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Ex-director sentenced after stealing funds meant for mental health support in Tuscola County, raising accountability concerns.
Former Peer Center Director Sentenced for Embezzlement of Public Funds
Tanya Hobson, a former director of the Tuscola County Peer Center, has been sentenced to six months in jail after pleading guilty to embezzling funds from the mental health support facility. The sentencing was handed down by Judge Jason Bitzer in Caro, Michigan, marking the latest legal action by Michigan Attorney General Dana Nessel’s office in a continued crackdown on health care fraud.
Hobson, 45, of Kingston, served as director of the Peer Center from May to December 2023. During that period, she was found to have diverted more than $1,000 of the organization’s funds for personal use. She pleaded guilty in March to one count of Embezzlement – Agent or Trustee of more than $200 but less than $1,000, and was ordered to pay $4,054.64 in restitution. At sentencing, she paid $2,000 toward that amount.
Michigan Medicaid Oversight Under Fire After Local Fraud Case
The Tuscola County Peer Center, affiliated with Tuscola Behavioral Health Systems, plays a critical role in supporting individuals receiving mental health services. It offers resources such as self-help tools, peer advocacy, and mutual support groups, funded primarily through Medicaid dollars.
Attorney General Nessel highlighted the broader impact of Hobson’s actions, noting that misused Medicaid funds directly harm vulnerable populations. “Embezzling Medicaid funds can have a direct impact on the people who rely on the program for essential health care,” she said in March.
The Peer Center’s operational funds—earmarked for supplies, outreach, and support services—were allegedly siphoned off by Hobson under the guise of administrative duties, which included collecting mail, managing grants, and overseeing program expenses.
Health Care Fraud Division: Michigan’s Watchdog in Action
This case was prosecuted by the Health Care Fraud Division (HCFD), a specialized unit within the Michigan Attorney General’s Office that focuses on Medicaid fraud. The division operates as Michigan’s federally certified Medicaid Fraud Control Unit, receiving $5.7 million in federal funding for 2025 and another $1.9 million from the state.
According to Dr. Rebecca Haffajee, a public health expert and attorney at the RAND Corporation, “Fraud within Medicaid systems undermines trust and siphons away resources that are already limited. Oversight mechanisms must evolve with the growing sophistication of misuse tactics.”
The sentencing underscores the state’s growing commitment to rooting out fraud in public health systems, particularly in regions like Michigan’s Thumb, where communities heavily rely on publicly funded health and support services.
Embezzlement in Rural Michigan Shows Cracks in Support Systems
Tuscola County, located in Michigan’s Upper Thumb region, faces unique challenges. With limited mental health resources and high dependency on Medicaid services, any disruption—like embezzlement—can significantly impact residents.
Local advocacy groups are now calling for increased transparency and third-party audits for centers receiving state and federal funds.
“We need more rigorous oversight, not just after the fact,” said Sara Winton, a regional mental health advocate. “This shouldn’t happen in communities where every dollar counts.”
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