Criminal charges, lawsuits expand Arizona sober living fraud case

More than 100 people, several companies and at least one church have been charged in an expanding state and federal crackdown on fraudulent sober living homes in Arizona that targeted Native Americans, according to reporting by ICT. Arizona officials allege the scheme involved false promises of addiction treatment and improper billing of Medicaid, with losses reaching into the billions of dollars. In May 2025, state authorities charged an additional 20 people accused of stealing $60 million, according to ICT.

Katie Hobbs and Kris Mayes have described the situation as a “humanitarian crisis” and a failure of government oversight, ICT reported. Victims and families have filed multiple lawsuits, including a class-action case alleging negligence and misconduct by the state. Officials say investigations remain ongoing in Arizona and other states, according to ICT.