'A National Leader': Mayes's Office Has Recovered 5 Cents on the Dollar From Arizona's Sober Living Fraud

In May 2023, Arizona admitted what tribal advocates had been warning about for years: hundreds of sham sober living homes and behavioral health clinics had been billing the state's Medicaid program for treatment that never happened, and they were doing it by recruiting Native Americans off reservations and out of their lives. The scheme began around 2019. The state now puts the damage at an estimated $2.8 billion.

On May 14, Attorney General Kris Mayes marked the third anniversary with a victory lap. "Arizona is a national leader in combating Medicaid fraud because we made it a priority," she told reporters, KJZZ reported.

Her office says it has recovered about $140 million. Against $2.8 billion, that is roughly five cents on the dollar.

And the people the scheme was built on have seen far less.

Mayes first cited the $140 million in May 2025. She repeated it in June 2026, when her office announced 42 more indictments and said about 280 people had been charged since 2024, KNAU reported.

In May, ABC15 reported 140 people and businesses indicted and 41 convictions. In August, the AG's office told FOX 10 it had secured 188 indictments since 2021. Three outlets, three numbers, one office.

The $140 million itself is now contested. At a press conference in early October, attorneys John Brewer and Dane Wood of BrewerWood, who represent about 7,000 people, many of them Native American, in a class action against the state, argued the figure is inflated because some court-ordered fines were never paid. AG spokesperson Richie Taylor told KJZZ the $140 million is cash seized across multiple investigations, not restitution or fines. He also acknowledged that some fines are unpaid and said the related plea deals will be reversed.

When the state cut off payments in 2023, the homes emptied. A Navajo Nation official told the Arizona Mirror the tribe understood it could see 5,000 to 7,000 Indigenous people displaced onto Valley streets. Navajo Nation police spent 18 days in Phoenix that spring and made contact with 271 of them. AHCCCS opened a 2-1-1 hotline offering rides, rooms and care. The state has never published how many people it housed or sent home.

Some never made it home. The Arizona Center for Investigative Reporting and ProPublica found at least 40 Native American residents of Phoenix-area sober living homes and treatment facilities died between spring 2022 and summer 2024, more than half of them after officials had been warned. AHCCCS has never publicly counted the deaths tied to the scheme.

In February 2025, FOX 10 found people displaced by the closures still homeless, cycling through new homes. "It's just a revolving door at this point," the outreach team of Navajo advocate Reva Stewart told the station.

FOX 10 put the gap plainly in August: of 188 indictments, the AG's office confirmed, not one charges a crime against a person. No trafficking. No negligent homicide. No vulnerable adult abuse. One mother alleges in the class action that a home manager gave her daughter fentanyl; the daughter now needs constant care. "An LLC can't go to jail," Brewer said.

The state's direct answer to victims was a $6 million grant program for 11 tribal nations and nonprofits. BrewerWood has accused one $500,000 recipient of ties to fraudsters; the recipient denies it, and Taylor called it "baseless."

Mayes says billing under the abused behavioral health code is down 92 percent. Gov. Katie Hobbs, rolling out AI claims screening in May, put it this way: "Under my watch, Arizona has become a national leader in cracking down and preventing Medicaid fraud."

The record says otherwise. AZCIR's Jasmine Demers reported in February that fraud investigations fell from about 1,400 at the 2023 peak to about 270 by August 2025. At a Senate committee hearing, a senior AHCCCS official acknowledged the state is still being billed for fraudulent services and that recruitment continues. In May, Navajo business owner and advocate Reva Stewart was blunter, telling ABC15: "It's still happening."

Mayes has the strongest record of anyone in this story. She inherited a fraud that ran for years under her predecessors, and her office is the one that exposed it and has kept filing cases. Her Medicaid Fraud Control Unit was the only one in the country honored by the federal Health and Human Services inspector general for 2025. Her office says charges for crimes against people have not been brought because the evidence did not support them. The $140 million also does not count court-ordered restitution, such as the $30.2 million a Maricopa County judge ordered L & L Investments to repay AHCCCS after a jury convicted the company, or the $25 million clinic owner James Demasi agreed to repay after pleading guilty.

Her loudest critic, Sen. Carine Werner, R-Scottsdale, says whistleblowers have evidence of ongoing fraud and accuses Mayes's office of not doing enough to go after bad actors. Werner has pushed SB 1611 to hand day-to-day administration of the American Indian Health Program to an outside contractor. Mayes's reply in May: "She is a liar, and she is a dumb one at that." Mayes is on the ballot this fall.

For the Attorney General's Office: How much of the $140 million has actually been paid to victims or returned to AHCCCS? How much restitution has been ordered, and how much collected? Which count of defendants is correct: 140, 188 or 280? How many plea deals will be reversed over unpaid fines?

For AHCCCS: How many displaced members did the 2-1-1 line house, transport or return home? How many deaths are tied to the scheme? How much fraudulent billing has been paid since 2023?

For Gov. Katie Hobbs: Your staff told ABC15 that massive fraud is not occurring. What is that based on, when AHCCCS told lawmakers fraudulent billing and recruitment continue?

For Sen. Carine Werner: What is the whistleblower evidence of ongoing fraud, and has it been given to prosecutors? What happened to SB 1611?

Five cents came back. The rest, and the people, are still missing from the ledger.

Built from public records and reporting through Oct. 20, 2026, including KJZZ, KNAU, FOX 10, ABC15, the Arizona Mirror and the Arizona Center for Investigative Reporting. Recovery and defendant figures come from the Attorney General's public statements and have not been independently audited; we could not confirm the final status of SB 1611. We are looking for AHCCCS placement and hotline records, restitution collection data, and anyone who was displaced from a sober living home or worked inside one. The Attorney General's Office, AHCCCS, Gov. Katie Hobbs' office and Sen. Carine Werner were asked for comment; responses will be added with a dated update. Tips: [email protected]. Corrections: [email protected].