Sober Living Investor Gets $34,000,000 Fine - That'll Hit the Bottom Line, Ouch!

[Ken M.]

A company is having to pay more than $34 million for its role in scamming the state’s Medicaid system through fake sober living homes in part of the biggest fraud in Arizona history.

The Maricopa County Superior Court ordered on Monday that L & L Investments, LLC to give $30.2 million in restitution to the Arizona Health Care Cost Containment System (AHCCCS), in addition to its $4 million in fines.

L & L Investments was indicted in 2021 and in May 2024, a jury found the company guilty of multiple felony charges, including conspiracy, illegal control of an enterprise, theft and fraudulent schemes and artifices. At August 2024 sentencing, the company was fined $4 million and sentenced to seven years probation, 

but the restitution decision was delayed until this Monday.

According to a class action lawsuit filed against the Arizona government in December, the state knew about the scam as early as 2019 but didn’t go public until May of 2023.

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That means they didn't bring charges for several years after the scam was discovered. The "Investors" didn't know they were being investigated. All looked fine.

Take Note you Wholesalers and SubTo-ers, you are on the hook for your actions for YEARS if you don't follow the law. 

What? Your "guru" on Youtube or Facebook said it was okay to do "put your favorite technique here".  Hmmm, better check that detail with an attorney. Tell him you "are asking for a friend".

[Matt Greer]

Most of the investigations into real estate fraud take multiple years here. You're always better off just following the law and not playing with fire.