Three charged under Utah False Claims Act in $951,000 Medicaid fraud scheme 

Salt Lake City, UT — Three individuals are facing felony charges after allegedly recruiting parolees and unhoused Utahns with promises of free housing, then billing the state nearly $1 million for drug treatment sessions that never took place.  

The Defendants, Johnny Antanio Hankston and Jalon Hankston, face one count each under the Utah False Claims Act for submitting more than $951,000 in false claims to Utah Medicaid between December 2023 and March 2025. Johnny Leonel Tellez also faces one count under the Utah False Claims Act, a second-degree felony, for aiding and abetting the scheme. The charges stem from operations at Second Chance Family Services, a Salt Lake County substance use disorder provider.    

“Defrauding Medicaid isn’t a paperwork problem — it’s theft from every Utahn who pays into this system and plays by the rules. These defendants treated a program meant to help vulnerable people as their own personal ATM. That ends now. We will claw back every dollar we can, and we will prosecute the people who took it,” said Attorney General Derek Brown. 

Second Chance allegedly recruited parolees, unhoused individuals, and individuals with substance use disorders by offering rent-free housing in exchange for their Medicaid information, then billed the state for therapy sessions that witnesses and former employees say never happened. No patient records were ever produced to show otherwise. 

“When we subpoenaed records, they couldn’t produce a single document showing a therapy session had ever taken place. They billed nearly a million dollars and had nothing to show for it. Through collaborative efforts with our office and the FBI, we have built a solid case to prove it, ” said Lane Olson, Acting Chief Investigator of the MFCU Division in the AG’s Criminal Department. 

This case was investigated by MFCU and the FBI using a multi-disciplinary team of special agents, auditors, attorneys, and paralegals. Throughout the investigation, MFCU also collaborated closely with the Utah Department of Health and Human Services and the Utah Medicaid program. These partnerships are vital for not only investigating and prosecuting cases of fraud, but also for identifying ways to strengthen policies and prevent future fraudulent behaviors. Kaye Lynn Wootton, MFCU Director, stated that, “substance use disorder provider fraud prevents Medicaid beneficiaries from getting the care they so desperately need and wastes valuable resources intended to reduce societal harms including addiction, homelessness and crime.” 

“As stewards of taxpayer funds, we take our responsibility to protect public resources seriously,” said Julie Ewing, State Medicaid Director. “Every dollar stolen through Medicaid fraud is a dollar taken away from vulnerable Utahns who need life-sustaining services. We are grateful for our strong partnership with the Attorney General’s Office MFCU and federal law enforcement to hold these bad actors accountable and ensure our Medicaid program remains strong, transparent, and secure.” 

The Utah Medicaid Fraud Control Unit, a Division of the Office of the Utah Attorney General receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $3,984,304 for federal fiscal year 2026. The State of Utah funds the remaining 25 percent. 

All defendants are presumed innocent until proven guilty.