Mass evictions at Mesa townhome complex tied to crackdown on sober living operator
What was built as a luxury townhome development with a zen garden, fitness center and lap pool became a sober living compound and a menace to the neighbors. Then, last week, police and social workers converged to help clear it out.
Almost three dozen people were kicked out in informal evictions on Jan. 9 from the Canal on Baseline complex in Mesa for not paying rent.
But the condo complex was caught up in a widespread scandal involving the massive defrauding of taxpayers and the exploitation of vulnerable, mostly Native American people.
The scam, authorities say, involved stashing people who needed to beat drug or alcohol addictions in motels or at complexes like Canal on Baseline. Those responsible are accused of billing the state's medical system for services without providing addiction therapy.
Last week, a property manager for Canal on Baseline heard complaints from residents about utilities suddenly being shut off and tipped off the Mesa Police Department to possible mass evictions, police said. They, in turn, altered the Arizona Health Care Cost Containment System that people were left without a home.
It's not immediately clear where the displaced tenants ended up. State officials brought in homeless service organizations to help.
Neighbors of the Canal on Baseline complex have feared for their safety for months. Now they fear the clear-out offers just a brief respite from the drugs, violence and disturbances that plagued the place for a year. In November, The Arizona Republic reported how neighbors of the complex at 6060 E. Baseline Road called for authorities to act.
What residents endured was not an isolated event. It was part of what state investigators have called the biggest fraud of its kind in Arizona history.
State prosecutors have alleged in court that more than three dozen people and companies fraudulently posed as addiction counseling services. They targeted Native Americans who needed help. Some were kidnapped off the streets from the Four Corners area. Then the state-licensed therapists bilked the state Medicaid system of hundreds of millions of dollars for services they did not provide.
Unanswered questions, loose ends: What to know about Arizona's Medicaid fraud investigation
What are sober living homes?
Sober living homes are set up as temporary shelters for patients while they receive treatment for drug or alcohol addiction. Because no therapy occurs there, the state doesn't license them.
Records from state regulators and court filings suggest many hundreds of people seeking treatment were dumped in such housing in metro Phoenix, but authorities have not said precisely how many people suffered. They may not know.
These people were taken to sober living homes where they were ignored, denied counseling, warehoused and, according to court records, witnesses and one autopsy report, plied with alcohol.
In March, Mesa police found a 36-year-old Native American man from Window Rock dead in a sober living home at Canal on Baseline. The Maricopa County Medical Examiner's office listed his cause of death as "chronic ethanol use" and noted he had alcohol in his blood at his time of death.
State authorities announced a crackdown on the bogus therapy companies in May. Since then, AHCCCS has suspended payment to about 300 licensed providers, but it's unclear how many participated in the fraud. Some have complained they were falsely caught up in a dragnet.
Arizona Behavioral Health Clinic LLC, one sober living home operator in the Canal complex, kicked out tenants on Jan. 9. It had its AHCCCS payments suspended Dec. 22 for what the state described as credible fraud allegations. It's licensed at a different address.
The provider defaulted on its contractual agreement to provide residents with “a seamless translation to alternative care,” according to AHCCCS.
The owner of the clinic did not immediately respond to The Arizona Republic’s request for comment.
Mesa police confirmed that 35 people were removed without court orders last week.
AHCCCS called nonprofits Solari Inc. and Community Bridges Inc., which focus on crisis intervention and addiction treatment, to help the evicted tenants at Canal on Baseline find temporary lodging or transportation to somewhere else, said Heidi Capriotti, an AHCCCS spokesperson.
Neither Solari nor Community Bridges said how many residents found temporary lodging.
How we got here: New condo complex purchased by single owner
Canal on Baseline opened in early 2022 under the guise it was going to be a for-sale luxury condominium complex until a single owner bought it.
Samir Holdings Inc., based in Chandler, acquired all 90 units and converted them all to rentals, according to Maricopa County Assessor's Office documents.
The neighborhood went from a quiet area to the focus of frequent police presence. In 2023, police fielded 237 calls for service to Canal on Baseline. Mesa police responded to reports of disturbances, people in distress and violence every 37 hours, on average. Officers responded to such calls as people disturbing the peace, family fights, welfare checks and reports of dead bodies.
Residents started pressuring the city and property owners to resolve the issues. Then, in May, The Arizona Department of Health Services and AHCCCS investigated Canal on Baseline and halted payments to at least two providers operating there.
Up until that point, fraudulent therapy companies used their revenue stream from AHCCCS to pay. The state program does not pay the housing costs of people in outpatient behavioral health therapy.
Samir Sawhney, the owner and property manager, did not immediately respond to The Republic's request for comment for this article. In a statement to Fox10 in June, Sawhney said property managers didn't know the units were operating as sober living homes.
But eviction records filed to the court show as early as December 2022 that rental contracts required extra rent to use units to house people seeking rehab. Agreements included variations of this phrase: "The home will be used for sober living."
In December 2022, Unit No. 122 was leased to a couple who noted in the lease paperwork that they intended to use the three-bedroom apartment as “a group home.” A breakdown in the monthly rent showed them agreeing to pay a “group/sober home surcharge” of $500 a month.
At least 15 other units had lease agreements that included similar surcharges. Landlords tacked on the fee where renters might expect an add-on for having pets.
Documents in the Maricopa County Justice Courts show that from April to December, 38 formal notices for evictions were filed against tenants at the Canal property, in addition to the informal removals this month.
Resident evicted in August shares experience
In September 2022, Annie Valencia fell in love with No. 181 at the Canal complex when she moved in. It was a dramatic improvement from her previous quarters: a Kia Soul, parked in a deserted shopping center in Tempe.
Valencia, 40, had started using meth and other drugs as a teenager and had cycled through periods of sobriety and relapse her whole life.
Her cousin, hearing she was on the street again, called her and suggested a program. Valencia said she called the number and a woman named Geraldine Mutwol paid for Valencia and her fiancé to stay at a motel until she could arrange shelter through her program, Cactus Sage.
Valencia said Mutwol told the couple to meet her at the Canal complex and told her the apartment was hers rent-free, so long as she took online classes as part of her therapy. Valencia said Mutwol told her to register for the American Indian Health Program rather than the insurance she was on.
Valencia, a member of the Pascua Yaqui tribe, said she did so.
It appeared to Valencia that there were other people at the complex struggling with addiction. But, she said, there was no one around to keep them on the right path. She said she saw people using drugs and drinking, which echoes what neighbors have reported.
Valencia had been through other programs and knew that wasn’t how things were supposed to work.
“We’re here to get our life together and start getting us another chance to live and get a job and start doing what you can,” she said. She blamed both the absentee program managers and the participants who should have known better. “Some people abused it,” she said. “That’s not how it’s supposed to be.”
Sometime in August, Valencia said she received a text from Mutwol telling her she was now responsible for the rent. Valencia asked why and said Mutwol told her something about not getting paid herself.
This was after the state crackdown.
A ledger filed with the eviction notice showed that Cactus Sage made regular credit card payments for the apartment in June. It then shows that Valencia paid the July rent by check. She said in the interview that she doesn’t have a checkbook, nor the $2,950 for the monthly rent.
“I didn’t have that kind of money,” Valencia said. “If I did, I would have been good.”
Valencia said she received no eviction notice or warning. Nor did she know her name was somehow placed on the lease.
One day, she said, the power went off. She couldn’t get an answer from Mutwol and moved out.
Mutwol did not return a phone message seeking comment for this report.
She lived on the street for a few days until she got hold of a family friend who was her former school guidance counselor. That was when she discovered she had been part of the larger scandal involving sober living homes.
The counselor suggested she call the state’s helpline, 211, and press the number 7. That led her to Community Bridges and, eventually, an apartment in Mesa with a rent she and her fiancé could afford. Valencia said she feels back on her feet for the first time in over a year.
“I don’t want what happened to me to happen to anybody else,” she said.
Elected officials respond, explore changes to city code
Mesa officials said they will continue working with the state agencies to tackle the problems posed by other sober living homes like Canal on Baseline.
Councilmember Julie Spilsbury, who represents the area, noted in a written statement, “I understand that concerns persist within our neighborhood. Mesa Police Department has been and will remain active in addressing these issues. With multiple visits throughout the week, we have increased our efforts to manage and alleviate any concerns raised by the community.”
Mesa city staff are working toward drafting new a city code that would add a layer of reporting. They want to establish code changes to prevent sober living homes from clustering together. Changes are expected to go to the City Council later this year.
Mayor John Giles, through a spokesperson, referred any questions to AHCCSS and in a statement wrote the city was aware of the evictions and not involved.
“We continue to be actively engaged as legislation is being developed and introduced to address sober living homes,” he wrote.
Problems are not over, neighbors say
Neighbors hope that after the Jan. 9 evictions, their struggles are over, but more in wish than expectation.
Gilbert resident Darrell Hornebacher said he has compassion for the people who have been displaced and “wants nothing but the best for them.” At the same time, he was elated when he heard they were moving out because he’s been dealing with disturbances there since he moved into the area nearly two years ago.
Because of the repeated police presence at Canal on Baseline, he still worries for his two daughters’ safety.
“I hope it's the end of it,” he said. “Everybody here wants to live peacefully.”
Nearby residents like Mary Simmons, who lives across the street from Canal on Baseline, aren't so sure.
“It's going to be a lull and ramp back up” again later, she said. Simmons drove through the complex Jan. 11 and said it was empty. Before the evictions, she said, she would see people “hanging out” around the complex. This day, no one was outside.
The white van she often saw parked inside the complex was gone also, Simmons said.
She said she’s worried people who were kicked out of the condo complex will end up living along the Roosevelt Water Conservation District Canal. Simmons and her husband, both retirees, walk along the canal almost every day and in the past two years have taken it upon themselves to pick up “vodka bottles” and trash to clean up the area.
“I feel bad for the people that have been taken advantage of," Simmons said. "Somebody has to fix all this.”
Reach the reporter at 602-444-8473 or richard.ruelas@arizonarepublic.com. Follow him on X, formerly Twitter: @ruelaswritings.
Reporter Maritza Dominguez covers Mesa and Gilbert and can be reached at maritza.dominguez@arizonarepublic.com or 480-271-0646. Follow her on X, formerly Twitter: @maritzacdom.
This article originally appeared on Arizona Republic: Crackdown on sober living homes leads to eviction of 35 people in Mesa
