Two plead guilty to Medicaid fraud in case Attorney General Ellison investigated jointly with U.S. Attorney’s Office

Both defendants pled guilty to conspiracy to commit wire fraud

October 22, 2025 (SAINT PAUL) — Today, Attorney General Keith Ellison released a statement after Evergreen Recovery leaders Shantel Magadanz and Heather Heim pled guilty to conspiracy to commit wire fraud following their participation in a years-long Medicaid fraud scheme. In December 2024, the U.S. Attorney’s Office indicted Magadanz and Heim for fraud, along with another Evergreen leader who has not pled guilty, Shawn Grygo. Attorney General Ellison’s Medicaid Fraud Control Unit provided substantial assistance in the investigation leading to their indictment and continues to provide ongoing support and analysis in this case.

"While I am pleased to see these fraudsters face justice for their crimes, the fact that anyone would steal money meant for poor people’s health care makes my blood boil,” said Attorney General Ellison. “My team and I will continue working with federal and state partners to investigate Medicaid fraud, hold wrongdoers accountable, and recover Minnesotans’ tax dollars.” 

For years, Grygo, Heim, and Magadanz overbilled DHS and UCare for substance abuse treatment services they did not deliver.The overbilling scheme included adding client names to counselor logs after the fact, and other falsification of back-dated records. In addition to overbilling, Evergreen also steered hundreds of clients to a sober housing provider, Second Chances Sober Living, which is controlled by one of Evergreen’s owners. Evergreen clients were offered free housing at Second Chances, but only if they agreed to attend a certain amount of programming at Evergreen Recovery, which Evergreen could bill Medicaid for, but which, in many cases, Evergreen did not actually provide. Through these illegal kickbacks and other false billing practices, Evergreen’s leaders are accused of stealing millions from Minnesota taxpayers. As laid out in Heim and Magadanz’ written plea Evergreen employees who raised concerns were either silenced, shut down, or lied to regarding the lawfulness of Evergreen’s practices.

Members of the Minnesota Attorney General’s Office’s Medicaid Fraud Control Unit assisted federal law enforcement, including the FBI and Department of Health and Human Services’ Office of Inspector General (DHHS/OIG), and the United States Attorney’s Office throughout the course of the investigation of Evergreen Recovery. Attorneys, analysts, and investigators with the Minnesota Attorney General’s Office participated in interviews with key figures in the investigation, helped execute the July 2024 search of Evergreen Recovery, analyzed data for and shared expertise with the United States Attorney’s Office, and conducted additional investigative activities.

Attorney General Ellison’s Medicaid Fraud Control Unit works to uncover, investigate, and prosecute individuals or organizations that steal from Medicaid. The Medicaid Fraud Control Unit receives 75% of its funding from the U.S. Department of Health and Human Services under a grant award totaling $4,409,872 for Federal fiscal year (FY) 2025. The remaining 25%, totaling $1,469,955 for FY 2025, is funded by the State of Minnesota.