NewsCrime Watch


Montana authorities warn of massive Medicaid fraud targeting Native Americans

Posted at 1:14 PM, Jul 21, 2023

BILLINGS - The Blackfeet Nation is planning to declare a public health state of emergency after learning several tribal members may have been victimized in a massive Medicaid fraud scheme in Arizona.

The Arizona Attorney General is calling it one of the biggest scandals in the state's history, claiming the financial impact may stretch into the hundreds of millions of dollars.

The scam left countless Native Americans homeless on the streets of Phoenix.

Missing person posters now litter the city, and some of those missing are from Montana and members of the Blackfeet and Crow tribes.

According to Arizona state officials, unlicensed sober living homes lured hundreds of Native Americans to the state where they were provided free housing with a promise of recovery.

Those fake providers then allegedly billed patients for services not provided while collecting millions in Medicaid payments from the state.

One of the possible victims is Josh Racine, a Blackfeet tribal member who went missing after a non-licensed home he was at was suddenly shut down.

Racine ended up homeless and missing for about a month until his family was able to drive to Phoenix and find him and bring him home to Montana.

According to a Phoenix-based grassroots organization called "Stolen Persons, Stolen Benefits," it has helped locate at least 40 tribal members from the Blackfeet and Crow reservations and return them home to Montana, and the group says there are likely hundreds more from Montana who were victimized.

The Navajo Nation also recently issued a public health state of emergency to get their people safely home.

U.S. Sen. Jon Tester is calling on the Centers of Medicare and Medicaid Services to investigate the alleged Arizona fraud targeting Montana tribal nations.

Tester said in a letter to federal officials:

"Arizona state officials have alleged a widespread Medicaid scam. I am especially alarmed by the recent development that these fraudulent activities have reached tribal members in Montana who are seeking treatment. By offering promises of treatment in exchange for changing their residency to Arizona, these fraudulent centers have reportedly recruited Montanans and left them without care and stranded in Arizona.

I’m deeply concerned about the recent reports of tribal members in Montana being targeted by an ongoing Medicaid fraud scheme, that’s why I’m calling on the Centers for Medicare and Medicaid Services to immediately investigate this matter and provide a detailed report of their findings."

The letter goes on to say:

"While it is unacceptable the Arizona state Medicaid program allowed this fraud to plague Arizona's tribal communities for so long that it spread to other states, the Centers for Medicare and Medicaid Services (CMS) also failed to identify this fraudulent waste of taxpayer dollars in the agency's oversight capacity. State Medicaid programs and (CMS) share responsibility for ensuring that Medicaid is used to deliver health care services and not misused for fraud, waste, or abuse and it's clear that responsibility was not taken seriously. Given the astounding negligence and its impact on vulnerable communities, I ask cms to immediately investigate this matter further. Any tribal member who is victimized by this scam must receive immediate assistance and I'll keep pressing to make sure the perpetrators are held accountable for this disgusting abuse of the taxpayer dollar."

Tester says he is urging the agency to place a high priority on assisting the victims, particularly Montana's tribal members who have been left stranded in Arizona with no means to return home.

"It is of the utmost importance that these tribal members are able to regain their safety and security, and return home so they can receive proper treatment," Tester said in the letter.

He also asks the agency to facilitate necessary resources to warn tribes nationwide about this scam.

The rest of Montana’s Congressional delegation is also weighing in, with Rep. Ryan Zinke stating:

“Criminals who prey on the most vulnerable amongst us deserve no quarter and anyone who defrauds the American people must be prosecuted to the fullest extent of the law. Montanans from the first congressional district who find themselves in this terrible situation should contact Zinke’s office at (406) 317-0277 and one of our constituent services representatives can assist them with filing claims with the federal government.

U.S. Sen. Steve Daines sits on the Indian Affairs Committee. His office issued this statement:

"The senator is aware of this issue and will be keeping a close eye on it. He encourages all Montanans to be vigilant and look for signs of fraudulent behavior.”

Daines' office added this case would likely be referred to the Commerce or Finance committees if there is action, however last year Daines’ Protecting Indian Tribes from Scams Act was signed into law which requires the Federal Trade Commission to increase awareness, reporting and resources for tribes in order to combat these types of scams. The FTC is currently working on implementing that bill.

MTN News has not heard back from Rep. Matt Rosendale.

Gov. Greg Gianforte's office issued this statement:

"Our office is in touch with tribal leaders on these disturbing reports."

The governor's office provided this background information as well.

Background: Expanding access to treatment and recovery services here at home for Montanans struggling with addiction remains one of the governor’s top priorities. In his first week in office, the governor introduced the HEART Fund, investing $25 million per year to provide for a full continuum of behavioral health and substance use disorder treatment programs for communities. The governor also created the Angel Initiative, a collaborative effort among Governor Gianforte, DPHHS, participating law enforcement entities, and treatment providers allowing someone who is struggling with addiction and substance use to go into any participating law enforcement office and receive assistance to connected with treatment. A list of participating counties may be found at

Meanwhile, Montana Attorney General Austin Knudsen’s office issued this statement:

"Since the providers were operating in Arizona and allegedly defrauding the Arizona Medicaid program, the Arizona Attorney General’s office has a role in the investigation and prosecution. Because the Montana Medicaid program was not billed to our knowledge, there is no role for the Montana Medicaid fraud control unit at this time."

MTN News asked the Montana Department of Justice about human trafficking. The office says the state does not have jurisdiction over crimes that occur on reservations, and this situation does not meet the statutory definition of human trafficking as it would need to involve involuntary servitude or sexual servitude.

The Attorney General’s Office noted Knudsen did support a resolution passed by legislature calling on Congress to fully fund law enforcement in Indian Country.

When asked whether this qualifies as a hate crime as Native Americans are being targeted, the office said there is only a hate crime enhancement in Montana for a crime committed in the state, and unless the Department of Justice is requested by another agency to help investigate or prosecute a crime the Montana AG’s office is not involved.

The legal definition is this:

45-5-703. involuntary servitude. (1) a person commits the offense of involuntary servitude if the person purposely or knowingly uses coercion to compel another person to provide labor or services, unless the conduct is otherwise permissible under federal or state law.

45-5-704. sexual servitude. (1) a person commits the offense of sexual servitude if the person purposely or knowingly:
(a) uses fraud, coercion, or deception to compel an adult to engage in commercial sexual activity; or
(b) recruits, transports, transfers, harbors, receives, provides, obtains by any means, isolates, entices, maintains, or makes available a child for the purpose of commercial sexual activity.45-5-702. trafficking of persons. (1) a person commits the offense of trafficking of persons if the person purposely or knowingly:(a) recruits, transports, transfers, harbors, receives, provides, obtains, isolates, maintains, or entices another person intending or knowing that the person will be subjected to involuntary servitude or sexual servitude; or(b) benefits, financially or by receiving anything of value, from facilitating any conduct described in subsection (1)(a) or from participation in a venture that has subjected another person to involuntary servitude or sexual servitude.

Reva Stewart with grassroots effort Stolen People, Stolen Benefits, has an Amazon with list under Reva J Stewart for those wanting to help provide water and hygiene kits to tribal members on the street who are in 100+ temperatures in Phoenix. Stolen People, Stolen Benefits also has a GoFundMe page to help support plane and bus tickets to get people home.