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'Frankly, this is organized crime' | Valley cities struggle with fraudulent sober living homes

The homes and treatment centers are taking advantage of Native Americans and others suffering from addiction all for millions of taxpayer dollars

MESA, Ariz. — The Arizona attorney general has called it one of the biggest scandals in state history.

Shady sober living homes and fraudulent treatment centers taking advantage of Native Americans and others suffering from addiction all for millions of taxpayer dollars without ever providing the care that was promised.

It's been reported in several states and all over the Valley. 

"Frankly, this is organized crime," said Mesa Mayor John Giles.

The mayor and city council discussed the issue during a city work session on Monday. Giles said they started receiving calls from concerned citizens about a year ago who believe they were witnessing this fraudulent activity happening right next door to them.

"A lot of criminal activity, a lot of nuisance," Giles said. "It's just been a real high maintenance situation for our police department."

There have been situations in Mesa, Giles said where these treatment centers have purchased dozens of units in townhouses and then move people in to provide them with services that never actually happen.

Trying to locate these facilities without neighbors reporting it to police is difficult, Giles said. Since many are unlicensed or classified by the state department of health as sober living homes, Giles said the city doesn't know how many there are in Mesa.

"It's a case of Whac-a-Mole, as soon as you discover one they'll just pick the operation up and move it to a different neighborhood or a different city," the mayor said.

When it comes to enforcement, Giles said there is very little city police can do except for homes that violate city code.

"We don't have licensing authority over sober living homes," Giles said. "That's what the state of Arizona with the Department of Health Services, where it should be."

Hundreds of providers currently have their payments through the Arizona Healthcare Cost Containment System suspended for suspected fraud. It has led to multiple protests from these suspended providers claiming they either did not commit fraud or did not mean to. The protests also call for state officials to step in to resolve the issues.

“It's difficult to do something meaningful, you know, that's going to have an impact on this organized crime route or organized crime enterprise, and not have that splash over onto some legitimate providers,” Giles said.

Giles encourages Mesa residents to be vigilant and report any activity that could be tied to unlicensed sober living homes. In the meantime, Giles said a better solution to the problem will have to come from the state legislature. The mayor said Mesa is currently speaking with other cities and agencies in the Valley to come up with potential answers to address the issue.

"We think state law can be improved to empower the Department of Health Services to be to respond in a better way and a quicker way that that's going to help right the ship and hopefully get rid of these bad actors that are defrauding the government of many millions of dollars," he said.

The City of Tempe is also announced recently plans to go after these fraudulent facilities. On the City's website it discusses creating an internal task force to identify these types of treatment centers. 

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