ROGUE RIVER, ORE. — This town of 2,400, deep in Southern Oregon on the banks of the famed river of the same name, was once frequented by gold miners.

Recently, the town attracted a different sort of prospector.

Raymond Parenteau and his family arrived in Rogue River in 2017. Parenteau purchased 80 acres overlooking the town, called in a fleet of bulldozers, and got to work building what would become CJP Ranch.

He built massive decorative fountains, a swimming pool, and a million-dollar horse arena.

Neighbors say they once strolled through the property to watch herds of elk. But Parenteau fenced it off, installed cameras and “No Trespassing” signs, and hired a security firm. Armed guards patrolled in golf carts, neighbors say.

Speculation grew as to the source of Parenteau’s wealth and the need for such intense surveillance. It became a local mystery, a subject of frustration and gossip for residents of the subdivision that backed up to the ranch.

Was his family in the witness protection program? Had he won the lottery? Some didn’t believe Parenteau, 59, was on the up and up.

“It just was not making sense,” says Kristine Erb, a retired nurse who lives next to CJP Ranch. “Where are they getting all this money?”

The answer: Parenteau earned a fortune providing care to some of Oregon’s most severely disabled people, taking advantage of one of the fastest-growing government programs in Oregon.

He founded what became the state’s largest provider of caregivers for people with intellectual and developmental disabilities. During a 12-month period ending last summer, that company, called Rever Grand (French for “dream big”), billed the Oregon Department of Human Services $170 million.

It turns out, the Oregon Journalism Project has learned, that state officials believe Parenteau should never have been allowed to grow his company here.

Oregon appears now to be catching up.

On June 12, 2024, Josephine County prosecutors filed criminal indictments charging Parenteau and his wife, Jolene Sesso, with nearly two dozen counts of aggravated theft and making false claims for health care payments.

Last October, the Josephine County district attorney filed new indictments against the couple, adding more than a dozen new charges, including racketeering, money laundering and tax evasion. The documents name both Rever Grand and the nonprofit Parenteau operates on the ranch, the Foundation of Southern Oregon, as central to the scheme.

The state has yet to present evidence for its claims, leaving the question unanswered of how the couple allegedly stole what the state says is hundreds of thousands of dollars from the Department of Human Services—and to what extent the charges stem from the state’s belated realization that the company was being run by a man with a criminal past.

The couple has pleaded not guilty, and an attorney for the company told this reporter that the allegation of fraud is “simply not true” and that Rever Grand “is confident that the allegations will be shown to be meritless.”

Through dozens of interviews and a review of decades of court records, a picture emerges of the phenomenal growth of a company that now does business across Oregon, from Astoria to Klamath Falls to Baker City to Burns. And it is a business that grew because a state agency, DHS, had a regulatory apparatus so lax that it allowed a man previously accused of fraud to long run a company that’s billed the state hundreds of millions of dollars.

Rever Grand’s reach can be felt in all corners of the state—not just in Rogue River, but an hour northwest of Portland, in Columbia County, where Becki Bozart lives.

Bozart’s daughter, Molly, was born with a genetic disorder that causes seizures. When she was 4, her episodes became so severe that Molly was hospitalized for months. “It was like a forest fire went through her brain,” Bozart explains.

Molly lost her ability to speak and to walk. Now 34, she cannot eat, bathe or use the toilet unaided. She requires around-the-clock care and lives at home with her parents.

It’s like having a toddler who never grows up.

Nonetheless, Bozart has built a life for Molly. “We love her to death, she’s the joy of our lives,” says Bozart, who receives Medicaid dollars, administered by the state, to take care of her daughter.

At one time, Oregonians in Molly’s condition who could not afford private care were put in state-run institutions, the most notorious of which was known as Fairview, which Disability Rights Oregon says was the largest such facility in the nation. Opened in Salem in 1907 as the Oregon State Institution for the Feeble-Minded, the facility is now best known for the horrors within its walls. Hundreds of its residents were forcibly sterilized, and medical care was so lacking that the federal government sued in 1986 and then cut off funding.

Beginning in the 1980s, Oregon moved residents out of Fairview and, in 2000, finally closed it for good. Soon after, Oregon closed the rest of its “training centers,” as such institutions were known, becoming one of the few states in the country to do so.

At the time, Oregon had a plan. It was the first state in the country to apply for a waiver from the federal government allowing it to spend Medicaid dollars to provide care for people at home who would otherwise be institutionalized. And, three decades later, it was the second state to receive a new waiver that eliminated caps on those services, allowing Bozart to get approximately $60,000 a year to take care of her daughter because Molly, who has no income, qualifies for Medicaid.

“Once there was [enough] money—that really changed everything,” Bozart says. For people like Molly, she explained, “It was life-changing in a wonderful way.”

The state says it now spends around $910 million each year from the general fund on services for people with intellectual and developmental disabilities. The federal government then matches that sum by around 2 to 1. That means such services amount to about a $2.5 billion-a-year industry in this state, serving more than 33,000 disabled Oregonians.

At the very same time that the government expanded benefits for caregivers, Raymound Parenteau came to Oregon.

Parenteau, a network engineer from California with a deep tan and pearly white teeth, arrived in Oregon in 2013 with his wife, Jolene, and his son, Cody. (Parenteau has declined to speak to this reporter, and Rever Grand’s attorneys have not responded to OJP’s requests for comment since September.)

His family settled first in Grants Pass, where Cody enrolled in the local middle school. Cody, who was born with a severe form of autism, started receiving services under the new federal waiver, according to a report filed in court by Parenteau to retain guardianship of his son after Cody turned 18.

Before the creation of agencies like Rever Grand, Oregon ran a “brokerage” system of local organizations that assigned case workers to people with disabilities and connected them with caregivers, who were paid by the state. While they were not state employees, most of the caregivers belonged to the state’s largest public employee union, Service Employees International Union.

Oregon has long suffered from a lack of caregivers, particularly in rural areas. And the system couldn’t address the vast need.

The staff shortage deepened with the removal of the cap on payments in 2013. It not only increased the amount the state would pay each client—it also attracted more patients. Within five years, the state’s caseload rose 30% to nearly 28,000 adults and children.

According to a number of caregivers, the problem was compounded by the state’s outdated payroll and timekeeping system, which was universally despised. “It’s ridiculous,” Bozart says. “The technology…is overburdened, outdated and broken.”

Parenteau was an entrepreneur already, a network engineer who’d started a tech support company in Orange County. The recent changes had created new demand for caregivers, and Oregon’s system for providing them was ripe for disruption. He incorporated Rever Grand in September 2016.

Rever Grand was one of the first of a new wave of companies seeking to profit from the new state program. Parenteau’s company quickly distinguished itself by expanding statewide. Its rapid growth was fueled by the wages it paid its caregivers, which it trumpeted as the highest in the state.

In 2016, after having him fill out forms and go through a background check, the Oregon Department of Human Services granted Parenteau “provider agency” status, which allowed him to hire his own workforce independent of the state’s technology and payroll systems. In return, the state promised to reimburse him for the hours his new company’s caregivers worked.

“No more tedious paperwork to create and deliver, chasing down signatures or wondering when your check will arrive,” the company advertised on its website at the time. It promised prospective caregivers $16 an hour—which amounted to $4,300 more per year than what was offered by the state, the company said.

Parenteau recruited clients by attending resource fairs at local schools, according to Gwyn Lema, who runs a similar, smaller agency in Medford.

“That’s how he got so big,” Lema says. “He offered better pay.”

That was possible because for every hour a caregiver works, the state pays the company for more than just salary. This additional money, according to the economic model used to set the payment amount, is supposed to pay for benefits, training and other overhead.

But Parenteau figured out how to do all those things more cheaply than the state expected. It’s not clear how. Some say his company doesn’t offer the same benefits and services as the state. Others say he’s cut costs by streamlining a previously bloated state system. Regardless, he used the extra money both to pay higher wages—and make a profit.

The result is that Rever Grand advertises a significantly higher wage than the union (see “Enemy of the State,” below).

The company now pays a base wage, statewide, of $24 an hour. As of Jan. 1, the equivalent for unionized state workers doing the same work is $20.

By 2024, Rever Grand had more than 2,100 clients and collected over $170 million of annual revenue from the state. In recent years, Parenteau has purchased over $5 million in property in Southern Oregon and the mountains of Nevada and along the Oregon Coast.

But as Raymond Parenteau’s empire grew, he was hiding a secret.

More than a decade earlier, in Prescott, Ariz., Parenteau was accused of fraud by the local school district and ultimately pleaded guilty to a felony in Yavapai County Superior Court.

The case generated reams of court records and extensive coverage in the local newspaper. The dispute centered on Parenteau’s demand for additional tutoring for his son.

After Parenteau sued, the district agreed to pay for a private tutor. But after the district found out that Parenteau was pocketing over half the money, police arrested him on accusations of fraud.

In court, Parenteau said he’d been paying himself to tutor Cody in computer science and equestrian therapy. He ultimately pleaded guilty to a single lesser felony of falsifying a public record and served a year of probation.

But despite evidence of Parenteau’s legal troubles being a Google search away, the division of the Oregon Department of Human Services that regulates Rever Grand, the Office of Developmental Disabilities Services, says it wasn’t aware of Parenteau’s prior conviction when it approved his license in 2016.

Two years later, in 2018, the truth finally dawned. DHS said Parenteau had violated state rules. His “failure to disclose a criminal conviction” had violated a rule requiring that applications “provide complete, accurate, and truthful information during the application process,” says the notice of nonrenewal sent out by the state and obtained by WW.

It also said Parenteau’s criminal past alone was sufficient grounds for not renewing his company’s license, again citing rules that allow the state to revoke a license if an owner “has been convicted of a crime associated with the operation of an agency or program services.”

But Rever Grand did not end up losing its license. Instead, Parenteau signed a settlement agreement with the agency, took a $1.1 million severance package from Rever Grand, according to a financial audit, and handed over his stake in the company, which became majority owned by his wife. Shortly thereafter, she submitted a business filing to the Secretary of State’s Office officially removing her husband’s name from the company.

Five years later, however, DHS accused Parenteau of not abiding by the agreement and still having a role at Rever Grand. The agency briefly banned the company from enrolling new clients until it found a third party to oversee its finances.

Separately, the Oregon Department of Justice has built a criminal case against Parenteau and his company.

Last year, a DOJ lawyer signed indictments charging the company with making a false claim for health care payments and Parenteau and his wife with racketeering, theft, money laundering and state tax evasion.

The most detailed allegations levied by prosecutors involve Parenteau’s criminal history and his ongoing involvement with the company: that Parenteau made “an attempt to defraud” on his initial application for Medicaid funds and that his wife, Jolene Sesso, committed perjury on the state business filings in 2019 when she scrubbed her husband’s name from the company.

It’s not clear to what extent the charges of theft and subsequent laundering of state money stem from these allegations.

“There is no indication that Mr. Parenteau stole any funds from DHS; rather, the discovery only shows that DHS paid Rever Grand for legitimate services actually provided to Medicaid recipients,” his attorneys wrote Dec. 13 in an attempt to get the charges thrown out, after reviewing documents provided to them by the prosecution.

The couple has pleaded not guilty. Regardless, Parenteau and Sesso now face the prospect of prison sentences.

Despite all this, the state is still doing business with Rever Grand after the Oregon Health Authority found that pulling its funds could jeopardize care of the company’s clients. The agency says it’s monitoring the legal cases and will reevaluate “as the situation develops.”

Rever Grand’s corporate headquarters is located in a strip mall off of Interstate 5 in Grants Pass. It’s sandwiched between an Army recruitment center and a cellphone repair shop. The median in the parking lot contains a putting green. “Dare to Dream Big,” the company’s motto, flashes on the mall’s digital signboard between ads for a spray tan salon.

On a recent winter morning, chief operating officer Kristi Bonham told this reporter that the notion that Rever Grand was falling apart was “offensive.” Bonham declined to answer specific questions, and the company’s attorney didn’t reply to a phone call or repeated emails.

There are now hundreds of agencies licensed by the state to provide caregiving services at home for people with disabilities—and a backlog of nearly 300 new applications for more. While none is so big as Rever Grand, the next five largest each pull in more than $20 million a year. Almost all are homegrown, and according to the most recent audits submitted to the state, one has a profit margin of 31% (Rever Grand’s was 19%).

Last year, the second largest, DSP Connections, trumpeted its ranking of 172nd on Inc. magazine’s list of fastest-growing private companies in the United States. Its owners, a couple living in Aumsville, a small town outside Salem, also run a trucking company.

Bozart works for Rever Grand and had good things to say about it. But she’s already found another agency just in case, a local one run by a woman she trusts.

She’s more worried that the fallout won’t end with Rever Grand. “People should be afraid,” she says. “As Rever Grand goes, so goes the agency model in Oregon.”

The saga of Rever Grand, says state Sen. Sara Gelser Blouin (D-Corvallis), illustrates the importance of effective state oversight, which she believes is lacking.

“Rever Grand—and some other programs—are bad actors that are vacuuming up funds,” Gelser Blouin says.

“Who loses in this process ultimately are people with intellectual and developmental disabilities,” she goes on. “Because it undermines trust in the system, and it makes a system that is truly struggling for resources appear that it is overfunded.”

Meanwhile, Parenteau has expanded his real estate holdings. A 2022 purchase nearly doubled the size of his ranch—and early last year he acquired a $2.4 million condo at a beach club on Lake Tahoe in Nevada.

This story was produced by the Oregon Journalism Project, a nonprofit investigative newsroom for the state of Oregon. (OJP would like to thank the Heatherington Foundation for Innovation and Education in Health Care for its support.) OJP’s stories appear in partner newspapers across the state. Learn more at oregonjournalismproject.org.

Enemy of the State

Raymond Parenteau’s success made him a powerful enemy: Service Employees International Union, the Salem powerhouse that represents 72,000 workers—including more than 10,000 caregivers, doing the same job as Rever Grand’s employees but being paid significantly less.

“It’s been a personal attack since the day we opened the doors,” Rever Grand’s original Hawaiian investor, Greg McCaul, told the Oregon Journalism Project last summer. “By a union.”

The union says it raised red flags after learning of Parenteau’s criminal history. “We became concerned that someone convicted of a crime and already charged with defrauding a public entity in another state started a company that was making money off Medicaid,” says Melissa Unger, executive director of SEIU Local 503.

SEIU has been unionizing the state’s home care workers since 2001. It now represents 26,000 of them, including “personal support workers,” the job classification for state-paid caregivers for people with intellectual and developmental disabilities. They voted to join the union in 2011.

Since then, the union has fought to raise caregiver wages by bargaining contracts with the state. But those pay increases have not kept pace with the pay being offered by private agencies, like Rever Grand, which are funded more per hour by the state and have actively recruited away union members.

According to documents that SEIU shared with OJP, total pay to state-paid caregivers fell 12% in 2022, and 2% more the following year. That has financial ramifications for the union, which takes a percentage of its members’ pay as dues.

In 2023, union leaders sent a series of letters to state officials, decrying the state’s practice of paying companies like Rever Grand so much.

“This is costing the state more money and there is no evidence that consumers are getting better services,” the union leaders wrote. “Effectively, the state is paying twice for health care, but agencies are just pocketing the amount they receive.”

Agencies like Rever Grand, says state Sen. Sara Gelser Blouin (D-Corvallis), are supposed to relieve family members of the burden of recruiting, scheduling, training and supervising caregivers.

Instead, she says, some are simply pocketing the extra cash. “Some companies were taking advantage of that rate model. They were still making the families do all the work except for the paycheck,” Gelser Blouin says. “They weren’t providing all of those extra services—and they were using that to make a profit.”

Whether such concerns led the state to crack down on Rever Grand is unclear.

But the union did demand an investigation in 2023. The report it sent to state lawmakers described Parenteau’s prior criminal history. “The illegal Rever Grand practices—as well as its principals’ financial malfeasance—should certainly be investigated,” it said.