SCOTT SIMON, HOST:
We have now the story of a scam that targeted some of society's most vulnerable people. It was uncovered in Arizona, where dozens of operators are accused of setting up fake sober living homes as rehab facilities. Investigators say the scammers targeted people from Native tribes and defrauded taxpayers out of hundreds of millions of dollars. Alice Fordham with member station KUNM has this report.
ALICE FORDHAM, BYLINE: The heat is just breaking after a sweltering day in Phoenix. In Madison Park, unhoused people are clustered in the scant shade of a few trees. Along paths seeping heat, two women are rolling a cart full of cold water bottles, snacks and hygiene kits, giving them out to people living here.
UNIDENTIFIED PERSON #1: Awesome. Thank you. It's nice and cold (ph).
FORDHAM: Reva Stewart and Jeri Long, both from the Navajo Nation, have been doing this since they noticed more Native people sleeping out last year.
REVA STEWART: You guys doing OK?
FORDHAM: As they check in, they ask about places people have been staying and take notes...
UNIDENTIFIED PERSON #2: Somewhere in Mesa - it's 60...
STEWART: Do you mind if I record that?
FORDHAM: ...Because all of them have stories about residential facilities and clinics which promised them help getting sober. I sit on a bleacher and ask Wendell Smith what happened to him.
WENDELL SMITH: I wanted to get sober. At same time, I wanted to get back on my feet again, too. But they say they can help me with a job and help me with this and that. I never seen none of it.
FORDHAM: He was living on the White Mountain Apache Indian Reservation when some people offered to fly him to Phoenix to live in a sober home and get the services he wanted. But when he got there, people were drinking in the home, and the classes seemed sketchy.
SMITH: It's like the same curriculum over and over. Most of us just end up passing out in class.
FORDHAM: He's ended up on the streets and drinking again.
SMITH: I'm actually thinking about getting back in the program again. But, like, I want something that actually can help me.
FORDHAM: He can get back into a facility any time he likes. Men cruise around the park at night, offering people a few dollars to come join their treatment center, but everyone's skeptical of what's on offer. Across the street from this park is a little store selling Native arts, where Reva Stewart runs an activism operation out of a back room.
STEWART: What we do is help find our Native relatives that are, you know, subjected to these unregulated sober living homes.
FORDHAM: Stewart, the store manager, has been tracking a proliferation of sober living and rehab facilities that she says do much more harm than good. It started sometime last year. Across the street at the Phoenix Indian Medical Center, she started seeing white vans hanging around, their drivers talking to Native people at bus stops. So she asked someone.
STEWART: I said, can I ask you what that guy was asking you in that van? I said, I've been seeing him driving around. And he was like, yeah, he asked me if I needed a place to go, and he could give me a place to go.
FORDHAM: Then last year, a cousin of hers back on the Navajo Nation in New Mexico was approached by a similar van. She was struggling with alcoholism, and the driver offered her a drink and a place to go. When she sobered up, she was in Phoenix. And when she managed to contact her family, Stewart picked her up and heard she'd been taken to a place calling itself a sober home. Things fell into place.
STEWART: This is why there's white vans. This is what's going on. So once I started advocating for that and putting it out there - this is what's going on - more people started telling me what was going on.
FORDHAM: And many of the stories were tragic. A former patient, Raquel Moody, who is Hopi and White Mountain Apache, now works with Stewart. Her beloved cousin left the home they were in to get away from all the drinking there and died homeless shortly afterward.
RAQUEL MOODY: Sobriety was one thing that he really, really wanted. You know, he was a good guy. He was a funny guy, man. And, you know, when he has something serious he wants, you know, he'll get it out, you know? And it's what he wanted - was just to be sober.
FORDHAM: It took a while for stories of these homes to get wider attention. Some activists and officials say that's because the people involved are often transient and have substance abuse and mental health problems. But gradually, tribal leaders, then Native politicians, then law enforcement, including the FBI, began raising the alarm and investigating until the scale of the problem and its financial incentives became clear.
(SOUNDBITE OF PRESS CONFERENCE)
KATIE HOBBS: Today, we are announcing actions against over 100 providers of behavioral health, residential and outpatient treatment services that we have credible reason to believe have defrauded the state's Medicaid program of hundreds of millions of dollars.
FORDHAM: Arizona Governor Katie Hobbs led a press conference in May. She said residential homes and clinics billed the state's Medicaid agency's American Indian Health Program for treatments that weren't adequately provided, while mostly Native people were housed in places that often weren't safe or sober.
(SOUNDBITE OF PRESS CONFERENCE)
HOBBS: While we are still working to assess the scope of people affected, it may be in the thousands.
FORDHAM: So far, there have been 45 indictments by the Arizona attorney general's office, and more than 100 more facilities have been suspended. The FBI's investigation is ongoing in tandem with state and tribal authorities. The state Medicaid agency is conducting an audit. The ripples of the fraud spread to tribal lands across the country. Recruiters work as far away as Wyoming, Montana, South Dakota. On the Navajo Nation, which spans Arizona, Utah and New Mexico, officials declared a public health state of emergency and launched an operation called Rainbow Bridge. Navajo cops went down to Phoenix and helped hundreds of Navajo people get into real rehab or come home. But Navajo Nation Attorney General Ethel Branch says the aftermath of the fraud is long.
ETHEL BRANCH: You hear really sad stories about relatives who go into these homes with an alcohol addiction, and then they come out with a different kind of an addiction. Or they decease in the home based on other types of substance use.
FORDHAM: In the end, people who were in the homes, plus officials and folks who run legitimate facilities, agree this scam wouldn't have been so easy if there were more options for treatment on tribal lands. In a 2021 government survey, 29% of the Native population was found to need substance use treatment - higher than any other group - but only about 5% received any help. Navajo Nation President Buu Nygren says something has to change.
BUU NYGREN: And it just really breaks my heart. It really does break my heart. And one of my goals is to open up facilities near or on Navajo that can help our own people.
FORDHAM: He tells me he was recently in a meeting with other tribal leaders and asked about this.
NYGREN: How many of us have a detox center or a place where people can rehabilitate themselves? Not one of us raised their hand. And I said, you know what? What can we do to work together to build facilities that are geared toward helping our Indian people recover and heal?
FORDHAM: For NPR News, I'm Alice Fordham. Transcript provided by NPR, Copyright NPR.
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