Fort Defiance Couple Copped to $3.5M Medicaid Fraud

Sylvia Begay, 50, and Virgil Begay, 53, both of Fort Defiance, Ariz., were sentenced this week in federal court for a brazen health care fraud scheme that ripped off Arizona’s Medicaid program for over $3.5 million. The couple admitted to billing the state’s Health Care Cost Containment System (AHCCCS) for tens of thousands of medical transports that never happened—fleecing a system meant to serve the poor and vulnerable on the Navajo Nation.

Federal Judge G. Murray Snow handed down a 28-month prison term to Sylvia Begay, followed by three years of supervised release, and ordered her to repay $2,174,207 to the state. Virgil Begay received 21 months behind bars, three years supervised release, and must repay $1,367,588. Both pleaded guilty to health care fraud, capping a years-long scam that exploited a critical public assistance program.

Their companies—Hozho Nahasdlii Health Care at Home, owned by Sylvia, and Beauty Way Transport, operated by Virgil—were licensed to transport Medicaid recipients to medical appointments across the vast Navajo reservation. But from December 2010 through May 2013, the operation was a front. Sylvia’s company submitted more than 24,000 fake claims. Virgil’s filed over 16,000. No patients were moved. No miles logged. Just cold, calculated fraud.

AHCCCS, Arizona’s Medicaid agency, covers low-income residents who qualify for health care services. The Begays turned that lifeline into a slush fund, draining taxpayer money meant for dialysis rides, cancer treatments, and doctor visits. Instead, they padded their pockets while real patients struggled to access care in one of the most underserved regions in the country.

The FBI ran the investigation, peeling back layers of falsified logs, doctored dispatch records, and phantom trips that existed only on paper. Prosecutors Bridget Minder and Peter Sexton, Assistant U.S. Attorneys in Phoenix, built the case in the District of Arizona, leading to the couple’s downfall and the recovery effort now underway.

Case number CR-15-08252-GMS-PHX marks another strike against public fraud in Indian Country. With release number 2016-098_Begay, the DOJ sends a message: stealing from Medicaid isn’t a victimless crime—it’s a betrayal of the sick, the poor, and the public trust. The Begays are going to prison. The tab? Over $3.5 million. The cost? Far higher.