Attorney General Ellison praises indictment of Evergreen Recovery leaders for Medicaid fraud

US Attorney’s Office worked closely with AG Ellison’s Medicaid Fraud Control Unit to investigate, secure indictments

December 20, 2024 (SAINT PAUL) — Minnesota Attorney General Keith Ellison today praised the federal indictments of Shawn Grygo, Heather Heim, and Shantal Magadanz for wire fraud and money laundering.

“Fighting Medicaid fraud is a core function of my Office. I do not tolerate cheats and crooks who steal from taxpayers and rob people of the healthcare they deserve by defrauding Medicaid,” said Attorney General Ellison. “I commend United States Attorney Andy Luger and his team for securing these indictments and am grateful for the time, effort, and hard work they devoted to holding these bad actors accountable. I also extend my thanks and appreciation to the attorneys, investigators, and analysts with my office’s Medicaid Fraud Control Unit for the work they did to investigate this case to help secure these indictments. I’m proud of our long record of success in holding cheats and fraudsters accountable. We will not let up.”

Grygo, Heim, and Magadanz spent years overbilling DHS and UCare for substance abuse treatment services that Evergreen did not deliver. While overbilling, Evergreen also steered hundreds of clients to a sober housing provider, Second Chances Sober Living, which is controlled by one of Evergreen’s owners. Evergreen clients were offered free housing at Second Chances, but only if they agreed to attend a certain amount of programming at Evergreen Recovery, which Evergreen could bill Medicaid for, but which, in many cases, Evergreen did not actually provide. Through these illegal kickbacks, Evergreen’s leaders are accused of stealing millions from Minnesota taxpayers

Members of the Minnesota Attorney General’s Office’s Medicaid Fraud Control Unit assisted federal law enforcement, including the FBI and Department of Health and Human Services’ Office of Inspector General (DHHS/OIG), and the United States Attorney’s Office throughout the course of the investigation of Evergreen Recovery. Attorneys, analysts, and investigators with the Minnesota Attorney General’s Office participated in interviews with key figures in the investigation, helped execute the July 2024 search of Evergreen Recovery, analyzed data for and shared expertise with the United States Attorney’s Office, and conducted additional investigative activities.

Attorney General Ellison’s Medicaid Fraud Control Unit works to uncover, investigate, and prosecute individuals or organizations that steal from Medicaid. The Medicaid Fraud Control Unit receives 75% of its funding from the U.S. Department of Health and Human Services under a grant award totaling $4,409,872 for Federal fiscal year (FY) 2025. The remaining 25%, totaling $1,469,955 for FY 2025, is funded by the State of Minnesota. 

An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.