The FBI is investigating scams by fake rehab groups that target the Indigenous community, offering substance-abuse recovery or mental-health services at pop-up facilities to rake in government money, FBI officials say.
Bogus organizers defraud the government out of money meant to help people at their most vulnerable, Phoenix FBI Agent Kevin Smith said. The fraud starts when scammers scout potential victims by going to places as varied as flea markets and medical centers – even to Navajo Nation lands. They then offer to take people to a facility for help. Instead, people are taken to short-term rental, “sober living,” homes in the Phoenix area. But they do not receive the help that is promised.
Smith, by email, said he is unsure of the total number of cases, adding that the investigation is ongoing.
The FBI said in a statement that people may be intoxicated or “offered alcohol” on the drive to home. “Later, they have no idea where they are or how they got there,” the statement said. “The individuals then have difficulty finding a way home. The circumstances have led to a number of missing persons reports being received by local law enforcement agencies.”
The situation, first reported in The Arizona Republic, has led to Native Americans reaching out to tribal leadership, according to its website, azcentral.com.
The targets are told to sign paperwork to take advantage of the Arizona Health Care Cost Containment System, the state’s Medicaid agency for low-income residents. Under AHCCCS’s American Indian Health Program, healthcare providers can receive funding, including coverage for behavioral healthcare services, the FBI said.
The FBI statement says “organizers allegedly tell the tenants that they have to change their identification cards (driver’s license, etc.) to Arizona to obtain Arizona Medicaid benefits.”
Special Agent Antoinette Ferrari said the fraud is a federal crime against members of Indigenous communities. “They are being taken off reservations and exploited,” Ferrari said.
Ferrari also said state health officials should be diligent when they review documents for funding, to better detect possible fraud. AHCCCS officials did not return requests for comment.
Smith said that the fraud happened intermittently in 2020 and picked up again in 2022, but it’s unclear how organized it really is. Smith didn’t characterize the number of cases.
According to 12 News, the Navajo Police Department also has been investigating the situation, looking into at least 60 cases in Tuba City as of December.
“From our perspective, this is happening because people are greedy,” Smith said. The FBI asks alleged victims to contact the agency for help.