Latest news with #NewLifeWellness
Yahoo
20-05-2025
- Yahoo
'Devastated our lives': Former employees unaware they worked for businessman who plead guilty to AHCCCS fraud
The Brief Three people who used to work for an unlicensed health care facility in the Phoenix area are voicing their frustrations over what had happened. The owner of the facility, James Demasi, pleaded guilty in March 2024 to fraudulent schemes and illegal control of an enterprise on behalf of two treatment centers. "This man has effectively ruined some of our lives," one of the former workers said. PHOENIX - In a follow-up to a story we brought you in April, we are taking a deeper look into a Phoenix area businessman who ran an unlicensed health care facility out of a Phoenix motel that was used for clients trying to get sober. The clinics that they were transported to daily, however, defrauded Arizona's Medicaid agency for millions of dollars. The backstory James Demasi owned two clinics under the name 'New Life Wellness Center,' a behavioral health provider for people in need of substance abuse treatment. Records we obtained show that the Arizona Health Care Cost Containment System (AHCCCS), which is the state's Medicaid agency, paid New Life $80 million from 2015 through 2024. Amid a massive crackdown, however, red flags led to a criminal investigation and a costly plea deal. What we know While in court, Demasi pleaded guilty in March 2024 to fraudulent schemes and illegal control of an enterprise on behalf of his two treatment centers. Demasi also agreed to pay $25 million back to the state, nearly a year after AHCCCS suspended payments to New Life Wellness due to credible allegations of billing fraud. With Medicaid funding gone, nearly 150 clients living at the Thomas Suites Campus of Care would be impacted. We spoke with people who used to work at Thomas Suites. Local perspective "It's embarrassing. It's so embarrassing," said Morgan Valentine. "All I wanted to do was help the clients. I was driving my personal car with clients in it to and from these hotels to their doctor's appointments. He didn't care. He offered no support to his staff." Valentine was the Director of Housing for Thomas Suites, working under Demasi from November 2023 through January 2025. She said many of the clients were parolees out of prison, and unemployed. "Did you feel like it was a sinking ship?" we asked Valentine. "100% at a certain point," Valentine answered. "Like, you kind of saw the writing on the wall, and it was going under and it's going under fast, and that's why I chose to step away." "When I got hired at New Life Wellness, I was told it was like Disneyland," said a former worker, identified only as "Bob" as he wishes to remain anonymous. "Bob" worked for Demasi from December 2023 until October 2024. "Did you know that New Life Wellness had been convicted of fraud?" we asked Bob. "No," Bob replied. "Not until your report." Both Bob and Valentine said Demasi did not pay them consistently, but reassured them that money was on the way. "Everything after that was one big lie," said Bob. Dig deeper On multiple occasions in 2024, the City of Phoenix turned the water off due to non-payment. "Our clients were having to take buckets of water and fill their toilets up to go to the restroom," said Valentine. The direct impact was felt by clients, staff, and caterers like Victor Hernandez. "It just eventually had to stop, because it was too much accumulating," said Hernandez. Hernandez said he prepared meals daily for the residents at Thomas Suites from December 2023 to April 2024, investing his own money while never getting paid. "I put my whole effort into this business and both businesses that I run to make it successful, and when somebody takes good earnings off your life savings, it's pretty upsetting," said Hernandez. Hernandez has filed a civil suit against Demasi for breach of contract. "How much money do they owe you?" we asked Hernandez, to which he replied "$435,000." In a response filing, Demasi denies the allegations. His attorney has not replied to our request for further comment on the lawsuit. We also asked both Bob and Valentine on the amount of money they are owed. "Close to $20,000," Bob said. "I'd venture to say it's in the ballpark of like $30,000," said Valentine. Valentine said she believed in what she was doing at Thomas Suites, helping people get their lives on track – but now calls her experience a "broken dream." "We were lucky to get $1,000 a month from this man. Like, he just devastated our lives, having to beg for money, like around Christmas time," said Valentine. "We all have families, and having to be your employer to pay you for the hours that you worked is…this man has effectively ruined some of our lives."
Yahoo
29-04-2025
- Health
- Yahoo
Phoenix motel used as unlicensed health care center tied to clinic convicted of AHCCCS fraud
The Brief In this FOX 10 Investigates report, we're learning more about Thomas Suites, an unlicensed treatment facility that had connections with a multi-million-dollar fraud case. At the now closed-down Thomas Suites, there were reports of drug use, no running water and other sorts of crime. PHOENIX - FOX 10 Investigator Justin Lum is uncovering how an unlicensed treatment facility operated out of a Phoenix motel with ties to a multi-million-dollar fraud case. The Medicaid fraud scandal has cost the state $2.5 billion and displaced thousands of vulnerable people fighting drug addictions. A majority of the victims are Native Americans, and some are recruited from reservations to get treatment that's rarely provided. What we know Thomas Suites has been on the radar of investigators for a while now. FOX 10 obtained records from Arizona's Department of Health Services (AZDHS), which include a cease-and-desist order served to Thomas Suites. Thomas Suites was fined more than $150,000 in civil penalties. Now, we're learning more about living conditions from just months ago. Thomas Suites was operated in the heart of Phoenix near SR 51 and Thomas Road. This facility is now shut down, AZDHS says, and it appears a Motel 6 is taking its place. Back in November 2024, FOX 10 cameras documented residents living at what state investigators deemed an unlicensed health care institution and a "public nuisance inimical to the public health and safety." What's left of Thomas Suites' social media describes it as a "transitional living facility for men and women reentering society from incarceration," but that's not what the program started out as, AZDHS says. Click to open this PDF in a new window. Timeline AZDHS began investigating Thomas Suites back in 2023 after receiving a complaint that said Native American families and individuals were being housed in an unlicensed motel. In August 2024, AZDHS issued a cease-and-desist after learning nearly 150 people lived at Thomas Suites, received counseling, and drug testing at the unlicensed facility. Investigators also observed an office with a locked safe for medications designated for several residents. Documents say clients were transported from Thomas Suites to a clinic called New Life Wellness multiple times a week. Both Phoenix and Flagstaff locations for New Life Wellness had been suspended by AHCCCS, the state's Medicaid agency, the year before in May 2023 over credible allegations of fraud. Suspension letters accused New Life Wellness of "ghost billing," which means billing for services never provided, also double billing claims for a member who was receiving care at another facility, and even billing for people who were dead. Well, in March 2024, a judge told the owner of New Life Wellness, James Demasi, "On behalf of New Life Wellness center, they are charged with count one, fraudulent schemes and artifices, a class two felony. A non-repetitive offense committed between November 8th, 2020 and May 31, 2023. Do you understand the charge?" He replies, "I understand, your honor." The judge asks, "How do you plead to count one?" Demasi says, "That is correct." The judge clarifies, "Do you plead guilty or not guilty?" Demasi says, "I plead guilty, yes." On behalf of both New Life Wellness locations, Demasi took a plea deal from the Arizona Attorney General's Office, pleading guilty to fraudulent schemes and illegal control of an enterprise. The judge ordered that he must pay $25 million in restitution to the state. Click to open this PDF in a new window. What they're saying With AHCCCS officially terminating New Life Wellness locations, his business at Thomas Suites pivoted, bringing in parolees under the supervision of the Arizona Department of Corrections, Rehabilitation and Reentry. Benjamin Jeffrey is a community advocate who stepped up to help residents of Thomas Suites last November. "At the end of the day, they were living in deplorable conditions. They were living in a health and safety hazard environment, but it was better than being on the streets," Jeffrey said. "I've got 150 to 175 people in this hotel. There is no running water. They are drawing buckets of water out of the swimming pool to flush the toilets, and they cannot take a shower. So, it quickly became a health and safety situation." Demasi wasn't paying his bills. This was the third time water was shut off to Thomas Suites, the city of Phoenix says. Jeffrey says he galvanized other local organizations to help get residents temporary housing, but the city turned the water back on, so despite the issues, many residents chose to stay. "The residents were being told, 'You don't have to come out, you don't have to accept help,'" Jeffrey said. Remember that cease-and-desist order? FOX 10 learned the facility is no longer operating as Thomas Suites since earlier this year. The investigation is complete, but we're told court proceedings in this case are ongoing as entities like Thomas Suites has the right to appeal any enforcement action taken against them for due process. We've reached out to Demasi and his attorneys for comment, and have not heard back. FOX 10 Investigator Justin Lum asked Jeffrey if he would call this a large-scale halfway house. He answered, "It was essentially a large-scale halfway house that promised a lot of services but was allowing people to do drugs. There was crime, drug dealing, no running water, no fire sprinklers." By the numbers According to AHCCCS, both New Life Wellness locations owned by Demasi made a total of $80 million in payments from 2015 to the end of 2024. What you can do Click here to learn more about the sober living crisis in Arizona. Click here to learn more about AHCCCS fraud and how to report it.
