Lori Butts, 49, who ran Lordan Care Adult Family Homes in the Milwaukee area, was sentenced to 28 months in federal prison and must repay $1,253,920.47 to Medicaid. The U.S. Attorney’s Office for the Eastern District of Wisconsin says she billed for caregiver hours that were never provided to residents covered by Medicaid. U.S. District Judge J.P. Stadtmueller imposed the sentence Oct. 22.
The offense period runs from July 2019 through December 2020. The release says Butts admitted to billing for care that was never delivered, and it describes the conduct as a healthcare fraud scheme. Her adult family home business is now closed.
For families with a relative in this kind of home, the case answers a practical question: what was actually being paid for. Medicaid authorizes residential services for each beneficiary, and in these homes that meant a multi-bedroom apartment with 24-hour caregiver supervision, and for some residents one-on-one care. Anyone choosing or already using a home like this has a reason to look at how staffing is documented.
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What did Butts bill for that never happened?
According to the release, she billed Medicaid for two workers providing dedicated 24-hour care to a single resident. Those caregivers were not there. The homes were severely understaffed and had frequent police contact, often when staffing was too low to manage residents’ volatile or inappropriate behavior.
BizTimes Milwaukee reported that Lordan, based in West Allis, held contracts with Community Care Inc., a Brookfield managed care organization that received Wisconsin Medicaid funds. The contracts set the number of caregivers per resident, and Butts told employees to schedule that number but regularly provided fewer, the indictment says.
What did the judge and agents say?
Judge Stadtmueller called the conduct “reprehensible,” said “the taxpayers were bilked” and described the billing as the “functional equivalent of grand larceny.” Brad D. Schimel, the First Assistant U.S. Attorney, said the Justice Department “is laser focused on punishing those who defraud our federal healthcare benefit programs.”
Alan Karr, the FBI Milwaukee special agent in charge, said “if you steal from American citizens, justice will find you.” Robert J. Kuszynski, acting special agent in charge of IRS Criminal Investigation’s Chicago Field Office, said “behind every claim is a promise to care for someone.” Assistant U.S. Attorneys Carter B. Stewart and Zachary J. Corey prosecuted the case.
Who pays when Medicaid is billed for care that was not given?
The restitution order sends $1,253,920.47 back to Medicaid, the program that covers long-term care for people who meet their state’s eligibility rules. The residents in these homes were the ones short of caregivers, and the money was taxpayer money. Reports of suspected Medicare or Medicaid fraud can go to the HHS Office of Inspector General through its online complaint form or by calling 1-800-HHS-TIPS.
The inspector general’s office asks for the names and contact details of the people involved, a narrative of what happened, any witnesses and any electronic evidence. It also says it rarely steps into personal or civil grievances, and advises anyone who wants a refund or benefits to pursue other remedies. The hotline takes complaints about fraud, waste and abuse in Medicare, Medicaid and other HHS programs.
The wider issue for older families is who pays for long-term care in the first place. Medicare says it does not provide long-term care coverage or custodial care unless medical care is needed, and that Medicare and most health insurance, including Medigap, do not pay for long-term care services, including care in a nursing home or in the community. Medicaid may cover it, but only for people who meet eligibility requirements in their state. Medicare says people pay all costs for services it does not cover, which includes most long-term care.
Do you know how a parent’s care would be paid for?
Medicare does not cover most long-term care, which leaves families to find the money themselves or lean on Medicaid, whose rules look back at what a person gave away. The plan is easiest to make before a fall or a diagnosis forces it.
Protect Your Savings From Care Costs is a 10-page guide that shows what Medicare pays for nursing care, and what it won’t, along with the four ways care gets paid for, side by side. It also covers Medicaid’s 5-year look-back before you give anything away, and how the at-home spouse is protected, with the 2026 numbers.
See what Medicare will not pay for care, and Medicaid’s 5-year look-back, in the care-costs guide →
This article was produced with AI assistance and edited for accuracy against the sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
