Attorney General Keith Ellison released a statement after Evergreen Recovery leaders Shantel Magadanz and Heather Heim pleaded guilty to conspiracy to commit wire fraud following their participation in a years-long Medicaid fraud scheme. In December 2024, the US Attorney’s Office indicted Magadanz and Heim for fraud, along with another Evergreen leader who has not pled guilty, Shawn Grygo. Attorney General Ellison’s Medicaid Fraud Control Unit provided substantial assistance in the investigation leading to their indictment and continues to provide ongoing support and analysis in this case.
For years, Grygo, Heim, and Magadanz overbilled DHS and UCare for substance abuse treatment services they did not deliver. The overbilling scheme included adding client names to counselor logs after the fact, and other falsification of back-dated records. In addition to 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 and other false billing practices, Evergreen’s leaders are accused of stealing millions from Minnesota taxpayers. As laid out in Heim and Magadanz’ written plea Evergreen employees who raised concerns were either silenced, shut down, or lied to regarding the lawfulness of Evergreen’s practices.