Rural Health Fraud Exposed

by Gary Snyder

A nonprofit company that received federal funding for drug and alcohol treatment of thousands of American Indians in rural Northern California will forfeit $5.1 million and give up two years of eligibility to settle a government fraud suit, the U.S. attorney's office in San Francisco announced.

Federal authorities accused the California Rural Indian Health Board of trying to inflate its client base by directing funds to payments for housing, auto repairs and other expenses unrelated to treatment.

The suit also alleged that the company eliminated the legally required screening of all clients for drug and alcohol abuse and, as a result, distributed some of the funds to tribal members who did not need treatment. Rather than handing out vouchers that could be used only for treatment programs, the company arranged the delivery of unrestricted gift cards, the suit said.

The Rural Indian Health Board denied the allegations and did not admit any wrongdoing in the settlement, which was made public this week. The board did not respond to a request for comment.

"This settlement is a victory for all (access to recovery) clients who need substance and alcohol abuse treatment and recovery support" by making sure that the federal funds are used for their intended purpose, the U.S. Attorney said in a statement. (source)

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)