On a hot day in July 2022, a gray SUV pulled into the parking lot of a grocery store in the Navajo community of Shiprock, New Mexico. One of the three men talking outside the store was Marvin, a 47-year-old Navajo man from Utah.
“The driver and another guy asked us if we needed a place to stay,” Marvin told VOA, asking that his full name not be used. “They told us they ran a sober home. They said there was plenty of food in the refrigerator.”
Hours later, Marvin says he and his companions were locked inside a house 600 kilometers away in Phoenix, Arizona, victims of a growing scam that fuels addictions to defraud health care funds.
Sober homes are affordable alcohol and drug-free group homes designed to help recovering addicts transition from hospital rehabilitation programs to independent living in their communities. Thousands of licensed sober homes operate across the U.S., and studies have shown that they can help delay or prevent recovering addicts from relapsing.
Scam sober homes in Phoenix use Native Americans to enroll for healthcare benefits under the Arizona Health Care Cost Containment System, which partners with the federal Indian Health Service to pay for behavioral health services for members of federally recognized tribes. Fraudsters bill for benefits never delivered to at-risk Native Americans.
“They don’t get any treatment and are given drugs or alcohol to keep them dependent so they can stay in these so-called ‘programs’ longer,” said the organizer of a Phoenix neighborhood watch group who spoke with VOA and asked not to be identified for fear of retribution by gangs running the fraud.
Special Agent Antoinette Ferrari investigates financial crimes for the FBI’s Phoenix field office. She told VOA that hundreds of fraudulent sober homes have popped up across Phoenix in the past year alone.
“Medicaid and health care plans are a huge, multi-billion-dollar industry, and these fraudsters are costing taxpayers millions of dollars,” said Ferrari.
The FBI is asking victims to come forward, but agents stress that their investigation, for now, is focused on the fraudulent use of federal funds, not human trafficking or kidnapping.
A Phoenix, Arizona, resident provided VOA this video doorbell footage which shows a young man returning to a sober living home whose operators force him to sleep outside at night. Fraudsters bill the state Medicaid for services never delivered to at-risk Native Americans.
Law enforcement and community leaders say scam sober homes are skirting Phoenix regulations that facilities with six or more residents must register with the city and may not operate within 1,320 feet of any other group home. By keeping just five people to a house, they avoid registration and can rent adjoining properties.
“If the rule is no more than five residents, one operator could open up four group homes on the same street and get away with it,” said the neighborhood watch leader. “Nobody’s regulating them. They’re just popping up like cockroaches.”
Reva Stewart, Navajo, manages a Native American arts, crafts and music store across the street from Phoenix’s Indian Medical Center.
“Last summer, I started seeing these vans pulling up and taking Navajo relatives away,” she said. “Something didn’t seem right about it, so I started documenting it.”
Last October, she posted a video of a recruiter in action on Facebook. “And that’s when people started reaching out to me from all over Phoenix,” she said. “I had no idea the problem was this big.”
So Stewart teamed up with family services case worker Colleen Chatter, Navajo, to organize Advocates for Native Relatives to identify fraudulent group homes and help victims get back home.
Snacks, drinks and a bus ticket
In December, word of their work reached Marvin, who says scammers supplied him with drugs and alcohol to keep him rotating through six homes in five months. The first time he ran away, he says operators found him and threatened him into returning.
Last week, Marvin escaped through a back door, hopped a fence, and walked more than 40 kilometers through the night to Stewart’s store. She gave him snacks, drinks and a bus ticket to his mother’s home in Colorado, all from her own pocket.
“I’m tired,” he told VOA via Facebook video, shivering in the morning chill. “I really want to go back (home). This is just not me over here in Phoenix. Probably everybody’s wondering where I’m at again. I haven’t even been able to call home.”
Legislative moves
Neither the Phoenix Police Department, Navajo Nation police nor the office of the Arizona Attorney General responded to VOA’s requests for comment on fraudulent sober homes.
Arizona lawmakers have introduced several bills aimed at tightening regulations on group homes, including written discharge and transfer plans and quarterly updates on compliance with fire and zoning restrictions.
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