Sober Living Crisis: Lawsuit filed against Arizona state agencies

PHOENIX - A civil lawsuit has been filed in connection to the sober living crisis and massive Medicaid fraud in Arizona.

This comes after the Arizona Health Care Cost Containment System (AHCCCS) was defrauded for an estimated $2 billion, thanks to a scheme preying on vulnerable people in need of substance abuse treatment. The state was billed for treatment that people never received.

BrewerWood law firm has filed complaints against AHCCCS and the Arizona Department of Health Services, claiming both agencies are culpable and legally at fault for the deaths of Carson Leslie and Fernando Largo. Managing Partner John Brewer says AHCCCS lacked oversight of billing by behavioral health providers, and that AZDHS awarded licenses to providers without requiring proof of liability insurance.

"We believe that it would have weeded out a lot more than 90% of these bad actors," said Brewer.

For over a year, we’ve reported on AHCCCS fraud, and how vulnerable people with addictions were preyed on by ‘bad actors’ opening pop-up sober living homes to house them for a profit.

"It doesn’t take a whole lot to figure out that when you have that kind of massive overbilling and fraud going, that crimes, deaths, rapes, all these things follow when there’s that amount of money at stake," said Dane Wood, managing partner at BrewerWood law firm.

Continuing Coverage: Sober Living Crisis

The Mesa Police report we obtained in 2023 states that 32-year-old Fernando Largo was  found dead inside a motel room after an overdose. Documents state the room was rented by a behavioral health provider.

The Medical Examiner determined Largo died due to combined effects of fentanyl, methamphetamine and alcohol. Largo was from Gallup, N.M., and was recruited to get help in Arizona. He went missing his mother reached out to Jeri Long.

"I remember when she first called me to look for him and we were looking for him, and then she sent me a text message saying ‘we found our son. Unfortunately, he’s not alive,’" said Long.

Long and Reva Stewart are part of an organization called ‘Stolen People, Stolen Benefits.’ With AHCCCS suspending payments to 300 behavioral health providers over allegations of Medicaid fraud, Long and Stewart routinely help those that are now left on the streets by those shut down sober living homes. They say the state needs to do more outside of the crackdown.

"I also think they need to realize and be held accountable and show their compassion about the humanitarian part of this, because there’s none," said Stewart.

BrewerWood also filed a suit on behalf of 44-year-old Carson Leslie, who was transported from Flagstaff to a group home in Phoenix.

Before he even got out of the car, Leslie died of chronic alcohol abuse. Per the medical examiner, Leslie’s toxicology report revealed his blood alcohol content was nearly seven times the legal limit.

Advocates say these lawsuits against the state are steps in the right direction for change.

"Nobody’s looking out for the Native Americans," said Brewer. "Nobody’s looking out for those people. All we hear about is fraud, fraud, fraud, and how do we get our money back? How’s the state shutting down these people? What’s happening to the true victims?"

"The parents of the deceased or the family members are all on the reservations or rural lands, so they don’t know what’s going on over here so they don’t have a voice," said Long. "We want them to say their names, because they matter."

We have learned that more cases are coming forward. We have reached out to both AHCCCS and AZDHS, but spokespersons for both agencies say they can’t comment on pending litigation.