Three Minnesotans have been charged with a Medicaid fraud conspiracy run through a treatment center in St. Paul, according to U.S. Attorney Andrew M. Luger. Luger’s office says Shawn Ashley Grygo, 37, of Forest Lake, Shantel Rene Magadanz, 34, of Stacy, and Heather Lynn Heim, 46, of St. Paul, planned and carried out a scheme to overbill for drug and alcohol treatment services between March 2018 and July 2024. They submitted invoices seeking reimbursement for more than $30 million from Medicaid and were reported to have spent the money on private jets, country club memberships, property, luxury vehicles and other personal spending. Charges stated that the three used Evergreen Recovery Inc., an outpatient drug and alcohol treatment center located on Energy Park Drive, to defraud Medicaid and other health care programs by billing for treatments that were not provided and services not eligible for reimbursement. They allegedly billed for treatment services clients were required to attend as a condition of remaining in free housing. The three are accused of offering free housing in Evergreen-controlled “sober” homes to draw clients to the treatment center, then used the clients’ names and information to overbill Medicaid expenses. They recruited people from homeless shelters and encampments, drug treatment programs and county probation offices, according to the indictment. By 2024 hundreds of clients lived in close to 40 sober houses throughout the Twin Cities, according to court records. Their client base started at 30 in 2018 and jumped to close to 600 clients by 2024, even though the treatment center was made aware that their group sizes violated state statutes. “Because each individual client represented potential revenue for as long as they were in the program, it was a part of the scheme to keep clients enrolled in Evergreen Recovery programming as long as possible,” the indictment alleges. Magadanz was the CEO of Evergreen Recovery and reported directly to Grygo, according to court records. The two oversaw operations of the treatment center and supervised other co-conspirators. According to the records, Magadanz was paid more than $600,000 in 2023 and was on track to receive over $1 million in 2024. “The defendants used fraud proceeds to pay themselves and others excessive salaries and for lavish personal spending,” the indictment alleges. From 2018 to 2024, Heim had multiple titles and was responsible for Evergreen Recovery’s billing to Medicaid and other healthcare programs, according to court records. She assisted the two others in developing and managing company practices. Grygo, Magadanz and Heim told clients at intake and throughout their stays that free housing was dependent on their attendance at five group counseling sessions per week, along with a weekly session with their primary counselor, according to records. Their practices also involved overbilling for group counseling, one-on-one counseling and treatment coordination services. Phone calls that were meant to last 31 minutes were billed for a full hour even when the calls lasted less than the time scheduled, according to records. “Peer Coaches” were hired and encouraged to log their time and activities in a way that misrepresented how clients were served in order to facilitate systematic overbilling, the indictment says. Notified of investigation Luger’s office says the three created electronic health record chart entries weeks or months after the alleged date of services. It’s stated that on at least one occasion, the accused stayed overnight at the office, creating hundreds of chart entries, before receiving a visit from licensing regulators. The accused were notified that Evergreen Recovery would be under investigation in 2024, yet continued to engage in fraudulent behavior, according to records. “By late June and into July of 2024, Grygo was unable to pay Evergreen Recovery staff wages and had stopped making rent payments on Evergreen Recovery’s facility,” the indictment alleges. Dozens of employees continued to work for free until operations stopped in late July, according to records. Grygo, Magadanz and Heim are each charged with one count of conspiracy to commit wire fraud and nine counts of wire fraud. Grygo is also being charged with three counts of money laundering. Magadanz and Heim made their initial appearances Thursday and were released on conditions, including prohibiting contact with former clients and employees of Evergreen Recovery and its related entities. Grygo is expected to make her initial appearance Monday. This case was investigated by the FBI and the Health and Human Services Office of Inspector General and is ongoing. Related Articles Crime & Public Safety | St. Paul officer found legally justified in shooting man who charged at him Crime & Public Safety | St. Paul youth shelter resident charged with attempted murder in hammer attack Crime & Public Safety | Family-owned St. Paul business hired CFO to replace retiree. Now, he’s accused of embezzling $187K. Crime & Public Safety | Official says Wisconsin shooter was new student at Christian school where her victims had deep ties Crime & Public Safety | North Branch man convicted in hit-and-run death of teen after Forest Lake brawl