Charges: Medicaid fraud scheme in St. Paul helped pay for private jets, luxury cars

Three Minnesota women have been accused in federal court of enriching themselves from a health care fraud scheme, spending the proceeds on private jets, luxury vehicles and other items.

The charges lay out how the three reportedly used an outpatient drug and alcohol treatment center called Evergreen Recovery Inc., based in St. Paul, to defraud Medicaid and other health care programs by billing for treatment that was not provided and services that were not eligible for reimbursement.

The scheme also allegedly involved the defendants using free housing as a kickback to induce clients to remain in Evergreen Recovery treatment so the clients’ names and information could be used to overbill Medicaid.

Charged in the case is Shawn Ashley Grygo, 37, of Forest Lake; Shantel Rene Magadanz, 34, of Stacy; and Heather Lynn Heim, 46, of St. Paul. Each faces nine counts of wire fraud, among other charges.

Magadanz and Heim made their first appearances in federal court Thursday. Grygo is set to appear in court Monday. None have entered a plea, according to online court records.

The complaint identifies Magadanz as the chief executive of Evergreen, Heim as the lead financial and operations officer and Grygo as the head of day-to-day operations.

From March 2018 to July 2024, Evergreen submitted invoices for $30 million from Medicaid and Medicaid-funded health care programs, the complaint said.

The three received excessive salaries in return. Magadanz was paid $600,000 in 2023 and was on track to receive more than $1 million this year, according to the complaint.

The scheme allowed the three to spend lavishly on country club memberships, property and designer clothing and handbags, the complaint said.