by Ethan Faverino | May 25, 2026 | News
By Ethan Faverino |
The Republican Study Committee (RSC) held a fraud roundtable last week, led by Representative Brandon Gill (TX-26), calling for aggressive action and criminal prosecutions in response to a major Medicaid fraud scheme in Ohio uncovered by investigative reporting.
The event follows a Daily Wire investigation by reporter Luke Rosiak, which revealed how convicted felons and foreign nationals established 288 shell companies to fraudulently bill taxpayers for home health services that were never even provided.
The scheme defrauded Ohio’s Medicaid program of approximately $250 million. One single building in Columbus reportedly housed 94 fake companies that billed out $66 million.
Rosiak exposed the operation in about two months by analyzing publicly available data that state Medicaid officials had allegedly overlooked for four years.
Rep. Gill, who chairs the newly formed House Oversight Committee Task Force on Defending Constitutional Rights and Exposing Institutional Abuses, announced that the task force will launch a formal investigation equipped with subpoena power to pursue accountability and issue criminal referrals.
“Whenever you bring in infinity third worlders into American society from low trust countries, you kind of expect low trust behavior, and that’s what we’ve seen here,” stated Gill. “The American people want to know that their tax dollars are actually being used for the American people, not for foreigners, not for fraudsters. Our job is to stop it, to get the bad guys in jail by issuing criminal referrals.”
The roundtable aligns with broader Republican efforts to combat waste, fraud, and abuse in federal healthcare programs. These initiatives build upon the White House Fraud Task Force established by President Donald Trump and Vice President JD Vance, which has already deferred billions in Medicaid reimbursements from non-compliant states and imposed a hold on new hospice and home health care licenses until integrity requirements are met.
RSC Vice Chair Ben Cline (VA-06) emphasized the impact on legitimate beneficiaries: “Fraud is not a victimless crime. Fraudsters steal money from innocent people who are meant to benefit from these programs, Medicare, Medicaid, home health. One of the main weapons that we have is transparency.”
Additional remarks from members in attendance included:
- Rep. Michael Cloud (TX-27): “It’s unfortunate when people come to this country, have no intent in helping build this country, but are just simply here to defraud the American citizens who are here and working to build this country. The waste, fraud, and abuse is turned into a money laundering scheme for leftist organizations.”
- Rep. Laurel Lee (FL-15): “We are not providing federal funding for the purpose of subsidizing negligence, incompetence, or corruption. Every dollar that is stolen is $1 that is no longer available for vulnerable Americans who actually need these services.”
- Rep. Tim Burchett (TN-02): “We found over a trillion dollars in duplication and increased bureaucracy. Every time the Democrats holler and say, ‘Oh, you’re cutting this program,’ you’re damn right. We’re cutting the waste, abuse, and fraud.”
- Rep. Mike Kennedy (UT-03): “This criminal behavior is enriching filthy individuals who deserve to be in jail. If there are doctors on the tape, they should do the perp walk and go to jail. Their license should be taken and never returned.”
- Rep. Abe Hamadeh (AZ-08): “This is not just going to be hearings after hearings. It’s going to be arrests and prosecutions. We have to end this now. What we’re uncovering is criminals.”
Republicans characterized the Ohio Medicaid scam as a stark example of systemic vulnerabilities in federal healthcare programs that deflect critical resources away from the people who depend on these services.
The roundtable highlighted the GOP’s commitment to greater transparency, aggressive enforcement, and criminal prosecutions to protect taxpayer dollars and restore integrity to these programs.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Ethan Faverino | May 20, 2026 | News
By Ethan Faverino |
The U.S. Department of Justice has formed the West Coast Healthcare Fraud Strike Force, a new multi-district initiative targeting the significant rise in healthcare fraud across Arizona, California, and Nevada. The effort unites federal prosecutors with law enforcement partners to protect Arizona taxpayers, patients, and legitimate healthcare services from sophisticated fraud networks.
Assistant Attorney General Colin McDonald of the DOJ’s Fraud Division cited data showing sharp increases in fraud activity in the three states. “The Fraud Division is committed to bringing that same relentless, data-driven prosecutorial force to bear across every corner of this region,” said McDonald, “making unmistakably clear that no scheme is too sophisticated, no network too large or small, and no fraudster too distant to escape federal accountability.”
Arizona has been particularly hard-hit and is already on the front lines of enforcement. U.S. Attorney Timothy Courchaine for the District of Arizona noted that federal law enforcement and his office have already disrupted fraud schemes worth over a billion dollars of taxpayer money in the state. “Our mission as part of the West Coast Health Care Fraud Strike Force is to ensure Americans who need critical services are not used as pawns to make bad actors rich,” Courchaine stated. “Through excellent investigations, trial work, and seizures of ill-gotten gains, the District of Arizona will continue safeguarding those services.”
Arizona Attorney General Kris Mayes told The Center Square, “Arizona has been on the front lines of fighting Medicaid fraud for the past several years, and we welcome the federal government’s help in combatting this problem.” Mayes also highlighted that since 2023, her office has indicted 166 individuals and entities and recovered or seized more than $139 million in cash and assets.
Recent Arizona cases underscore the scale of the threat. In one scheme, Farrukh Jarar Ali, a 41 year old Pakistan-based operator, was charged with conspiracy to commit healthcare fraud and related offenses after allegedly submitting approximately $650 million in false and fraudulent claims to Arizona’s Medicaid program (AHCCCS) through at least 41 substance abuse treatment clinics.
Many patients were recruited from homeless populations or Native American reservations, and clinics often provided little or no legitimate care. AHCCCS paid out roughly $564 million before the scene was uncovered. Ali personally received about $24.5 million and used some proceeds to purchase luxury real estate in Dubai.
In another prosecution, Phoenix residents Alexandra Gehrke and her husband Jeffery King were sentenced to 15.5 years and 14 years in prison, for orchestrating a massive wound graft fraud scheme. Between November 2022 and May 2024, they and co-conspirators submitted over $1.2 billion in false or fraudulent claims to Medicare and other insurers for medically unnecessary bioengineered skin substitutes applied to elderly and terminally ill patients — often through illegal kickbacks and regardless of medical need.
Federal programs paid out nearly $615 million. Authorities seized substantial assets from the couple, including $97 million from bank accounts, luxury vehicles, life insurance annuities, cash, and gold and silver.
Mayes also referenced a prior $2.5 billion Medicaid fraud scheme involving fraudulent sober living homes targeting Native Americans, from which the state recovered only about 5% of losses. Her office has since launched a $6 million grant program to assist affected tribal nations.
The new Strike Force builds on these successes and addresses emerging threats identified by Scott Lampert, Acting Deputy Inspector General for Investigations at the U.S. Department of Health and Human Services. Lampert pointed to “sham operations designed to appear legitimate while exploiting patients and inflating claims through increasingly sophisticated methods.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Ethan Faverino | Mar 21, 2026 | News
By Ethan Faverino |
The Arizona Senate Health and Human Services Committee, chaired by Senator Carine Werner (R-LD4), convened a special oversight hearing earlier this week.
The hearing examined ongoing concerns within Arizona’s Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS), particularly why vulnerable patients—especially those seeking addiction and behavioral health treatment—are being turned away from care despite apparent facility capacity.
The session builds on months of prior testimony from families, treatment providers, and whistleblowers highlighting systemic barriers. Key issues included reimbursement failures that prevent providers serving patients through the American Indian Health Program (AIHP) from scheduling new care, network adequacy shortfalls, audit findings, and deficiencies in monitoring providers and safeguarding public funds.
“Arizona’s Medicaid program serves some of the most vulnerable people in our state, including individuals battling addiction and families seeking lifesaving treatment,” stated Senator Werner. “When patients are being turned away from care, or providers cannot get paid for services already delivered, that is a serious breakdown in the system. These issues did not happen overnight. They developed over many years, and it is the Legislature’s responsibility to conduct oversight, ask tough questions, and ensure the program is working the way taxpayers and patients expect it to.”
In response to findings from her investigation, Senator Werner has introduced a package of reform bills now under consideration in the Arizona House. These measures aim to enhance accountability, protect patients, combat fraud, and improve access to behavioral health services, with particular focus on the AIHP serving Arizona’s Native American communities.
The package of reform bills includes:
- SB 1114: Appropriates $1 million from the state general fund in FY 2026–2027 to the State Treasurer for distribution to the Maricopa County Attorney’s Office to support investigations and prosecutions of behavioral health patient brokering schemes, where vulnerable individuals are illegally trafficked between facilities for profit rather than receiving appropriate care.
- SB 1116: Requires that any denial of behavioral health treatment under the AIHP—based on medical necessity—be reviewed and approved by a qualified clinician with at least two years of relevant experience in similar services before a claim can be rejected.
- SB 1122: Limits excessive 100% prepayment reviews for behavioral health services under the AIHP, prohibiting such requirements beginning January 1, 2027, unless a provider is noncompliant with or disengaged from a corrective action plan, to reduce delays in patient care.
- SB 1173: Strengthens safety standards for behavioral health facilities by mandating, beginning January 1, 2027, that owners, operators, applicants, and licensees of specified facilities be U.S. citizens or lawful permanent residents and hold valid fingerprint clearance cards.
- SB 1233: Provides facilities with a 72-hour cure period to correct minor administrative deficiencies—those not impacting patient physical or psychological well-being—before state agencies can take disciplinary or enforcement action.
- SB 1611: Reforms AIHP administration by requiring AHCCCS, beginning October 1, 2027, to contract with a qualified administrative services organization for functions like program integrity, care management, provider support, quality improvement, data analytics, and claims payment. The bill preserves the fee-for-service option for eligible American Indian members, mandates tribal consultation, includes tribal observers in procurement, establishes an Office of Tribal Relations, and requires quarterly consultations to ensure quality care.
- SB 1814: Establishes the bipartisan Substance Use Disorder Treatment Standards and Oversight Study Committee, comprising legislative members, state officials, clinicians, physicians, and advocates. The committee will assess treatment availability, identify gaps in evidence-based care, review regulatory loopholes enabling fraud or substandard programs, recommend minimum clinical standards, safety requirements, and funding models, and submit a report with proposed changes by December 31, 2027.
“These reforms are about making sure the system works for the people it was designed to serve,” added Werner. “Taxpayers deserve accountability, providers deserve a system that functions properly, and most importantly, patients in crisis deserve timely access to treatment.”
The hearing featured invited testimony from AHCCCS leadership to address outstanding questions from prior sessions and to advance solutions.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Jason Bedrick | Mar 13, 2026 | Opinion
By Matthew Ladner & Jason Bedrick |
It is said that a lie travels halfway around the world before the truth can get its pants on. But when the truth finally catches up, it tends to arrive with receipts.
In recent weeks, anti-school-choice activists have accused Arizona’s popular Empowerment Scholarship Account (ESA) program of having a ludicrously high rate of misspending. That narrative, repeated endlessly despite being repeatedly debunked, has now collided with an inconvenient reality: the Arizona Department of Education’s own data tell a starkly different story, one that exposes the “unaccountable ESA” myth for what it always was: a misleading talking point masquerading as journalism.
On Thursday, the Arizona Department of Education published the results of a random audit of the ESA program, finding very low rates of misspending relative to other publicly funded programs and even less fraud. Less than 2% of ESA funds were spent on unallowed items, and 0.3% of the funds were spent on items considered “egregious” or fraudulent. The department is in the process of recouping those funds.
The department’s audit has punctured the gross distortions of Phoenix-based journalist Craig Harris of Channel 12, who had misrepresented the ESA program as being rife with fraud. The department called Harris’s claims “ridiculous,” “reckless,” and “a total misinterpretation of data provided by [the department] to Channel 12.”
Harris had claimed that 20% of ESA purchases represented misuse of funds based upon an examination of only a small portion of total ESA purchases—384,478 of the 1.8 million total ESA transactions since December 2024, approximately 20% of the total.
But it was not a random sample. The Arizona Department of Education had selected these purchases under a risk-based audit for additional scrutiny, so it was not a random sample that one could use to extrapolate rates of misuse in the ESA program. Instead, the risk-based pool was far more likely to contain misuse than the average purchase.
In other words, among the 20% of ESA purchases flagged for additional scrutiny, the department found 20% to be misspending. Harris, however, extrapolated the risk-based results on to the entire universe of ESA purchases. This represented a blatant distortion because the remaining purchases outside of the risk-based sample were far less likely to involve misspending.
Think of it this way: imagine that a reporter read a study showing that 20% of Americans were obese and that 20% of obese Americans had diabetes, then he ran a story claiming that 20% of all Americans had diabetes. Such a claim would be a complete distortion of the data, a conclusion that is entirely unsupported by the facts.
Harris was warned both publicly and privately that his “analysis” was deeply misleading. Nevertheless, he continued to repeat his “20% misuse” claim on television and social media.
The Arizona Department of Education decided to set the record straight by auditing a random sample of thousands of Arizona ESA purchases. The audit’s conclusion: “About 2% of purchases are unallowable expenses and only 0.3% represent fraud or egregious purchases.”
In short, Harris’s “analysis” on misspending was off by a factor of 10, and his accusations of fraud were off by nearly a factor of 100.
And although Harris made it seem like one in five ESA parents were buying diamond rings, the reality is that egregious purchases represented a vanishingly small percentage of ESA spending. Most of the unallowed items appear to have been innocent mistakes.
The Arizona Department of Education explained the difference between unallowable purchases and egregious purchases/fraud in a press release:
The submission of a purchase that is deemed unallowable does not constitute fraud. Most are innocent mistakes, such as an error in a form that must be resubmitted, or educational items that are not on the allowable list but that the user could have in good faith believed were permitted. Some examples would be backpacks, lunch boxes and water bottles.
A ridiculous figure of 20% fraud has been circulating concerning ESA purchases which resulted from a total misinterpretation of data that we provided to Channel 12.
Cracking down on misspending is important, but so is keeping things in perspective. The rate of improper payments for the Arizona ESA program, at 1.9%, stands far below a variety of programs which ESA opponents support, such as Medicaid (7.4%), food stamps (9.3%), and unemployment insurance (14.4%). Moreover, the Arizona Department of Education actively recovers misspending, and refers serious cases for criminal prosecution to punish criminal activity and to deter fraud.
Indeed, the only reason we know about the miniscule level of unallowed purchases in the ESA program is because it is so transparent—far more transparent than district schools, which do not report transaction-level data to state officials, let alone the public. Given the rash of recent scandals in Arizona’s district school system, one can only imagine what we would find if given access to information about every purchase that district schools have made, as we have for the ESA program.
In the interests of transparency and accountability, state lawmakers should require the district schools provide the same level of information about purchases as ESA families.
Harris has not yet retracted his false reporting. Instead, he has doubled down on his errors, erroneously claiming that the department’s audit was “largely skewed” and based on “a miniscule sample.” This claim is particularly ironic given that Harris erroneously treated a risk-based sample—which is inherently skewed—as though it was representative of the entire population. A random sample, by contrast, is representative of the whole.
Facts are stubborn things. So too, apparently, are anti-school-choice activists who can’t let go of the false narrative they pushed in the face of overwhelming evidence to the contrary.
Matthew Ladner is a Senior Advisor for education policy implementation and Jason Bedrick is a Senior Research Fellow at the Heritage Foundation’s Center for Education Policy.
by Ethan Faverino | Mar 6, 2026 | News
By Ethan Faverino |
In response to recent controversies surrounding state contract awards under Governor Katie Hobbs’ administration, the Arizona Senate has approved legislation to strengthen oversight, prevent potential political favoritism, and protect taxpayer funds.
SB 1186 introduces mandatory disclosure requirements for companies applying for state contracts via Requests for Proposals (RFPs) or seeking certain state grants.
Under the bill, applicants must report any “thing of value” provided within the preceding five years. This includes anything given—directly or indirectly—by the company, its officers, directors, or their family members to the Governor; entities controlled by the Governor (such as campaign committees, joint fundraising committees, or inaugural funds); or organizations advocating for the Governor’s election or opposing their opponents, including political committees or nonprofits that make independent expenditures.
These disclosure obligations extend to companies currently holding state contracts, promoting ongoing transparency during the term of taxpayer-funded agreements. The bill also amends procurement record retention rules by prohibiting the destruction of notes taken during RFP evaluations. If such notes are destroyed in violation of the provision, related contracts awarded after the effective date may be resolicited.
The legislation addresses documented concerns from high-profile cases, including the Sunshine Residential Homes controversy—where the group home operator received a significant rate increase from the Department of Child Safety following substantial political donations tied to Governor Hobbs—and issues with a multibillion-dollar Arizona Health Care Cost Containment System (AHCCCS) Medicaid contract award.
In the latter, an administrative law judge highlighted serious flaws in proposal evaluation, scoring, fairness, and record-keeping, prompting questions about the integrity of the state’s procurement practices.
“What we have seen under the Hobbs administration exposed serious weaknesses in how state contracts are awarded and monitored,” stated bill sponsor President Pro Tempore T.J. Shope (R-LD16). “When billions of taxpayer dollars are involved, transparency cannot come after the fact. The public deserves to know who is seeking state contracts, what relationships exist, and whether decisions are being made fairly before money goes out the door. This legislation closes those gaps by requiring disclosures upfront, preserving critical records, and creating clear accountability standards so Arizonans can have confidence that contracts are awarded based on merit, not political connections.”
Supporters argue that SB 1186 modernizes oversight by focusing on pre-award transparency, in contrast to post-award reporting proposals. The bill amends Title 41 of the A.R.S., adding sections on disclosures for contracts and grants while strengthening record retention in procurement.
The measure now heads to the Arizona House for further consideration.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
