MINNEAPOLIS, Minnesota – A 13-count indictment charges three defendants with conspiracy to commit wire fraud, wire fraud, and money laundering of proceeds derived from fraud, announced U.S. Attorney Andrew M. Luger.
According to court documents, between March 2018 and July 2024, Shawn Ashley Grygo, 37, of Forest Lake, Minnesota, Shantel Rene Magadanz, 34, of Stacy, Minnesota, and Heather Lynn Heim, 46, of St. Paul, Minnesota, devised and carried out a health care fraud scheme to systematically overbill for drug and alcohol treatment services.
The defendants used an outpatient drug and alcohol treatment center called Evergreen Recovery, Inc. to defraud Medicaid and other health care programs by billing for treatment that was not provided, services that were not eligible for reimbursement, and billing for treatment services clients were required to attend as a mandatory condition of remaining in free housing provided as a kickback.
According to court documents, in order to maximize the amount of fraudulent Medicaid claims, the defendants used free housing in Evergreen-controlled “sober” homes as a kickback to induce clients to enroll and remain in Evergreen Recovery treatment so that the defendants could use those clients’ names and identifying information to overbill Medicaid.
The defendants recruited people from homeless shelters and encampments, residential drug treatment programs, and county probation offices looking for places to put people being released from jail. As part of their conspiracy scheme, the defendants told clients at intake – and repeatedly throughout their stay – that their entitlement to free housing was contingent on their attendance at least five group counseling sessions per week and a weekly individual session with their primary counselor.
According to court documents, the conspiracy scheme also involved fraudulent practices designed to facilitate overbilling for group counseling, one-on-one counseling, and treatment coordination services.
Grygo, Magadanz, and Heim are each charged with one count of conspiracy to commit wire fraud and nine counts of wire fraud. Grygo is also being charged with three counts of money laundering. Grygo is expected to make her initial appearance on Monday, December 23, 2024. Magadanz and Heim made their initial appearances on December 19, 2024, and were released on conditions, including a condition prohibiting contact with former clients and employees of Evergreen Recovery and its related entities.
This case is the result of an investigation conducted by the FBI and the Health and Human Services – Office of Inspector General. The U.S. Attorney’s Office would also like to thank the Medicaid Fraud Control Unit (MFCU) at the Attorney General’s office for their assistance in this matter.
Assistant U.S. Attorney Lindsey E. Middlecamp is prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Related Federal Cases
- Seng Xiong, Elder Fraud Scheme, Minnesota 2024 · Washington
- Julius Lee Boston, Tax Return Fraud, Minnesota 2012 · Minnesota
- John L. Steele, Mail and Wire Fraud, Minnesota 2023 · District of Columbia
- Timothy Wayne Guthman, Health Care Fraud and Mail Fraud, Minnesota 2012 · Minnesota
- William Johnson, Murder and RICO Conspiracy, Minnesota 2023 · Tennessee
Key Facts
- State: Minnesota
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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