Arizona CEO and Accomplice Charged with Embezzling Millions of Dollars from Tribal Healthcare Provider

TUCSON, Ariz. – On December 14, 2023, a federal grand jury returned a 40-count indictment against Kevin McKenzie, 47, and Corina Martinez, 41, of Tucson. McKenzie and Martinez were charged with Conspiracy to Embezzle from an Indian Tribal Organization; Embezzlement; Theft Concerning Programs Receiving Federal Funds; Wire Fraud; Conspiracy to Commit Wire Fraud; Conspiracy to Commit Money Laundering; and Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity. McKenzie was also charged with Attempted Tampering with a Witness. 

The indictment alleges that, from 2015 through July 2023, McKenzie, first as Chief Operating Officer and then as CEO of Apache Behavioral Health Services (ABHS), engaged in a scheme to defraud millions of dollars from ABHS. ABHS is organized by and under the laws of the White Mountain Apache Tribe to provide behavioral health services to its members. McKenzie used two contracts as a front to funnel money from ABHS to himself. Under the first contract, ABHS paid over $32 million to Helping Everyday Youth (HEDY). Thereafter, based on an agreement with McKenzie, HEDY funneled over $14 million in fraudulent proceeds to a shell company McKenzie owned. McKenzie concealed this backdoor financial arrangement from ABHS. McKenzie made significant efforts to hide his scheme through money laundering and attempted to persuade a witness to lie to investigators.  

The indictment also alleges that McKenzie, again as CEO for ABHS, and Martinez through her company Evolved, LLC, entered a phony “referral” contract to embezzle additional money from ABHS. Using this agreement, McKenzie caused ABHS to pay $15 million to a second Martinez company, Evolved Healthcare Inc. (EHI). Portions of the fraudulent proceeds were split amongst McKenzie and Martinez. Martinez gave McKenzie large sums of money, paid at least $800,000 of his personal credit card bills, and purchased other luxury items, including a $128,000 Rolls Royce Ghost and a $952,000 home for McKenzie’s family. EHI and Evolved LLC did not perform any services for ABHS.

An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

The Federal Bureau of Investigation conducted the investigation in this case. The U.S. Attorney’s Office, District of Arizona, Tucson, Financial Crimes and Public Corruption Section, is handling the prosecution.
 

CASE NUMBER:           CR-23-02258-TUC-SHR
RELEASE NUMBER:    2023-205_McKenzie/Martinez

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
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