PHOENIX – Arizona Health Care Cost Containment System (AHCCCS) was hit hard by the fraudulent activities of the sober living scheme, resulting in a loss of around $2.5 billion of taxpayers’ money.
At the beginning of the COVID-19 pandemic, individuals involved in the scandal began illegally charging for addiction treatment services that were hardly ever provided to those in need. The scandal gained momentum as a result.
Johnwick Nathan, a 30-year-old man, was sentenced for his involvement in the scam that resulted in his company making almost $21 million.
In the past year, Arizona Attorney General Kris Mayes has been responsible for the majority of the 73 indictments related to Medicaid fraud. However, the case at hand dates back to 2022 under the previous Attorney General, Mark Brnovich. It involves allegations of fraud, theft, and money laundering against an individual who claimed to be an entrepreneur.
The judge did not grant the state’s request for a four-year prison sentence.
Judge Tracey Westerhausen from the Maricopa County Superior Court has stated that on count three, she will be enforcing four years of probation and deferred jail time. This will commence on December 15.
Earlier this year, Nathan pleaded guilty to two counts, namely illegal control of an enterprise and solicitation to commit money laundering. As a result, he was sentenced to four years of probation for each count.
The concurrent running of the sentences will take place.
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According to the plea agreement, the judge had to decide between prison or probation. The judge did not have any other options available.
Nathan expressed his apology to the state and taxpayers prior to making the decision.
“I have come to realize that I am solely responsible for my actions and I take full ownership of them. Accepting responsibility and demonstrating character go hand in hand,” I reflect.
The Native American AHCCCS members he exploited did not receive an apology from him.
According to reports, Nathan proclaimed himself as an entrepreneur and even wrote a book on self-improvement to achieve success. However, during the pandemic, he was caught promoting a behavioral health scam.
Under the American Indian Health Program (AIHP), the provider who owned Harbor Health Integrated billed AHCCCS for services provided to his patients daily, amounting to 23 to 24 hours.
At least 10 AHCCCS members were not provided with services, as confirmed by the state. It is important to note that during that time, American Indian Health Program (AIHP) was under much less scrutiny.
According to court records, Nathan invoiced for only two diagnoses – “Alcohol dependence” for nearly 90 times and “major depressive disorder” for over 7,000 times.
For weeks and even months on end, Nathan consistently charged the state’s Medicaid agency for no less than 12 hours per day.
According to special agents, Nathan’s patients consisted entirely of Native Americans. The former CEO of Harbor Health revealed that Nathan’s primary motivation for treating these patients was monetary gain.
According to Aaron Baumann, an attorney for Arizona Health Care Cost Containment System, AHCCCS looked into social media posts revealing a lavish lifestyle featuring numerous high-end cars and luxurious properties.
On Nathan’s Instagram account, we can see him behind the wheel of multiple Ferraris.
According to the Arizona Attorney General’s office, Nathan was in charge of the Medicaid fraud operation from March 2020 to August 2021.
On June 21, 2024, Johnwick Nathan received a four-year probation sentence.
According to court records, he was found to have billed AHCCCS for an additional month on behalf of a discharged patient who had returned home to the Navajo Nation, earning $96,135.41.
According to records obtained by FOX 10 from AHCCCS, Harbor Health Integrated received a total reimbursement of approximately $20,859,694 for the treatment services provided.
The extent of the fraudulent activity remains uncertain.
In October 2021, AHCCCS suspended payments to Harbor Health due to credible fraud allegations.
According to Nathan’s lawyer, the defendant should have recognized from the outset that the sum of money offered was simply too good to be legitimate.
Nathan stated that he has learned to not let material possessions or the opinions of others influence his behavior or cloud his judgment and intentions. He emphasized that he has been able to maintain this mindset throughout his experiences.
The state will receive a sum of $2 million from Nathan as restitution, as per their agreement.
Statement from the Arizona Attorney General’s Office
“Our team’s success in securing another conviction in the ongoing AHCCCS fraud investigation is a source of pride for Attorney General Mayes.”