Inside the sober living network accused of fraudulently billing Medicaid more than $50M
Ex-employee speaks about alleged Medicaid fraud
A former employee of a sober living network shares her experience working under a provider charged in a major fraud scheme set for trial in 2027. FOX 10 Investigative Reporter Justin Lum has the story.
A former employee of an alleged sober living home network is providing exclusive insight on FOX 10 Investigates.
Previous reporting detailed eight defendants charged in connection to tens of millions in Medicaid fraud two years ago. Now, obtained court records provide an inside look at the operation amid the fallout of a multibillion-dollar AHCCCS scandal.
The backstory:
The alleged fraud in this case happened between 2020 and 2022. Years later, eight accused defendants are waiting to stand trial, including a former Department of Health employee.
So how did this happen under the watch of DHS and AHCCCS?
'They're being betrayed'
A former employee of Solutions of Sobriety describes a network of nearly a dozen sober-living homes and a provider who billed the state for services the staff truly believed were legitimate. She is an insider who helped tribal members fight addiction, and she wants to remain anonymous.
"I can only imagine the trust that's been lost with the Native American community because those were my people. I talked to those patients. I was friends with them. Some of our staff were native, you know what I mean? And so, even just regaining the trust to be able to get treatment again. It's heartbreaking because those people are reaching out for help, and then they're being betrayed," the former employee said.
A YouTube channel called "The Sober Investor" shows several videos featuring Patrick Legenzoff as he describes what he looks for in a potential sober-living home. Legenzoff’s former employee says the job was perfect for her at the time.
"I was early in recovery, and I didn't want to go back to the same 9-5 job and I wanted to work helping people," the former employee said.
Court records show Legenzoff owned 11 homes across Arizona. The source who worked for him made $600 a week and lived in the homes as a manager.
In 2024, Legenzoff, his wife Kendra, son Jayden Campbell, as well as Laroie Davis, Wayman Westbrooks, Tamara Allen, and Ryan and Geneice McNeal were charged with conspiracy, illegal control of an enterprise, theft, fraudulent schemes, and money laundering, among other serious charges.
While investigators say Legenzoff handled the housing for clients, "A Path of Resilience," owned by Laroie Davis, handled the Medicaid billing. At one point, Davis was a health program manager for the state’s Department of Health and worked at the Arizona State Hospital. He was employed by DHS from 2016 to 2022, at the same time, he owned A Path of Resilience.
Dig deeper:
The attorney general's office says A Path of Resilience and Solutions of Sobriety conducted ghost billing for services never provided, overbilled and even billed for a dead patient.
The former employee who spoke with FOX 10 had no idea about the alleged billing fraud.
"They should have billed correctly. I think there should have been more oversight. I don't know how it got to this point where people are billing, and it got so far out of control that nobody saw that."
According to investigators, A Path of Resilience was used as the main biller for services. Obtained AHCCCS records show a major increase in billing by A Path of Resilience, scaling from six figures to eight figures in 2021, totaling $50 million in reimbursements between 2017 and 2022. But it's important to note prosecutors are focused on the last two years of alleged fraud.
"It was alarming to all staff to find out that no services were ever billed through Solutions of Sobriety," the former employee said.
RELATED REPORTS
- A look at the $5.5M Peoria mansion bought with alleged Medicaid fraud
- Arizona Medicaid: Two clinics, one owner. Why AHCCCS suspects them of billing fraud
- Arizona AG's office secured 188 sober living indictments; victims say charges don't bring justice
- AZ Medicaid agency bans clinic over alleged fraud using AI, recruitment bonuses
Luxury Items Seized:
Court documents reveal that a seizure warrant executed at defendants’ homes led to the discovery of luxury jewelry, watches, handbags, shoes, and clothes, including brands like Rolex, Gucci, and Louis Vuitton.
The former Solutions of Sobriety employee feels that treatment services were legit and helping those fighting addiction at the time. She is still wondering what led to criminal charges.
"Really a lot of people were pissed at Patrick because nobody had any idea and Patrick, nobody really saw very often," the former employee said.
In a recent September court hearing regarding the defense’s motion to send the case back to a grand jury to review probable cause, Legenzoff’s attorney says the prosecution misled jurors about services provided to clients.
"When you have a live witness who in response to a grand jury question, categorically says, ‘but they weren’t … they weren’t helping people.’ And that’s impactful," Hector Diaz, Patrick Legenzoff’s attorney, said.
A 'Betrayal':
The source feels deceived knowing she was paid $600 per week as she got sober, while AHCCCS paid out more than $50 million in two years.
"I felt very betrayed. Everybody was heartbroken."
What's next:
Attorneys representing all eight defendants were contacted for further comment. No response has been received. The trial is set for February 2027.
The Source: Information in this report was gathered from an anonymous former employee of Solutions of Sobriety; court records; the Arizona Attorney General's office; AHCCCS records.