Skip to main content

Are you a legal professional? Visit our professional site

Search for legal issues
For help near (city, ZIP code or county)
Please enter a legal issue and/or a location

Sober Home Scheme Sting Leads to Multiple Arrests

Article Placeholder Image
By George Khoury, Esq. on January 05, 2017 2:56 PM

Despite the rigorous regulations designed to protect against fraud in the medical and drug treatment industry, greedy individuals will always find ways to perpetrate scams. In Palm Beach, Florida, operators of sober homes, also known as halfway homes, as well as drug treatment centers, have been swept up in a recent sting operation designed to target a dangerous unregulated nexus between the two types of facilities. Sober homes have operated largely unregulated in Florida, and as a result, have been ripe for criminals looking to take advantage of the system.

Over ten individuals have now been arrested thus far in the Florida sting. Most of the arrests are centered around the crime of patient brokering and insurance fraud. Patient brokering involves medical facilities, like drug treatment centers, paying other facilities, such as sober homes, kickbacks, or referral fees, for sending patients with good insurance their way.

Brokering Bad Apples

While some people may not see a problem with paying referral fees, or providing kickbacks, it is in fact against the law (and apparently many sober home operators are completely unaware of that fact). The drug treatment centers, which illegally paid sober home operators, would also attempt to max out a patient's insurance claims by charging exorbitant amounts for routine things like drug testing.

Surprisingly, after law enforcement raided one drug treatment center that was providing illegal kickbacks to sober home operators that sent it patients, multiple sober home operators were arrested. The raid was the result of a two year investigation by the FBI focused on patient brokering, insurance fraud, money laundering, and illegal kickbacks.

After the initial two arrests at the Whole Life Recovery drug treatment center of the owner, James Kigar, and an operations consultant, Chistopher Hutson, it was discovered that this one treatment center had paid out numerous kickbacks to sober home operators. Additionally, Whole Life Recovery, after discovering that the kickbacks were illegal, unsuccessfully attempted to disguise the kickbacks as payment for services. As a result, numerous operators of sober homes that received the kickbacks have been arrested.

Related Resources:

Find a Lawyer

More Options