Between March 2018 and July 2024, a complex scheme involving fraudulent overbilling practices came to light, leading to the indictment of three individuals for conspiracy to commit wire fraud, wire fraud, and money laundering. The accused allegedly ran their scheme using a drug and alcohol treatment center called Evergreen Recovery, Inc., manipulating Medicaid and other health care programs to pocket funds for services that were never provided or didn’t qualify for reimbursement.
At the heart of the operation, the defendants used a deceptive tactic: offering free housing in “sober” homes they controlled as a lure. They made sure that clients could only stay in these homes if they enrolled and remained in Evergreen Recovery’s treatment programs. The defendants systematically overbilled Medicaid by charging for services that clients were coerced into attending as part of their housing arrangement, or for services that never actually occurred.
Their tactics didn’t stop there. They aggressively recruited Medicaid-eligible individuals from homeless shelters, probation offices, and drug treatment programs, exploiting some of the most vulnerable members of society. They ensured these clients understood that missing even one session could lead to eviction from the free housing, along with their belongings being thrown out.
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Forging Records to Inflate Billing
The investigation revealed additional fraudulent activities designed to boost the amounts billed to Medicaid. To cover their tracks, the accused created false health records, sometimes weeks or even months after the supposed dates of treatment. On at least one occasion, in preparation for a visit from licensing regulators, the defendants and their staff stayed up all night fabricating hundreds of health record entries to make it appear as though services had been provided.
The scheme also involved employing Peer Coaches, who were directed to falsify records about their interactions with clients. These misrepresentations were designed to ensure the defendants could claim more money from Medicaid by pretending that certain services had been provided under qualifying circumstances. These fake entries and misrepresentations allowed the group to systemically overbill Medicaid for group counseling, one-on-one counseling, and other treatment coordination services.
Facing Justice for Fraud and Money Laundering
The accused individuals are now facing serious charges. They have each been indicted for one count of conspiracy to commit wire fraud and nine counts of wire fraud. Additionally, one of the individuals faces three separate charges of money laundering. The charges stem from the alleged use of the fraudulently obtained funds for illegal financial transactions.
Two of the defendants made their first court appearance on December 19, 2024, and were released under conditions that included no contact with former clients or employees of Evergreen Recovery or its related organizations. The third defendant is expected to appear in court on December 23, 2024.
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The investigation that uncovered this widespread fraud was conducted by the Federal Bureau of Investigation (FBI) and the Health and Human Services – Office of Inspector General. Additional assistance came from the Medicaid Fraud Control Unit, a division of the Attorney General’s office, which helped untangle the web of deceit that led to the charges.
Protecting the Integrity of Medicaid
This case highlights the lengths some individuals will go to exploit programs designed to help vulnerable communities. Medicaid exists to support those in need of critical healthcare services, but the alleged fraudulent actions of the accused turned it into a tool for personal gain.
As the investigation continues and the legal process unfolds, it’s important to note that an indictment is not a conviction. All individuals charged are presumed innocent unless proven guilty beyond a reasonable doubt in a court of law. The U.S. Attorney’s Office is taking this case seriously and has entrusted an experienced prosecutor to handle it.
The government’s swift action in uncovering this scheme serves as a reminder that such abuse of taxpayer-funded programs will not go unchecked. This case has brought attention to the need for vigilance in protecting public health systems from exploitation and ensuring that healthcare funding truly benefits those it is meant to serve.
