Woman in Medicaid fraud case had previous conviction

A 36-year-old woman charged with defrauding Arizona's Medicaid system as part of multimillion-dollar schemes knew how to work the system, court records show.

She had been convicted in Nevada on similar charges a few years before.

Ariell Olivia Dix was charged in Maricopa County in late 2021 and earlier this year, accused in two separate cases of defrauding the Arizona Health Care Cost Containment System.

Between the two cases, Dix and other defendants billed the state's Medicaid system for more than $20 million in mental health and drug or alcohol rehabilitation services they never provided in the Southeast Valley and in central Phoenix, Arizona authorities alleged.

One case lays out an alleged scheme initially involving 12 other people and 14 different businesses, some of which were registered as AHCCCS providers. After they were charged, most of them were served seizure warrants to forfeit property, the value of which was estimated at $12 million.

The other case involves at least nine other defendants accused of defrauding AHCCCS of more than $10 million, court documents show.

These cases are linked to an investigation by the Arizona Attorney General's Office and other state agencies that uncovered people posing as behavioral health providers and using Indigenous people to bill hundreds of millions of dollars in false claims to AHCCCS for financial gain.

Hundreds of vulnerable Indigenous people, mainly from the Navajo Nation or from border towns such as Gallup, New Mexico, were aggressively recruited to the Phoenix area to fake rehab centers, never receiving the treatment they needed.

People were plucked off the street, with prosecutors describing the actions as kidnapping, according to court documents.

In contrast, some owners and associates of those centers were living lives of luxury, owning multiple cars such as Bentleys and Porsches or living in large, expensive mansions.

Arizona Attorney General Kris Mayes called the inability to prevent the years-long fraud a "stunning failure of government."

Dix did not own or operate a bogus behavioral health center in Arizona, but she is accused of helping others defraud AHCCCS like she did the Medicaid agency in Nevada. The operations in both states show parallels and overlapping connections.

Dix could not be reached for comment. John Blischak, her attorney for her Maricopa County cases, also declined to comment.

It was unknown whether Nevada authorities shared any information about Dix with Arizona officials.

AHCCCS' Office of Inspector General typically shares technical assistance and information with other states and other Medicaid programs, according to Heidi Capriotti, AHCCCS spokesperson. This collaboration occurs through national program integrity conferences and through the states' attorneys general offices about issues that might affect the integrity of Medicaid.

Capriotti said AHCCCS' Office of Inspector General has shared "the scope and nature of the specific behavioral health fraud schemes as they have played out in Arizona" with the federal Centers for Medicare and Medicaid Services, surrounding states and Medicaid programs nationwide.

Nevada: Convicted of failure to maintain records

In Nevada, Dix and another woman-owned and operated Lifetime Assistance LLC, a behavioral health outpatient treatment facility near Reno. It was supposed to provide services designed to reduce cognitive and behavioral health impairments to restore patients, according to court documents.

Those rehabilitative services for patients were required to be documented through detailed progress notes. Those notes were then to be used to substantiate claims billed to Medicaid — but Dix and her business partner failed to provide those documents.

Nevada's attorney general investigators initially found the two women billed for services not provided, just as in Arizona, court documents show. In their case, they were accused of saying certain "employees" provided the services when actually those individuals did not work for Lifetime or were not at the facility during the billing period.

They were accused of billing for services not provided by those "employees" between 2016 and mid-2018 and received more than $161,000 from the Medicaid agency, according to court records.

However, Dix and the other woman ultimately were convicted for failing to maintain adequate records to match claims that they submitted to Nevada Medicaid between the summer of 2017 and the beginning of 2018, according to a Nevada attorney general news release from 2020.

An investigation by the Medicaid Fraud Control Unit in Nevada found suspicious fee-for-service billing coming from their outpatient facility.

According to records released by the Nevada attorney general, the fraud squad determined that between July 1, 2017, and Sept. 30, 2017, and Oct. 1, 2017, and Dec. 31, 2017, Dix and the other woman intentionally failed to accurately document supposed basic skills training and other services provided, and to present legible records on who provided medication to patients.

Dix alone was accused of those same crimes in January 2018.

Investigators also found that the notes the two submitted to support their billing claims to Nevada Medicaid were actually for services paid for by another health agency in Nevada, state prosecutors said.

Dix was convicted on three counts of intentional failure to maintain adequate records, while the other woman was convicted on two.

Dix initially was charged with two counts of submitting false claims to Medicaid, a felony, and one count of intentional failure to maintain adequate records in June 2019, court documents show. In March 2020, Dix pled guilty to her Nevada charges and was handed her sentence in late June.

Dix was placed on 36 months of probation and was ordered to jointly pay a restitution of $363,350.42 to Nevada Medicaid. She was first sentenced to 364 days in jail, but the jail time was suspended.

The actions in Nevada appeared similar to what occurred later in Arizona, including billing patients for long hours of treatment per day, court records show.

Arizona: Accused of working behind scenes with bogus providers

After living in Nevada, Dix moved to Arizona, where, at one point, she lived in Chandler.

Dix's conviction in Nevada prohibited her from any attempt to become a licensed AHCCCS provider in Arizona.

Any felony or misdemeanor conviction related to delivery of an item or service under a health care program, any fraud, or any breach of fiduciary duty would have had to have been disclosed on the Arizona enrollment form, according to AHCCCS spokesperson Heidi Capriotti.

Dix worked behind the scenes, holding a manager-type role alongside other defendants who were accused of targeting and defrauding Indigenous patients and Arizona taxpayers.

Court documents accuse Dix of helping other defendants commit fraud in some of the ways she was accused while her criminal case in Nevada was moving through Washoe County courts.

One Arizona scheme initially included 27 defendants, a mix of people and businesses. Many of the people either owned, worked for or had made connections to the businesses operating as behavioral health or addiction treatment centers. Some cases have since been dismissed.

Dix worked for L&L Investments LLC in Gilbert, a property investment company in Arizona that is named a defendant in the scheme.

Part of her "managerial role" included finding new people and businesses to join the operation and circulating a "contract for business," according to court records. She also identified new patients, helped with billing and sent Medicaid reimbursement checks to participants as the checks came in, court records show.

Those businesses included in the contract were L&L; a licensed outpatient center with a facility in Mesa; a health care facility in Gilbert connected to one of the co-defendants; and a Wisconsin-based "non-profit" organization connected to a co-defendant.

The business agreement was vague and did not spell out how the accused defendants were planning to defraud Arizona's Medicaid agency.

Dix also provided some of the defendants with payment information, such as which bill codes to use and logins for the businesses that were AHCCCS providers, according to court documents. She had billing access to some of the providers because a co-defendant had given her two account logins for the outpatient center in Mesa.

She also served as an overall source of help and information. Court records show that in summer 2019, a co-defendant had texted Dix, "What's up...I need some clients...can you get some today also...if they are not Native American how do we bill for them."

However, Dix's ongoing Nevada case at the time almost became a problem, records show.

In October 2019, a co-defendant told Dix in a text that another of the accused schemers was showing their business partners that Dix was on the Nevada Medicaid sanction list, meaning she was excluded from the state's Medicaid program.

Dix said it was no problem. She texted the co-defendant back, saying she had not been convicted of, nor did she do, anything — she was working to get her name off the list, records show.

Business went on.

Dix would alert colleagues to their weekly revenue. One week in December 2019, she told one that his share for the week was $155,500.66 and that two other defendants received the same, according to court documents.

And Dix got paid her share of cash, too.

Between Jan. 1, 2019, and Jan. 2, 2020, L&L Investments received nearly $2.9 million from some of the fake rehab clinics, initial co-defendants, and Dix. Then L&L turned around and paid Dix in excess of $747,000, according to court documents.

Over the next eight months, L&L received more than $4.1 million from some of the same bogus clinics and others, court records show. L&L handed Dix more than $57,000. It is not known how much in total Dix received.

But a late 2020 seizure warrant shows that Dix was ordered to prepare a check in the balance amount of each of her three personal bank accounts. She, alongside many of the initial defendants and other associates in the AHCCCS case, was subject to forfeiting property valued at more than $12 million.

On Nov. 3, 2020, Dix sent out her personal to-do list to L&L, detailing various tasks she needed to complete that week, court records show. The list included tasks involving businesses in Illinois and Georgia. Tasks within Arizona included tracking clients for one of the faux centers, submitting budgets to another accused fraudster, and her own weekly schedule.

That schedule showed that Dix would be at various AHCCCS providers on different days of the week. She spent time at one in Tempe on Mondays, the Mesa facility on Tuesdays and co-defendant Gentle Touch Behavioral Health near uptown Phoenix on Wednesdays, court records show. On Thursdays and Fridays, she listed that she would be working on "out of town projects."

A couple of weeks after she sent that list, AHCCCS suspended payments to nearly a dozen providers involved in the scheme, pending investigations into credible allegations of fraud against them, according to AHCCCS public records.

Dix and her initial co-defendants of people and businesses were indicted in Maricopa County less than a year later. She faces charges of conspiracy, illegal control of an enterprise, theft, and fraudulent schemes and artifices.

2nd case alleges $10 million in billings but no services

Only minimal information about Dix's second criminal case in the county is publicly available.

Between May 1, 2020, and Sept. 17, 2021, an outpatient center east of midtown Phoenix was reimbursed more than $10 million for services for which it billed AHCCCS but never provided. AHCCCS suspended payments to that center in November 2021.

In this case, Dix faces charges of conspiracy, illegal control of an enterprise and fraudulent schemes and artifices.