The U.S. Attorney’s Office in Minnesota has secured a pair of Medicaid fraud convictions as the state continues to grapple with a seemingly unending fraud problem.
On Tuesday, Shantel Magadanz and Heather Heim each pleaded guilty to a single federal charge of conspiracy to commit wire fraud. According to their plea agreements, Magadanz and Heim were part of a Medicaid fraud scheme that involved Evergreen Recovery Services.
A now-defunct substance abuse treatment center, Evergreen was located in St. Paul and operated for several years. Charging documents state that Evergreen was primarily funded by reimbursements it received from Medicaid-funded programs for providing substance abuse treatment.
In Minnesota, Medicaid-funded programs are run by the Minnesota Department of Human Services (DHS).
However, federal prosecutors say Evergreen “operated as a highly exploitative drug and alcohol treatment program that reaped enormous profit through its fraudulent billing practices at the expense of addiction clients and taxpayers.”
Magadanz, who joined Evergreen in 2022, was promoted to CEO in 2024 and oversaw the center’s billing practices and attendance-taking. Meanwhile, Heim joined Evergreen in 2018 and “designed and helped supervised [sic] the attendance-taking and billing practices.”
Both women were reportedly hired by Shawn Grygo, who allegedly had “significant involvement in the day-to-day operations of Evergreen and had final say over significant decisions.”
Grygo is facing her own federal charges in connection to the Evergreen case. Alpha News reached out to Grygo’s attorney for this story but did not hear back.
According to the women’s plea agreements, “the attendance-taking for programs involved adding names to counselor logs and giving full four-hour group attendance credit to people without any time-in, time-out data collected, sometimes based on as little information as a client being seen in the parking lot at the facility that day.”
“This led to significantly inflated billing practices,” say the plea agreements.
Additionally, Evergreen employees repeatedly approached the women with concerns about the billing practices. However, those concerns were allegedly shut down by the two women at the direction of Grygo. The pair also “falsely insisted to concerned employees that DHS had signed off on all of Evergreen’s practices, when it had not.”
In one instance, the women reportedly helped Grygo “in an all-night session before a DHS visit in January 2024 to create additional back-dated documentation” and assisted Grygo in creating “falsified documentation to justify funds that Evergreen had fraudulently received from the government.”
Magadanz and Heim were each charged with one count of conspiracy to commit wire fraud and nine counts of aiding and abetting wire fraud. As part of their plea agreements, the nine outstanding counts will be dismissed against both women after sentencing.
“In total, the fraud loss associated with [the two women] and the conspiracy was at least $5,625,272,” say the plea agreements.
Alpha News reached out to the U.S. Attorney’s Office for this story. However, as a general matter, the office is not issuing press statements at this time due to the ongoing federal government shutdown.
The two guilty pleas appear to be the first fraud convictions secured by the U.S. Attorney’s Office since Daniel Rosen was confirmed as the new leader of the federal prosecutor’s office in Minnesota.
Luke Sprinkel
Luke Sprinkel previously worked as a Legislative Assistant at the Minnesota House of Representatives. He grew up as a Missionary Kid (MK) living in England, Thailand, Tanzania, and the Middle East. Luke graduated from Regent University in 2018.
