Santa Ana, California - Over the past 10 months, the Department of Justice has filed criminal charges against 10 defendants – four of whom were taken into custody Thursday – for kickback schemes at substance abuse treatment facilities in Orange County.
The defendants in these cases charged as a result of The Sober Homes Initiative are substance abuse facility owners and patient recruiters who allegedly, among other things, provided kickback payments for the referral of patients to substance abuse treatment facilities, recovery homes or laboratories. These facility owners allegedly assigned a value to patients depending on the type of insurance the patients had, and then paid patient recruiters kickbacks for each patient the recruiters referred to their addiction treatment facilities. The recruiters allegedly received recurring payments for each month the patients continued to receive purported services from the facilities.
“Driven by greed, dishonest operators of substance abuse treatment centers have invaded Southern California, but a coalition of law enforcement entities have responded forcefully,” said U.S. Attorney Tracy L. Wilkison. “These corrupt individuals pay illegal kickbacks to obtain insured patients whose health plans pay generous benefits intended to cover legitimate treatments and tests. While many recovery facilities offer much-needed services to addicts, those targeted in this sweep take advantage of our nation’s opioid crisis by fueling a patient-selling network more interested in generating profits than giving help to vulnerable people.”
“These cases reflect the continued efforts of the Department of Justice to combat fraud by substance abuse treatment facilities and patient recruiters,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “These schemes take advantage of vulnerable members of our society – addiction patients seeking help. These cases illustrate, the government’s commitment to protecting patients and prosecuting those who try to victimize them.”
“Fraudulent kickbacks in the substance abuse treatment field create perverse incentives for patient recruiters that oftentimes leave addicts in a toxic cycle of drug use and treatment,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI is committed to fighting fraud in the healthcare system so that those struggling with addiction can find legitimate care and encourages patients and employees to report kickback schemes.”
“It is unconscionable when owners and operators of substance abuse facilities abuse the systems designed to help patients recover from addiction,” said Special Agent in Charge Amy K. Parker of the Office of Personnel Management Office of the Inspector General (OPM-OIG). “We are extremely proud of our dedicated staff and federal law enforcement partner’s commitment to pursuing improper and illegal conduct that places vulnerable health care consumers at risk.”
“The suspects in this case specifically targeted vulnerable individuals in recovery and sold them as a commodity with no concern for their health or wellbeing,” said California Insurance Commissioner Ricardo Lara. “Receiving kickbacks for patient referrals endangers lives and has no place in our health care system.”
Cases charged as a result of The Sober Homes Initiative
- Nick Roshdieh, 51, of Aliso Viejo, and Vincent Bindi, 66, of Laguna Nigel, who owned Crest Recovery LLC (dba Truvida Recovery), were arrested this morning on charges contained in an indictment that allege conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and paying kickbacks for referrals to clinical treatment facilities.
- Donald Vawter, 30, of Rancho Santa Margarita, an employee of Truvida, was also taken into custody today and was charged in the indictment with conspiring to pay and receive kickbacks for referrals to a substance abuse treatment facility and paying kickbacks for referrals to a substance abuse treatment facility.
- Michael Hislop, 56, of Boston, Massachusetts, a patient recruiter, also was taken into custody today pursuant to charges in the same indictment that allege conspiracy to offer and pay kickbacks for referrals to a substance abuse treatment facility and receiving kickbacks for referrals to a substance abuse treatment facility.
If convicted, Roshdieh and Bindi would face a maximum total penalty of 65 years in prison, and Vawter and Hislop would face a maximum total penalty of 35 years in prison.
This case is being prosecuted by Assistant U.S. Attorney Gina Kong of the Santa Ana Branch Office and Trial Attorney Alexandra Michael of the Los Angeles Strike Force.
- Casey Mahoney, 45, of Los Angeles, and Joseph Parkinson, 32, formerly of Costa Mesa, were indicted in October in a multimillion-dollar addiction treatment kickback scheme. According to court documents, Mahoney controlled Healing Path Detox LLC and Get Real Recovery Inc., addiction treatment facilities in Orange County, and allegedly paid approximately $2.7 million in kickbacks paid to Parkinson and other patient recruiters in exchange for addiction treatment patient referrals.
Mahoney is charged with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities, paying kickbacks for referrals to clinical treatment facilities, and money laundering for fraudulently transferring kickback funds to an account held in the name of a patient broker’s mother. Parkinson, a patient recruiter, was charged with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities, receiving kickbacks for referrals to clinical treatment facilities, currency structuring, and possession with intent to distribute fentanyl.
If convicted, Mahoney would face a maximum total penalty of 35 years in prison, and Parkinson would face a maximum total penalty of 165 years in prison.
- Darius Moore, 28, formerly of Santa Ana, was charged by complaint on March 29, and later by indictment on April 28, with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and receiving kickbacks for referrals to clinical treatment facilities. According to court documents, Moore, a patient recruiter, referred patients to multiple addiction treatment facilities in Orange County in exchange for kickback payments from the facilities. Moore allegedly received not less than $488,500 in kickbacks in exchange for his referral of patients for purported addiction treatment services.
Moore pleaded guilty on December 10 to one count of conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and one count of receiving kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on May 13, 2022, at which time he will face a statutory maximum penalty of 15 years in prison.
- Adrian Gonzalez, 37, of Laguna Hills, was charged by information on June 25, with paying kickbacks for referrals to clinical treatment facilities. According to court documents, Gonzalez controlled Stone Ridge Recovery Inc. and Landmark Recovery LLC, addiction treatment facilities in Orange County, and paid at least $1,080,000 in kickbacks to patient recruiters for the referral of addiction treatment patients to Gonzalez’s facilities.
Gonzalez pleaded guilty on August 6 to paying kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on Jan. 28, 2022, at which time he will face a maximum penalty of 10 years in prison.
- Dorian Ballough, 30, formerly of Costa Mesa, was charged by information on July 30 with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and receiving kickbacks for referrals to clinical treatment facilities. According to court documents, Ballough acted as a patient recruiter for multiple addiction treatment facilities in Orange County, for which Ballough was paid at least $1.8 million in kickbacks in exchange for his referral of patients for purported addiction treatment services.
Ballough pleaded guilty on November 12 to one count of conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and one count of receiving kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on April 8, 2022, and faces a maximum total penalty of 15 years in prison.
- Kyle Reed, 29, formerly of Huntington Beach, was charged by information on July 30, with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and receiving kickbacks for referrals to clinical treatment facilities. According to court documents, the charges relate to Reed’s role as a patient recruiter for multiple addiction treatment facilities in Orange County, for which Reed was paid at least $604,474 in kickbacks in exchange for his referral of patients for purported addiction treatment services.
Reed pleaded guilty on November 19 to one count of conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and one count of receiving kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on May 6, 2022, and faces a maximum total penalty of 15 years in prison.
All of the cases, with the exception of the Truvida-related matter, are being prosecuted by Assistant U.S. Attorney Benjamin Barron, Chief of the Santa Ana Branch Office, and Trial Attorney Justin Givens of the Los Angeles Strike Force.
A federal district court judge will determine any sentence for the defendants after considering the U.S. Sentencing Guidelines and other statutory factors.
The Sober Homes Initiative in Southern California is led by the United States Attorney’s Office and the Health Care Fraud Unit’s Los Angeles Strike Force of the Criminal Division’s Fraud Section. The initiative was coordinated by Assistant United States Attorney Benjamin Barron and Assistant Chief Niall O’Donnell of the Health Care Fraud Unit.
The FBI’s Los Angeles Field Office, OPM-OIG, and the California Department of Insurance are investigating the cases announced today.
An indictment contains allegations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.