Arizona Attorney General Kris Mayes announced 22 new indictments Tuesday in a massive Medicaid fraud scheme that cost taxpayers tens of millions and devastated vulnerable communities across the state. The case centers around fraudulent sober living homes, including Happy House Behavioral Health LLC and Hope of Life International Church.
The indictments allege that between August 31, 2022, and January 5, 2024, these organizations, along with numerous individuals, submitted false claims to Arizona’s Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS). Prosecutors say the fraud involved billing for services that were never provided, including to patients who were deceased, incarcerated, or hospitalized.
The fraudulent billing reportedly netted the defendants more than $60 million. The charges include 51 counts ranging from fraudulent schemes to excessive and incorrect medical billing. The schemes exploited the American Indian Health Program under AHCCCS, targeting a population already suffering from the effects of addiction and homelessness.
Ariell Olivia Dix, 37, was the first person convicted in connection to the case. In May 2024, she was sentenced to 3.5 years in prison and ordered to repay over $3.8 million. Dix operated fake treatment centers and admitted to illegal control of an enterprise.
Attorney General Mayes highlighted the impact of the fraud on 11 tribal nations and several nonprofit organizations. In response, her office has launched a $6 million Sober Living Home Support Program, offering grants to assist with housing, support services, and compensation for affected communities.
To prevent future abuse, Arizona lawmakers passed Senate Bill 1308, strengthening oversight of sober living homes. Governor Katie Hobbs signed the bill into law on April 18.
