Los Angeles, California - Over the past 10 months, the Department of Justice has filed criminal charges against 10 defendants for kickback schemes at substance abuse treatment facilities in Orange County, California.

The defendants in these cases 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 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.

“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.”

“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 for the Central District of California. “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.”

“The defendants in these cases were more interested in extracting profits and exploiting patients than helping those in need,” said Acting Assistant Director Jay Greenberg of the FBI’s Criminal Investigative Division. “Kickback schemes undermine the integrity of our health care system by rewarding a focus on profits over patient care. The FBI and our law enforcement partners are committed to protecting America’s health care system and the citizens relying on it.”

“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.”

Case Summaries

• According to court documents on Dec. 16, Nick Roshdieh, 51, of Aliso Viejo, California, and Vincent Bindi, 66, of Laguna Nigel, California, owned Crest Recovery LLC, dba Truvida Recovery (Truvida), and were arrested after being charged by indictment on Dec. 15 with 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, California, was an employee of Truvida 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, was also charged in the indictment with 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 face a maximum total penalty of 65 years in prison, and Vawter and Hislop face a maximum total penalty of 35 years in prison. The cases are being prosecuted by Trial Attorney Alexandra Michael of the Los Angeles Strike Force and Assistant U.S. Attorney Gina Kong of the Santa Ana Branch Office.
• Casey Mahoney, 45, of Los Angeles, and Joseph Parkinson, 32, formerly of Costa Mesa, California, were charged by indictment on Oct. 6 for 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 faces a maximum total penalty of 35 years in prison and Parkinson faces a maximum total penalty of 165 years in prison. The case is 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.
• Darius Moore, 28, formerly of Santa Ana, California, 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 and was paid not less than $488,500 in kickbacks in exchange for his referral of patients for purported addiction treatment services. On Dec. 10, Moore pleaded guilty 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, and faces a maximum total penalty of 15 years in prison. The case is 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.
• Adrian Gonzalez, 37, of Laguna Hills, California, 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. On Aug. 6, Gonzalez pleaded guilty to paying kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on Jan. 28, 2022, and faces a maximum penalty of 10 years in prison. The case is 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.
• Dorian Ballough, 30, formerly of Costa Mesa, California, 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. On Nov. 12, Ballough pleaded guilty 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. The case is 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.
• Kyle Reed, 29, formerly of Huntington Beach, California, 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. On Nov.19, Reed pleaded guilty 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. The case is 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 Health Care Fraud Unit’s Los Angeles Strike Force of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California, and was coordinated by Assistant Chief Niall O’Donnell of the Health Care Fraud Unit and Benjamin Barron, Chief of the U.S. Attorney’s Office’s Santa Ana Branch Office. 

The FBI Los Angeles Field Office, OPM-OIG, and the California Department of Insurance are investigating the cases.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.