How 1 man is accused of fleecing AHCCCS of almost $200K by exploiting Indigenous people

A 29-year-old man who built an empire of health care businesses in Arizona while styling himself as a self-made entrepreneur is now accused of using that business model to exploit the state and some of its most vulnerable Indigenous people.

Johnwick Nathan is one of about three dozen people accused of defrauding the state's Medicaid program over billing for mental health treatment and addiction rehabilitation that never was provided. Many of the patients in the other cases were aggressively recruited and kidnapped off the street on tribal land and taken to the Phoenix area, according to tribal and state leaders.

Nathan has been charged in Maricopa County Superior Court with defrauding AHCCCS, Arizona’s Medicaid program, of more than $196,000. One woman was out of state in an emergency room when Nathan claimed his company helped her, according to court records.

All the while, he lived a life of luxury in a $1.8 million, 4,700-square-foot north Scottsdale mansion near Pinnacle Peak. He owned a dozen cars, including a Bentley and a McLaren, according to public records and published accounts.

Court documents lay out the road map to the crimes that state prosecutors allege Nathan committed.

In June 2022, a grand jury indicted Nathan and accused him of defrauding AHCCCS, or the Arizona Health Care Cost Containment System, through his health care company, Harbor Health Integrated Care LLC. His Phoenix outpatient clinic off Interstate 17 and Peoria Avenue was set up to help people suffering from mental illness and substance abuse.

He faces fraud charges plus three counts of forgery, theft, illegal control of an enterprise, and 12 counts of money laundering.

Prosecutors accuse Nathan of using Harbor Health to defraud Arizona taxpayers over two years by billing for services that were never provided to at least 10 of his patients.

In October 2021, AHCCCS suspended payments to both Harbor Health and Nathan's nearby 24-hour group home, Safe Keepings Counseling LLC, accusing the providers of engaging in fraud. The group home is the parent company to Harbor Health.

In May, Arizona Attorney General Kris Mayes, Gov. Katie Hobbs, and representatives of 13 Arizona Indigenous tribes announced that criminals were posing as health providers and defrauding Arizona taxpayers out of “hundreds of millions of dollars” as they victimized Indigenous people, their patients.

In addition to Nathan’s, there are at least three criminal cases filed in which people have been accused of defrauding AHCCCS.

AHCCCS has no estimate as to how many people were hurt by the fraudulent billing, according to Heidi Capriotti, one of the agency's public information officers.

As of Aug. 1, nearly 250 providers have had their payments suspended by AHCCCS since 2019. That number continues to grow as the agency investigates fraud claims.

Court documents and county records indicate that Nathan operated alone in his particular criminal case. Prosecutors accuse him of forging documents to have sole control of bank accounts, making him the only biller for Harbor Health.

Some of those accusations involve his ex-fiancee, and now ex-business partner. Nathan's lawyer argues that she is biased against him after losing both him and an interest in the business.

Nathan pursued other business interests besides health care, including construction, a nightclub and online motivational speaking.

His defense lawyer, Alexis Brooks, declined to comment for this report, as did the Arizona Attorney General's Office, which is prosecuting the case.

Nathan did not return calls seeking comment.

Unanswered questions, loose ends: What to know about Arizona's Medicaid fraud investigation

Fee-for-service programs had billing loophole

Nathan's patients were part of the American Indian Health Program, which is a fee-for-service population.

Under fee-for-service, behavioral health outpatient services like Nathan's do not require prior authorization from AHCCCS to provide and submit a claim for a service to a patient. If a claim meets basic filing requirements, the Medicaid agency will pay, according to Capriotti.

With no preapproval required, investigators called this lack of oversight a "cash cow" for AHCCCS providers.

In May, AHCCCS strengthened the filing requirements in response to the fraud probe. Now, outpatient behavioral health providers must include a copy of patients' most recent comprehensive assessment, their treatment plan, and the medical record documentation for services billed on the service date.

Between 2017 and 2020, Nathan had formed three Harbor Health businesses, according to Arizona Corporation Commission records. He used Harbor Health Integrated Care to bill AHCCCS. Between January 2020 and August 2021, he is accused of "ghost billing" and "overbilling" for health services.

Harbor Health's facility hours were 8 a.m. to 5 p.m. Monday through Friday. Patients were transported there and offered services only during business hours. A schedule typical for the day: group therapy, lunch, additional group sessions, and a trip to the Salvation Army Wellness Center.

At the end of the day, patients returned to their group home. If an overnight stay was needed, patients needed to go to Nathan's 24-hour group home, Safe Keepings, court records show.

Prosecutors: Nathan billed for patients who weren't being treated there

But by July 2021, AHCCCS flagged the Arizona Attorney General's Office health care fraud and abuse office, reporting questionable billing from Harbor Health. An investigation found that Nathan was billing AHCCCS when there was nothing to bill for, according to the criminal complaint against him.

In just about all instances, Nathan is accused of billing patients while they were otherwise being treated at other medical facilities — some in Phoenix, some hours away.

Nathan billed one of his patients, a 34-year-old Indigenous woman, when she was a nine-hour round-trip drive away, court documents reveal.

On March 2, 2020, the woman received just over nine hours of treatment, based on Nathan's billing.

However, she was found "lying on the ground" 4 1/2 hours away in Gallup, New Mexico, court documents show. That evening, the Gallup Indian Medical Center admitted her with complaints of suicidal tendencies and addiction relapse. She was discharged the next afternoon.

She was still out of the state when Nathan submitted his billings to AHCCCS on March 5. Nathan said in court documents that he provided the services to her, just not on the dates that were on the billing statement. He argued that he instead provided the services on Feb. 29 and March 1.

But on Feb. 29, a Harbor Health progress note shows that the woman was agitated that day, wanted to sleep in, and "declined" group therapy. Instead, she went on an outing to Westgate and received no treatment when she returned, according to the note found in court documents.

The next day, another Harbor Health progress note shows that the woman "declined" to attend group therapy again. She then packed her belongings, checked out of the facility, and was seen boarding a Greyhound bus at noon by a Harbor Health behavioral health technician, court documents show.

'Stunning failure of government': Fake rehab clinics reportedly fleeced state of 'hundreds of millions,' victimized tribal members

The billing pattern Nathan followed with the woman is similar to that for the other nine patients, court documents show. Many of the patients were found to be at another hospital for a day or more, or a portion of the day for which Nathan was billing.

One patient was billed the equivalent of 30 hours a day for nearly two months.

Another patient “graduated” from Harbor Health and moved to the Navajo Nation. But Nathan had billed the patient for dates after that, and AHCCCS paid him a little over $96,000, court documents show.

In court filings, Nathan maintains that he provided the services, just not on the dates billed. He also argued that he did not solely bill through Harbor Health but also through the 24-hour facility Safe Keepings and that the state omitted several of his patients' medical records that showed Nathan provided the services after all.

The court denied Nathan’s motion to reconsider the charges, saying his arguments did not raise any due process concerns.

Ex-fiancee and ex-business partners blow the whistle

As state investigators delved deeper, they interviewed Nathan's now ex-fiancee, Sade Collins. The two were business partners and co-owners of Shoreline Behavioral Health LLC, another residential facility and group home.

Collins revealed to investigators that Nathan, who ended the romance, had previously become concerned that AHCCCS was going to initiate an audit on one of his behavioral health facilities, court documents show.

AHCCCS first notified the Arizona Attorney General's Office in July 2019 that Nathan was possibly engaged in questionable billing procedures and opened a criminal investigation, according to a court filing made by his lawyer.

Investigators closed their case when they decided they would need more resources.

Collins also told investigators she believed Nathan forged her signature on some documents relating to his businesses. After obtaining them, investigators noted they were signed "Sade Nathan," as if the couple were married. They weren't, and Collins told investigators she never signed with that name.

The first document was a September 2019 AHCCCS provider registration form for Safe Keepings Counseling. Arizona Corporation Commission records show that Safe Keepings earlier that year also listed Collins as "Sade Nathan."

In January 2020, Collins said Nathan forged her signature on a Bank of America signature card for a W-9 form, which gave him sole bank account access, according to court documents. In May 2020, he faked her signature on a business filing for Shoreline Behavioral Health, stripping her of any ownership and interest in the business, according to court documents.

Collins declined to comment for this article.

Investigators spoke with two other people who worked for Nathan at Harbor Health.

Lydia Sanabria had shifted from being a principal owner and chief operations officer for Harbor HealthCare Inc. between 2021 and 2022. She told investigators that she had access to the company's bank accounts and grew suspicious of them, court documents show.

She told investigators that Nathan had confronted her about the potential money laundering and told her to clean it up, the court documents state.

Sanabria declined comment for this article.

Payments to both Harbor Health and Safe Keepings were suspended by AHCCCS on Oct 1, 2021, for failing to adhere to AHCCCS policies and guidelines, billing for services not provided, and double billing, according to AHCCCS public records.

Also in 2021 and 2022, the state revoked the licenses for the outpatient treatment center and the group home.

Wildine Burgess, Nathan's sister, is the president and CEO of another health care company that AHCCCS suspended payments to on July 21 — Heart of Harbor Integrated Care LLC. She also has been listed as a principal member for some of Nathan's other companies.

‘Self-made’ with businesses ranging from health care to a nightclub

What people can learn about Nathan online is this: His mother brought him and his siblings to the United States from Haiti when he was 3 years old. He lived in New York and Connecticut before coming to Tempe to study music at the Conservatory of Recording Arts and Sciences.

To help make ends meet, Nathan worked as a behavioral health technician at a group home. There, media outlets reported, Nathan found his true calling by working closely with people who were struggling.

In the course of six years, Nathan had organized or incorporated 20 companies with the Arizona Corporation Commission. Six were health care facilities.

Others involved construction, entertainment, and dining, and more. He is the listed principal owner for 17 Arizona businesses and is involved in a total of 25, Arizona Corporation Commission records show.

In late May 2021, in the span of two days, Nathan made himself the principal owner and changed the address for his 15 Arizona companies to a P.O. box at a UPS store in the Phoenix Convention Center.

Nathan incorporated a nightclub company in December 2020. The Vault Night Club opened near University Drive and 48th Street in March 2021 and closed in July 2022 after an unflattering reception by online reviewers.

By then, Phoenix police had taken 18 reports at the club, according to Sgt. Brian Bower. Calls included simple and aggravated assaults and one instance of disorderly conduct with a weapon.

Nathan owned a north Scottsdale home that he purchased for $1.3 million in June 2020 under a seller's loan, Maricopa County records show. The home sat on a 150,000-square-foot lot. Nathan told news outlets in the summer of 2021 that he owned 12 cars, including a McLaren and a Bentley.

But months after selling his home for $1.8 million in cash in November 2021, Nathan still owed the IRS $2.3 million.

A federal tax lien filed with the Maricopa County Recorder's Office showed he still owed that amount from his 2020 return and refiled in May, after the sale of his house.

Outside of his many businesses, Nathan presents himself as an online motivational speaker. On social media, he calls himself a doctor, innovator and mentor, and preaches about being consistent to be successful and acting with love.

In June 2021, he published a short book called "12 Principles of Soulful Success: Achieving True Success by Benefiting Others." Its summary states that Nathan had “transformed” his passion for serving others into a multimillion-dollar enterprise. He credits his success by maintaining a servant mindset and putting the benefit of others first.

That's not how state regulators and investigators now see it.

This article originally appeared on Arizona Republic: Johnwick Nathan stands accused of defrauding AHCCCS and his patients