Kentuckians convicted in $4.8 million Medicaid fraud scheme at treatment centers

Taylor Six, Lexington Herald-Leader on Jul 27, 2026

By clicking submit, I authorize Arcamax and its affiliates to: (1) use, sell, and share my information for marketing purposes, including cross-context behavioral advertising, as described in our Privacy Policy , (2) add to information that I provide with other information like interests inferred from web page views, or data lawfully obtained from data brokers, such as past purchase or location data, or publicly available data, (3) contact me or enable others to contact me by email or other means with offers for different types of goods and services, and (4) retain my information while I am engaging with marketing messages that I receive and for a reasonable amount of time thereafter. I understand I can opt out at any time through an email that I receive, or by clicking here

LEXINGTON, Ky. — Three people were convicted and sentenced for nearly $5 million worth of Medicaid fraud at Kentucky addiction treatment clinics, the Department of Justice announced Friday.

A Texas businessman, a Kentucky doctor and another Kentucky woman were sentenced to prison for wrongly billing Medicaid and Medicare at multiple Kentucky Addiction Centers facilities.

Jose Alzadon, 62, of Paintsville, was sentenced to five years in prison in February. Barbie Vanhoose, 63, of Van Lear, was sentenced to two years in prison in January, according to a press release.

Michael Bregenzer, 53, of Houston, was sentenced Friday to serve four years in prison.

Evidence presented at a trial showed the three “ran a scheme” to bill Medicaid and Medicare for services that were not provided or were billed for more complex and expensive services than what patients received, according to the DOJ.

The three falsely billed under Alzadon’s father’s Drug Enforcement Administration credentials when services were not provided by Alzadon, his father, or at all.

They also used the father’s prescribing token to prescribe Suboxone, even though the father had not seen the patients for which his number was being used to prescribe.

The three were convicted after a March 2025 trial for a charge of conspiracy to commit health care fraud, eight counts of health care fraud and conspiracy to distribute controlled substances using the registration number of another person.

Alzadon and Vanhoose were convicted of two additional counts of aggravated identity theft, according to the DOJ.

In addition to their sentence, all three owe $812,881.09 in restitution.