HELENA, Mont. — Montana State Auditor and Insurance Commissioner James Brown announced his office has uncovered a multi-million-dollar health care fraud scheme that targeted vulnerable members of Montana’s tribal communities, saving a state insurer and its customers more than $23.3 million.

Brown said the scheme involved recruiters who lured Native Americans from Montana reservations to so-called treatment centers in California by offering free, luxury rehabilitation. Victims were asked to sign paperwork for federally subsidized Affordable Care Act policies before being flown out of state, sometimes within the same day.

Instead of receiving mental health or addiction treatment, the individuals found themselves in overcrowded homes with little to no care. Some were left on the streets after a few weeks, while the fraudulent clinics billed insurance companies up to $9,000 per day per person, Brown said.

“We discovered a fraud scheme that involved fraudulently billing our insurance companies and their customers about $23.3 million in unsupported and unjustified bills,” Brown told NBC Montana. “We were able to expose the scheme, stop the demands for payment, and save Montanans millions of dollars as well as protect the quality of healthcare in our state.”

The Commissioner’s Office began investigating the fraud in early 2025 after PacificSource Health Plans, a nonprofit insurer providing Affordable Care Act coverage in Montana, reported suspicious claims. Investigators found at least 200 suspected fraudulent enrollments linked to California treatment facilities, with total claims of up to $50 million.

Under the ACA, Native Americans can enroll in marketplace plans at any time, which made it possible for out-of-state scammers to exploit same-day enrollments. Brown described the conduct as a form of human trafficking, saying participants were coerced into signing policies and transported across state lines for fake treatment.

“What was happening is that our citizens would be shipped down to California or to Arizona. No treatment would actually be provided,” Brown said. “Then the insurance companies that run the Obamacare plans would then be charged for the services that were never provided.”

Brown credited the quick cooperation of PacificSource in halting the billing and preventing further fraud. He said PacificSource contacted his office quickly and they worked closely with federal law enforcement and tribal leaders to stop the scheme.

The investigation, which began within weeks of Brown taking office, continues to probe other insurers in Montana that may have been targeted. Brown said additional rescissions could raise total savings to $50 million.

“What’s so outrageous about this scheme is that these fraudsters are not just stealing money,” Brown said. “They’re exploiting people with addiction, coercing them into bogus treatment. They’re engaging in human trafficking. They’re abandoning them far from home. They’re targeting our tribal communities for profit. This is really the most reprehensible kind of corruption if you prey on our Native American families in this state.”

Brown’s office has referred parts of the case to the FBI and the U.S. Attorney’s Office for potential criminal prosecution.