20 people, including an Arizona pastor, indicted in massive sober living home fraud case

USA Today

22-05-2025

20 people, including an Arizona pastor, indicted in massive sober living home fraud case
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Sens. Mark Kelly and Ruben Gallego speak during a town hall about Medicaid cuts at the NOAH Cholla Health Center in Scottsdale on March 17, 2025.
PHOENIX — The Arizona Attorney General's Office announced the indictment of 20 people, including a church pastor, accused of submitting false medical claims to the state's Medicaid program for more than $60 million in a little less than one year.
The indictments were the latest in a string of cases alleging rampant fraud against the Arizona Health Care Cost Containment System, most of which involved alcohol and drug rehabilitation services that were never rendered. Arizona Attorney General Kris Mayes held a news conference in May 2023, a few months after taking office, to announce the widespread fraud, which she called a "stunning failure of government."
The cost to taxpayers is as much as $2.5 billion.
Since then, more than 100 individuals and companies have faced charges in 14 cases, the office told The Arizona Republic, part of the USA TODAY Network, in April. The scheme largely involved patients enrolled in the American Indian Health Plan, designed to serve Native Americans who may live in remote areas miles from doctors and clinics. It was intentionally crafted to have little oversight and scrutiny that might delay care.
Authorities said fraudsters exploited those loopholes, flooding the system with fraudulent claims for hundreds of hours of rehabilitation services that were never provided. Patients, if they existed at all, were sometimes plied with alcohol and drugs to keep them living in care homes to keep the scheme going, authorities said.
This latest case named 17 individuals and two entities, one of which is a church. The grand jury charged three others, but their identities were not released in the indictment.
Most of the people named in the indictment had arraignments on May 20. Additional arraignments were scheduled for May 21 and May 27.
Indictment: Fraudulent claims submitted were for dead, jailed people
The indictment named two men as the ringleaders of the overarching conspiracy: Desire Rusingizwa and Fabrice Mvuyekure, along with a business the two started called Happy House Behavioral Health. The scheme began in August 2022 and lasted through January 2024, the indictment said.
As part of that scheme, Rusingizwa and Mvuyekure submitted more than $60 million in fraudulent claims to AHCCCS through Happy House from August 2022 to July 2023, according to the indictment. AHCCCS suspended the business in July 2023, the agency's records show.
Some of the fraudulent claims submitted by Happy House were for people who are dead, jailed, or in hospitals, according to the indictment.
An attorney for Rusingizwa, Shaheen P. Torgoley, said in an email that Happy House provided legitimate rehabilitation services. "Mr. Rusingizwa is a pious family man with no criminal history," his attorney wrote. "He looks forward to defending against these allegations in court.
The indictment also listed Theodore Mucuranyana, pastor of Hope of Life International Church. According to court records, Happy House started on land leased from the church. The indictment accused Mucuranyana, along with the church, of money laundering.
According to the indictment, Happy House Behavioral Health transferred more than $5 million to the church after it received a letter from Arizona officials saying it was under investigation for fraud.
Mucuranyana did not return a phone message seeking comment.
His attorney, Joshua Kolsrud, emailed a statement that blamed the Attorney General's Office for failing to detect $60 million in payouts within a year. "Instead of addressing this regulatory failure, the prosecution pursues baseless charges against uninvolved parties to deflect blame," the statement said.
Kolsrud said Macuranyana was a "respected community leader with no criminal history."
Julia Kolsrud, an attorney for the church, said that the church merely served as a landlord and had no insight into the inner workings of its tenant.
The Republic left phone messages and sent emails to attorneys listed for the defendants in the case. They did not immediately respond.
The money fraudulently obtained from AHCCCS was used to pay the operators of so-called 'sober living homes' to house the patients, the indictment said. The other individuals named in the indictment were accused of conspiring with Happy House to get paid for providing the housing.
By law, sober living homes were not designed to get paid from AHCCCS funds. The person living there was supposed to work and pay for the housing with that paycheck.
$5 million check. Luxury jewelry. Handbags.
The indictment listed 11 businesses that prosecutors said took part in the racketeering scheme, along with specific transactions that authorities said constituted money laundering.
One was a July 2023 check for $2.8 million issued to Mvueykure, the indictment said.
Another woman, who was listed in corporate records as one of the principals of Happy House, received a check for the same amount on that same day, the indictment said. That person was not listed in the indictment.
Happy House wrote two checks to Hope of Life Church in summer 2023, one in June for $500,000 and another in July for $5 million, according to the indictment. In August 2023, more than $900,000 was transferred from the church to pay for a property. Hope of Life Church was listed as the buyer, according to documents filed in the Maricopa County Recorder's Office.
Online real estate sites show the address listed in the indictment as matching a 5-acre vacant parcel described by a listing agent as the "perfect place to build your dream home."
In December 2023, Hope of Life International Church wired $2 million to an unnamed entity in Rwanda, according to the indictment.
A filing in a related case seeking to seize assets said investigators searched the homes of Mvuyekure and Rusingizwa, both located in Peoria, in June 2024. Among the items seized, court records show, were luxury jewelry, watches, and handbags.
The grand jury charged the individuals and businesses on April 21, according to the indictment.