ST PAUL, Minn — Dozens of federal agents descended on a St. Paul addiction treatment facility at the center of a KARE 11 investigation early Tuesday, serving a search warrant on Evergreen Recovery.
KARE 11 Investigates reporter A.J. Lagoe was on the scene as agents from the FBI and the U.S. Department of Health and Human Services (HHS) descended on the facility located on the 14000 block of Energy Park Drive in St. Paul. One of the duties of HHS is investigating allegations of Medicaid fraud.
Lagoe saw both employees and clients being turned away, and overheard workers telling clients that Evergreen was closed for the day.
Evergreen's owners - the couple David Backus and Shawn Grygo - watched from outside as agents combed through their facility and removed numerous boxes.
When asked if they were willing to comment on the federal raid, they declined.
The government raid comes in the wake of KARE 11's multi-part "Recovery Inc." investigation which exposed the couple living a lavish lifestyle - with expensive cars and travel on private jets - as their company billed millions of dollars to taxpayer-funded Medicaid for services clients and employees said were not always provided as claimed.
In May of this year, KARE 11 confirmed that a federal investigation was underway into Evergreen Recovery after speaking with former employees who said they’ve been interviewed by agents from both the Inspector General’s Office of the U.S. Department of Health & Human Services and the Minnesota Attorney General’s Medicaid Fraud Unit.
Evergreen Recovery serves approximately 600 clients dealing with addiction. The treatment facility has been the subject of an ongoing KARE 11 investigation into allegations of billing irregularities, including those involving "peer services."
At Evergreen Recovery, many services - including van transportation to counseling sessions, and sober home meetings – are provided by certified peer recovery specialists and billed to taxpayers.
However, KARE 11’s investigation discovered Evergreen has been using people who may not legally qualify as peers. Minnesota state law mandates peer recovery specialists – basically mentors for people battling addiction – be people with "a minimum of one year in recovery from substance use disorder.” But KARE 11 Investigates uncovered evidence that Evergreen allowed workers who are not in recovery to bill as peers.
In earlier reports, KARE 11 documented other examples of questionable billing at Evergreen. Both workers and clients accuse the company of improperly billing taxpayers for treatment never provided, falsely billing group activities as if they were a series of individual interactions and overstating the times spent on van rides to and from recovery treatment.
In one case, records obtained by KARE 11 show Evergreen billed taxpayers for 203 hours of peer support services supposedly worked by a single employee in a single day. Multiple sources say that the employee has never been in recovery – and therefore did not meet the legal requirement to bill as a peer.
Evergreen Recovery owner and CEO David Backus has denied all of the allegations.
The question now – as the Feds take action - is what happens to Evergreen’s clients? Many of them live in Evergreen-affiliated sober homes.
If individuals are facing housing crisis due to circumstances related to Evergreen, the Minnesota Department of Human Services provided the following list of resources:
For Hennepin County residents:
- Hennepin Shelter Hotline: call 612-2024-8200.
- Hennepin County Front Door: call 612-348-4111 for direct calls with county staff to navigate available resources.
- Tenant Resource Connections (trchennepin.com)
For Ramsey County Housing Supports Services
- Online: https://www.ramseycounty.us/residents/assistance-support/assistance/housing-services-support
- Call the emergency shelter and services at: 651-266-1050.
Other resources include:
- Veterans Community Resource Referral Center
- Online: www.va.gov/homeless/crrc.asp
- Call 612-313-3240
- Minnesota housing Benefits 101 an online resource to explore housing benefits in Minnesota. Online: www.mnhb101.org
- Home Line, a nonprofit Minnesota tenant advocacy organization. Online: www.homelinemn.org
Asked for comment on the raid, DHS issued the following statement: “DHS has been actively investigating Evergreen Recovery for several months and collaborating with the U.S. Attorney’s Office. However, details about the ongoing investigations are not public. Speaking generally, DHS investigations can include reviewing records, onsite visits, payment withholds and cooperating with law enforcement."
The statement went on to say, “We take allegations of fraud in Medicaid programs seriously because it’s unacceptable for people to misuse money intended for some of the state’s most vulnerable residents.”