Two leaders of a now-shuttered St. Paul addiction treatment center have admitted their roles in a multiyear Medicaid fraud scheme that netted millions of taxpayer dollars.
Heather Lynn Heim, former chief executive officer at Evergreen Recovery Inc., and Shantel Rene Magadanz, the one-time chief financial officer, pleaded guilty Tuesday in U.S. District Court in Minneapolis to one count of conspiracy to commit wire fraud.
A grand jury in December indicted Heim, 47, of St. Paul, Magadanz, 35, of Stacy, and Evergreen owner and operator Shawn Grygo, 37, of Forest Lake.
Prosecutors say the trio used the outpatient drug and alcohol treatment center along Energy Park Drive to overbill DHS and UCare for services that were not provided. The overbilling scheme included adding client names to counselor logs after the fact, and other falsification of back-dated records.
Evergreen also allegedly billed for treatment services clients were required to attend as a condition of remaining in free housing.
Evergreen employees who raised concerns were either silenced, shut down or lied to regarding the lawfulness of Evergreen’s practices, prosecutors say.
Heim and Magadanz were each associated with at least $5.6 million in fraud loss, according to plea agreement documents. They face between 21 and 27 months in prison at their sentencings, which have not been scheduled.
Grygo has pleaded not guilty to wire fraud and money laundering. A trial date has not been set.
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