations, where resources for residential treatment are not always available.

Nearly half of the Navajo Nation’s 25,000 arrests in 2021 were for public intoxication, even though federal law prohibits the sale of alcohol on tribal lands.

A small residential addiction treatment program on the Blackfeet Reservation is usually full.

Blackfeet member Laura McGee’s brother went missing shortly after arriving at a Phoenix facility in the spring, she said. After a harrowing search, the family found him and brought him back to Montana. Arizona later suspended Medicaid payments to the provider while police investigated.

Now McGee teams up with Stewart to help other families find loved ones. She recently crossed paths with Nelson online, who said she’s optimistic about staying sober.

“That previous situation traumatized me,” Nelson said. “But now it has encouraged me to get up.”

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