North Idaho nonprofit executive director sentenced in Medicaid fraud case
CORRECTION: This article has been updated to remove a photo that depicted a person not involved in the Medicaid fraud case.
A North Idaho woman is facing probation and must pay restitution after pleading guilty to public assistance provider fraud for stealing more than $150,000 in Medicaid funds targeted for a nonprofit that offers disability services for children.
The Idaho Attorney General’s Office announced that 49-year-old Tracy Hofius was sentenced on Jan. 21 to three years of supervised probation and likely will lose her Medicaid provider credentials after agreeing to plead guilty to one count of public assistance fraud, which is a felony that can carry prison time.
Hofius was the executive director of North Star Child Development Center, a Couer d’Alene nonprofit that provides developmental disability services to people covered by Medicaid. A press release from the AG’s office said that between 2022 and 2023, Hofius adjusted and submitted incorrect billing information to the Idaho Department of Health and Welfare for reimbursement from the state’s Medicaid program.
Organizations that offer services to individuals covered under Medicaid apply to be state-approved providers so they receive reimbursement for costs related to the services, according to the DHW website. The release said many services for which Medicaid provided funds were not actually provided by Hofius or any other employees at the North Star center.
Hofius pleaded guilty last November. In addition to probation, she was ordered to pay $154,119 in restitution to the Idaho Medicaid program; complete 120 hours of community service; and perform 45 days of work for the Kootenai County Sheriff’s Community Labor Program.
Public assistance provider fraud is not a common charge filed in Idaho. According to the Idaho Judicial Branch database, only three charges were filed related to that crime in 2025, and 14 were filed in 2024, with one ending in a conviction.
“When the Legislature gives my office authority to investigate fraud, we get results,” Attorney General Raul Labrador said in the release. “This defendant stole $154,000 by billing for services never provided to children with disabilities.”
This story was originally published January 30, 2026 at 4:00 AM.
