Fred Grimm

South Florida con artists turn ‘sober homes’ into insurance scam

Residents on Seaspray Avenue in Delray Beach complained about this $3 million sober home.
Residents on Seaspray Avenue in Delray Beach complained about this $3 million sober home. Palm Beach Post

What the hell is it about South Florida and drug-addiction profiteering?

First we spawned a national opioid epidemic, allowing some 200 sham pain clinics to dispense oxycodone pills like Skittles. Cash-only pill mills, most of them operating out of strip shopping centers in Broward, Palm Beach and Miami-Dade counties (no insurance allowed) peddled 8.2 million oxy tablets in 2009 alone. Florida claimed all 50 of the nation’s top 50 docs who prescribed that highly addictive narcotic.

Through the first decade of the 21st century, South Florida’s pill mills supplied the bulk of the oxycodone behind an addiction epidemic that still ravages Appalachia and America’s rust belt. When Florida finally cracked down on its freewheeling pain clinics, the nation’s oxy addicts turned to cheap Mexican heroin. And lately, to fentanyl, a synthetic heroin and another South Florida speciality.

All of which led to our latest drug-addiction scam — faux “sober homes,” group homes for recovering addicts in league with substance-abuse treatment programs that are hardly more than vehicles for insurance fraud.

Hundreds of barely regulated sober homes have proliferated in Palm Beach and Broward counties over the past decade. Many are tied into very lucrative addiction-treatment programs exploiting well-meaning federal laws that put behavioral disabilities (including alcohol and drug addiction) on par with physical handicaps. And make them eligible for medical insurance coverage.

“Over the past, bad actors have been using these laws to hide their exploitation of the very people that these laws were meant to protect,” a Palm Beach grand jury warned in a special report issued last month. “This is especially true in the business of recovery housing, where many unregulated homes have become unsafe and overcrowded ‘flophouses,’ where crimes like rape, theft, human trafficking, prostitution, and illegal drug use are commonplace.”

The grand jury described a kind of lowdown medical tourism designed to exploit the drug epidemic. Desperate parents, reacting to deceptive advertising, ship their addicted children to South Florida treatment programs. What their kids get, according to the grand jury, is rank exploitation.

Sleazy operators make millions by billing insurance carriers for useless drug tests. The Palm Beach Post, which exposed the sober house racket in a stunning investigative series that began in 2015, described how operators were making thousands on routine urine tests that should have cost no more than $10 or $20.

After the Post series, Palm Beach State Attorney Dave Aronberg created the state’s (maybe the nation’s) first sober house task force. So far the task force has busted 10 drug treatment and sober home operators, most of them for illegal patient brokering. The latest was Leonard R. Dobard, 49, of the House of Chance group home in Boynton Beach, charged Wednesday with accepting thousands of dollars in bounties for delivering patients to the Whole Life Recovery treatment center. (Owner, James Kigar, 55, who was arrested in October, has been charged with 95 counts of patient brokering.)

Federal investigators, carrying out their own sober home sleaze sweep, arrested six industry operatives last month, including two doctors, tied to treatment centers in Broward and Palm Beach counties.

The feds said the centers were run by Kenneth Chatman, 46, a notorious ex-con, who was accused of coercing “female patients and residents into prostitution, telling them that they need not pay rent or participate in treatment or testing so long as they would allow him to continue to bill their insurance companies for substance abuse treatment and testing that the patients did not receive.”

And there was more. Chatman, according to federal prosecutors, “engaged in various tactics to keep patients from being able to leave” his programs, “including threatening violence, and confiscating their belongings, such as car keys, telephones, medications, and food stamps, in order to maintain the ability to continue fraudulently billing the insurance companies.”

Sober house operators have also exploited federal disabilities laws that prevent local governments from using zoning laws to ban or limit the number of group homes in residential neighborhoods. Towns like Boynton Beach and Delray Beach have become the unwilling host to hundreds of sober homes, some taking over expensive houses in gated communities. According to the Post, the sober homes often dump out-of-state addicts onto local streets after their insurance dries up. They become instant local social burdens.

There was a familiar name among the treatment industry pirates swept up by the Palm Beach County Sober Home Task Force. Christopher Lee Hutson, 36, who was charged with patient brokering in October, had pleaded guilty back in 2011 to another set of racketeering charges.

The Wellington man had been implicated in an infamous pain clinic operation that had peddled 20 million oxycodone pills in Broward and Palm Beach counties.

Hutson, like so many other of South Florida’s other drug industry con artists, had exploited the addiction crisis coming and going.