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Crime, Law and Justice
Matt Sepic

Three indicted for alleged Medicaid fraud linked to Twin Cities substance abuse treatment center

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A federal grand jury has indicted three Minnesota women on charges that they defrauded Medicaid by overbilling for substance abuse treatment services.

Through the Evergreen Recovery outpatient drug and alcohol treatment center, the three allegedly billed Medicaid for services that weren’t provided and that weren’t eligible for reimbursement.

Shawn Grygo of Forest Lake, Shantel Magadanz of Stacy, and Heather Heim of St. Paul are charged with wire fraud. Grygo also faces money laundering counts.

Prosecutors say the women recruited clients from homeless shelters and encampments and promised them free housing in exchange for attending counseling sessions. The defendants then allegedly billed Medicaid for those sessions while threatening the clients with eviction if they didn't attend.

Between 2018 and 2024, the indictment says, the defendants grew Evergreen’s client base from 30 to nearly 600.

The indictment says the women spent taxpayer funds on chartered jets, country club memberships, vehicles and luxury goods after billing Medicaid about $30 million over six years.

Magadanz and Heim each pleaded not guilty during their initial court appearances on Thursday. They were released on conditions including no contact with former clients or employees of Evergreen Recovery.

Grygo is set to make her first court appearance on Monday.