Phenix City boarding school agrees to repay $300,000 to settle fraud case
A boarding school in Phenix City has agreed to repay $300,000 in Medicaid funds.
As part of the 2026 National Healthcare Fraud Takedown, the U.S. Attorney’s Office for the Middle District of Alabama in Montgomery reached a settlement with Alfonza Smith, 72, of Smiths Station, the Alabama Office of the Attorney General has announced.
Smith, owner of Teen University in Phenix City, contracted with the Alabama Department of Human Services to provide room, board and services to children with emotional or behavioral management problems, according to the attorney general’s office.
“Under the contract,” the news release says, “Teen University agreed to provide two hours of Basic Living Skills per resident per day.”
The Attorney General’s Medicaid Fraud Control Unit conducted an investigation following a referral from the Alabama Medicaid Agency’s Program Integrity Unit, according to the news release, and determined the required two hours of Basic Living Skills weren’t being routinely provided to residents.
“The Medicaid Fraud Control Unit referred its findings to the U.S. Attorney’s Office, and a Federal False Claims Act lawsuit was initiated,” the news release says. “The matter was resolved with Teen University, which is no longer a Medicaid provider, agreeing to repay $300,000 to the Agency.”
Alabama Attorney General Steve Marshall said in the news release, “The National Healthcare Fraud Takedown exists because fraud in government healthcare programs is a serious, ongoing threat. When providers take taxpayer money without delivering the services they promised, we will find them, and there will be consequences. We will continue to pursue those who defraud government healthcare programs, and we are proud to stand alongside our federal partners in this important national effort.”
This case is among the charges against 455 defendants across the United States for alleged participation in healthcare fraud and opioid abuse schemes involving over $6.5 billion in false claims and “significant patient harm, including death,” according to the U.S. Justice Department’s report on the 2026 National Health Care Fraud Takedown.
