North Idaho non-profit director sentenced for $154K Medicaid fraud
KOOTENAI COUNTY, Idaho (KIFI) — A North Idaho woman has been sentenced to three years of probation after orchestrating a scheme to defraud the state’s Medicaid program of more than $150,000.
On January 21, 2026, First District Judge Barry McHugh ordered Tracy Hofius, 49, of Coeur d’Alene, to serve three years of supervised probation and 45 days of community service through the Kootenai County Sheriff's Community Labor Program. As a condition of her sentence, Hofius must also pay $154,119 in restitution back to the Idaho Medicaid program.
The Fraudulent Scheme
Hofius served as the Executive Director of the North Star Child Development Center, a non-profit organization designed to provide developmental disability services to Idaho Medicaid participants.
On January 1st, 2022, Hofis was charged with fraudulently adjusting and submitting false information to the Idaho Department of Health and Welfare for reimbursement from the Medicaid program. Court documents indicate that North Star billed for several services that were never actually provided by Hofius or her staff.
According to Idaho Attorney General Raúl Labrador, Public Assistance Provider Fraud is a felony currently punishable by up to 15 years in prison, though at the time of Hofius’ fraudulent conduct in 2022 and 2023, the penalty was 5 years in prison.
Hofius entered a guilty plea on November 18, 2025. Beyond her probation and labor service, the guilty plea also allows the Federal Department of Health and Human Services to suspend her credentials as a Medicaid provider.
AG Labrador touted the sentence as a victory for his office and the Idaho Medicaid program.
"When the Legislature gives my office authority to investigate fraud, we get results," said Attorney General Labrador. "This defendant stole $154,000 by billing for services never provided to children with disabilities. We recovered every dollar and will continue pursuing anyone who defrauds Idaho's Medicaid program."
