Former AZ Department of Health employee charged in Medicaid fraud indictment
PHOENIX - New court documents say eight suspects billed the state’s Medicaid agency for behavioral health services that were never provided, ultimately getting paid millions of dollars.
Laroie Davis, Wayman Westbrooks, Tamara Allen, Ryan and Geneice McNeal, Jayden Campbell, and Patrick and Kendra Legenzoff were all named in a 27-count indictment filed by Arizona AG Kris Mayes last month.
DHS confirmed that Laroie Davis worked for the state’s Department of Health until July of 2022, he has been released on his own recognizance.
Davis had his not guilty plea arraignment this week.
He was a health program manager for Arizona’s Department of Health from 2017 through July 2022, working at the Arizona State Hospital.
Several defendants are accused of charges including conspiracy, theft, fraudulent schemes, and money laundering.
"We have suspended payments to approximately 100 Medicaid providers based on credible allegations of fraud," said Carmen Heredia, CEO of the Arizona Health Care Cost Containment System (AHCCCS).
In May of 2023, new leadership took over the AHCCCS, cracking down on fraudulent behavioral health providers draining funds from the state.
According to this indictment, Davis and other defendants are accused of racketeering by using several businesses, including "A Path of Resilience," "Solutions of Sobriety," and "Helping Hands Realty" for their scheme.
Copy of the indictment:
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Court documents say Davis was the AHCCCS biller in the operation.
As for his alleged involvement in the scheme while working for DHS, a spokesperson said in a statement: "Since taking office, Governor Hobbs and the impacted state agencies have taken the Medicaid fraud and abuse extremely seriously and are committed to assisting in any and all investigations. Given there is an ongoing legal proceeding, we are unable to reply with greater detail."
They could not comment further.
From January 2020 to July 30th, 2022, AHCCCS paid Davis, McNeal, Allen, and Legenzoff nearly $55 million.
As Davis’s employment with the Department of Health ended, AHCCCS also suspended both "A Path of Resilience" and "Helping Hands" due to fraud allegations.
Court documents say the providers engaged in excessive "ghost billing" or billing for services never provided to patients and billing for dead patients.
A YouTube channel called "The Sober Investor" has a video featuring Patrick Legenzoff. He describes what he looks for in a potential sober living home.
He is also accused of bringing his juvenile son into the alleged scheme.
Court documents say he and the defendants targeted AHCCCS members using the American Indian Health Program. Legenzoff’s wife Kendra and son Jayden Campbell are charged with forgery, accused of copy and pasting patient notes from one to another.
Campbell was 16 at the time and listed as a behavioral health technician on these notes. State law says you have to be at least 18 to provide those services.
Investigators say Davis, Legenzoff, McNeal, and Allen owned 26 cars and 20 properties.
Court documents reveal that a seizure warrant executed at the defendants’ homes, authorities discovered luxury jewelry, watches, handbags, shoes and clothing including brands Rolex, Gucci, Louis Vuitton and Michael Kors.
So far, the Attorney General’s Office has seized $2.1 million from multiple bank accounts.