Chatman defendant: Feds, state target sober homes together

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A recruiter for Kenny Chatman‘s drug treatment centers says his cooperation with state and local investigators led to about a dozen arrests.

A new federal court filing for Michael Bonds shows how defendants in several cases are being used against each other, as well as cooperation between federal and state officials trying to crack down on South Florida’s corruption-plagued sober home industry. Bonds’ attorney, Paul Walsh of West Palm Beach, said in a filing that he expects federal officials will also ask for leniency in the case because of Bonds’ cooperation.

Walsh wrote that in exchange for Bonds’ cooperation, Bonds and his wife have feared for their safety because of implied threats, “including a call from an individual whom Bonds provided information about, telling Bonds that he would ‘get his.'”

Bonds pleaded guilty in February to taking $240,000 from Chatman for referring patients to Chatman’s treatment centers. Chatman, Bonds and four other associates were arrested Dec. 21. The filing says Bonds has been helping investigators since August, and “has continuously provided assistance whenever called upon and as needed by the government.”

How far did that cooperation go? The filing says Bonds has been working with officials, including a Delray Beach Police Department investigator, to yield “results that are useful to the government.” A grammatically troubled sentence says he offered help on people in the recovery industry, and “This information led to prior to the arrest of at least nine individuals in State court and several individuals in this [federal] matter.”

Bonds is scheduled to be sentenced at 10 a.m. Monday in federal district court in West Palm Beach. He had been running Redemption Sober House Inc., and was getting about $500 a week for each patient he supplied to Chatman.

Chatman is scheduled to be sentenced next month. He admitted in federal court that he’d turned patients into prostitutes and, when they were supposed to be recovering from drugs, fueled their addiction.

While immediate associates of Chatman have been prosecuted in federal court, the Palm Beach County Sober Home Task Force has arrested at least 20 people for prosecution in state courts.

Mass. warns addicts about Florida drug-treatment recruiters

Massachusetts Attorney General Maura Healey has issued a consumer advisory, warning of unscrupulous marketers “trying to recruit Massachusetts residents with substance use disorder to travel to so-called treatment centers in Arizona, California and Florida.”

According to the advisory,  the recruiters often use texts or social media to recruit patients. Some offer to pay for airfare and health insurance to cover the costs of out-of-state treatment.

The Palm Beach County Sober Home Task Force has targeted such practices as inducements, which violate Florida’s anti-kickback and patient brokering laws.

Recruiters who target Massachusetts addicts often use texts or social media to recruit patients and offer to pay for airfare and health insurance to cover the costs of out-of-state treatment.

“According to some reports, the out-of-state treatment centers provide little or no care to the patients,” the advisory states. “In other instances, the recruiters have stopped paying insurance premiums, which has resulted in patients getting removed from treatment facilities and stranded out of state without access to housing, health care, or the financial resources to return to Massachusetts.”

The advisory makes the following recommendations to addicts contacted by marketers for out-of-state treatment facilities.

  • Be wary of unsolicited referrals to out-of-state treatment facilities. Anyone seeking to arrange for addiction treatment out-of-state may be getting paid by the treatment center.
  • Anyone paid a referral fee for recommending a particular treatment center does not have your best interests in mind.
  • Be wary of anyone offering to pay for your insurance coverage.  They can stop paying your premiums at any time, which will result in the cancellation of your insurance.
  • If you accept an offer by someone to pay for travel to an out-of-state clinic, make sure you have a plan and the means to pay for a trip back home.
  • Be careful about giving your personal information – including your social security number or insurance number – to a recruiter, unless you can confirm that the person is employed by a medical provider or insurance company.
  • If someone is offering to arrange travel or cover insurance costs for treatment, call the treatment facility or your insurance company to confirm that the person is an employee.

 

Owner of notorious drug treatment center pleads guilty today

Drug treatment center owner Kenneth “Kenny” Chatman pleaded guilty Wednesday to conspiracy to commit health care fraud, money laundering and conspiracy to recruit persons into sexual acts, a charge that could send him to prison for life.

His wife, Laura Chatman, pleaded guilty to two counts of falsifying and covering up the ownership of the treatment centers. She applied for state licensure for the facilities even though her husband, a felon, was the one owning and operating them. She faces up to 10 years in prison.

Their sentencing will be May 17 at 10 a.m.

Kenneth Chatman walks into Reflections, his treatment center in Margate in December, 2015.

Chatman had been charged with conspiracy to commit sex trafficking, money laundering and conspiracy to commit health care fraud. His wife had been charged with conspiracy to commit health care fraud and multiple counts of money laundering.

Chatman owned Reflections Treatment Center in central Broward County and operated sober homes throughout Palm Beach County. The places were notorious drug dens, with up to 90 percent of patients – who were supposed to be getting sober – doing drugs.

Chatman’s ties to prostitution were first exposed by The Palm Beach Post in December, 2015. Nearly a year later, federal authorities arrested him.

This is a developing story. Check back for updates.

State ethics board clears Palm Beach County Sheriff, two others

The Florida Commission on Ethics cleared Palm Beach County Sheriff Ric Bradshaw and his chief deputy on allegations he misused his position to investigate another candidate for sheriff.

The complaint was filed by former deputy Mark Dougan, a frequent thorn in Bradshaw’s side. He said he filed it about a year ago, before the FBI raided his home, prompting him to flee to Russia.

 

Palm Beach County Sheriff Ric Bradshaw speaks during a news conference on Monday, April 14, 2016. During the event, Florida Governor Rick Scott signed a ceremonial bill on a piece of victims’ rights legislation at the Palm Beach County Sheriff’s Office in West Palm Beach. (Joseph Forzano / The Palm Beach Post)

“For them to find no probable cause, when they’re on audio admitting to what they’re doing, the system is broken,” he said. “That’s all there is to it. They won’t hold anyone accountable.”

He said he gave the commission audio recordings of one of PBSO’s investigators, Mark Lewis, talking about going after the sheriff’s enemies.

One of them was Jim Donahue, who was investigated after speaking out about PBSO’s budget.

PBSO records show that in 2010, the department opened an investigation into Donahue, a week after he went before county commissioners with complaints about the department’s budget. He filed to run for office, but never appeared on the ballot. He was charged with four felonies stemming from discrepancies on his 2008 application to work at PBSO. Prosecutors dropped the charges.

Lewis was cleared by the ethics commission. The ethics commission also found no probable cause that Bradshaw “disclosed inside information for his personal benefit or for the benefit of another.”

The commission also found no probable cause that Bradshaw’s number two, Chief Deputy Michael Gauger, “misused his position to direct an investigation of a candidate or expected candidate for Sheriff and to recommend the filing of criminal charges against him.”

The board, which rules on ethics issues involving politicians and state employees, also found no probable cause that Gauger investigated others in Palm Beach County.

Bradshaw told The Palm Beach Post in early February that the ethics commission had already found no probable cause against him.

“I was told through my lawyers no probable cause,” Bradshaw said. He described the investigation of Donahue as legitimate.

“He wrote a 50 page letter about how corrupt we were,” Bradshaw said. “The more we looked at it the more we saw he had put inaccurate information.”

This is a developing story. Check back for updates.

Sober home cases in court: More charges, another plea

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James Kigar

James Kigar, accused to paying kickbacks for patients at his treatment center Whole Life Recovery, has been arrested again on charges of failing to carry workers compensation insurance.

Kigar’s latest arrest on Jan. 15 was a byproduct of raid by the Palm Beach County Sober Home Task Force on Oct. 25, 2016. Documents seized during a search of Whole Life Recovery in Boynton Beach provided evidence used to charge Kigar with more than 90 counts of patient brokering.

Also during the raid, investigators with the Florida Bureau of Insurance Fraud interviewed two employees who complained that taxes and workers-compensation were not being deducted from their paychecks. Records seized confirmed that Kigar did not have workers’ compensation insurance for his employees.

The arrest is the third for Kigar since Oct. 25, which he was arrested on 5 counts of patient brokering. On Dec. 20, Kigar was arrested again when bryannorquistmugprosecutors filed dozens more patient brokering charges against him.

Of nine other sober home owners and operators accused of brokering their tenants to Whole Life Recovery, one has accepted a plea deal in exchange for probation.

Circuit Judge Krista Marx has scheduled a plea conference in the case of Bryan Norquist, 26, owner of The Halfway House, on March 7. Norquist’s attorney, Bruce Zimet, said there is not plea agreement and Norquist intends to go to trial.

Norquist’s older brother Patrick has also been charged with patient brokering.

 

Lawmakers cite Post’s investigation as motive for change

Local lawmakers agreed on Wednesday to cross the aisle and work together on passing legislation to address the opioid crisis and corruption in sober homes.heroin-front-page

During a brief presentation at a meeting of the Palm Beach County Commission and its Legislative Delegation, Democratic Senator Jeff Clemens of Lake Worth urged his colleagues to support a bill soon to be proposed by Republican Rep. Bill Hager of Boca Raton that will address sober home regulation.

Palm Beach County Mayor Paulette Burdick praised the Palm Beach Post for its investigation of corruption in the drug treatment industry and the opioid epidemic.

“We as elected officials work hard in the community and have created task forces but the media, in particular our local Palm Beach Post, has done a wonderful job with presenting the faces of the addiction problem and the health care issues statewide that effect all of us,” Burdick said, referring to a recent article that estimated the cost of the opioid epidemic at Florida hospitals at $1.1 billion.

Spoon sigAssistant County Administrator Todd Bonlarron, formerly the county’s top lobbyist, said he has sent “dozens” of articles from the Post’s series to the White House National Office of Drug Control Policy, hoping to show the extent of the problem.

“We really have struggled in Congress to make the case that we are dealing with a crisis,” Bonlarron said. “This really is a priority issue for us.”

Clemens said he will seek money to continue funding the Palm Beach County Sober Home Task Force, created by Palm Beach County State Attorney Dave Aronberg. The task force has made 9 arrests and drafted proposed legislation.

Clemens and Hager have led the 4-year-long battle to reign in sober homes and succeeded in passing a bill that prohibits treatment centers from referring patients to sober homes that have not been certified by the Florida Association of Recovery Residences.

The county will also seek more money for the Southeast Florida Behavioral Health Network, which is contracted by the Department of Children and Families to oversee drug treatment providers.

 

 

 

West Palm Beach lawyer sleuths out how the rich offshore wealth

UPDATE 3:10 p.m. When Sarah Pursglove of Boca Raton realized her husband was leaving her, she turned to a West Palm Beach law firm to track down his enormous wealth, according to a story this week in The New York Times.

What the law firm of Jeffrey D. Fisher discovered was further evidence of how the wealthy offshore wealth through shell companies in foreign countries.

Not only do wives like Pursglove get the shaft, but so do U.S. taxpayers.

Fisher and his firm – Fisher Bendeck & Potter – walks the line of divorce and white-collar litigation, representing the discarded wives of rich men with complex business concerns. When it comes to ugly divorces of the rich and powerful in Palm Beach County, Fisher is often right in the middle.

“The beauty of high-end divorce law it is that it is usually handled on an expedited basis,” Fisher told the New York Times. “If you’re a person like me, who doesn’t want a five-year-long case, there’s nothing better.”

His firm’s website states “Most of Mr. Fisher’s clients remain “stealth,” but the media has covered a number of significant cases.  He represented  professional golfer Greg Norman and the wives divorcing the head of Gulf Keystone Petroleum Todd Kozel and oil tycoon William I. Koch, among many other notables.

Now The New York Times has spun an incredibly complex legal tale of his representation of Pursglove with Fisher as the star.

“When the wall of secrecy is breached, the distinction between upright global citizen and criminal can quickly grow indistinct,” according to the story.

WEST PALM BEACH; 1/27/05: During Fred Keller's murder trial Thursday, Jeffrey D. Fisher, a civil attorney, testifies about the financial and legal aspects of the divorce between Fred and Rosemarie Keller. Keller is charged with killing his wife Rosemarie and attempted murder in the shooting of her brother, Wolfgang Keil. Photo by Lannis Waters/ The Palm Beach Post ... Not for distribution outside Cox papers. OUT Palm Beach, Broward, Martin, St. Lucie, Indian River and Okeechobee Counties in Florida. Orlando OUT. No Sales. TV OUT. Tabloids OUT. Magazines OUT. Wide World OUT. Internet use OUT.
Jeffrey D. Fisher, a civil attorney, testifies about the financial and legal aspects of the divorce. (Photo: Palm Beach Post)

The target of Fisher’s exploration was a Finnish entrepreneur named Robert Oesterlund.  The businessman swore in a Canadian court that his total net worth totaled just a few million dollars despite the fact that he had two yachts, a $30 million Penthouse and homes in Canada and South Florida — a $5.7 million mansion in Boca Raton.

Oesterlund, himself, likes to jet set around the world and stay on one of his yachts in an effort to avoid paying taxes. Statements found by his accountants put Oesterlund’s worth at least $300 million.

Court records show Oesterlund — with the help of well-known Florida accounting firm Daszkal Bolton — was trying to structure his businesses to insulate himself from paying taxes and future litigation, the Times reported.

“I want to have in writing a statement,” he wrote to his lawyers in 2011, “that I can no longer be subject to Florida or U.S. law.” Take every step necessary, he added, to “remove myself from the country of Evil.”4149529614_09b489801d_o

He is also no stranger to the Florida Attorney General Office, which investigated several of his business before suing his company Xacti in 2013. Oesterlund settled  for $500,000.

His wife, Pursglove, helped him run his businesses — at one time as many as 40 internet companies — after they married in 1998. But he told  her on Christmas Eve 2012 he wanted a divorce. Later, he said if she was in Russia she would get only 10 percent of their wealth by law and in Dubai she would be entitled to nothing.

When the Internal Revenue Service couldn’t help her, Pursglove relied on Fisher and his highly creative lawyers at his firm. They spent millions of their own breaching the defenses of the offshore financial world.

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The Cayman Islands – a favorite spot for the wealthy trying to hide assets.

A big win was when Fisher got Palm Beach Circuit Judge Jeffrey Gillen to prohibit Oesterlund from selling, merging or borrowing against any of his assets.

The lawyer discovered Oesterlund had created a company Omega Partners in the Bahamas that siphoned off most of the wealth from his holding company for his businesses. Omega had one employee: Oesterlund.

At one point, the concern was that Oesterlund would go into hiding to keep his wife from key documents that showed a violation of Gillen’s order. The judge threatened him with criminal contempt.

In court, Pursglove and her legal team accused the law firm of Becker & Poliakoff of helping Oesterlund hide his wealth in the Caribbean through a fraudulent scheme.

Court filings now suggest a settlement — though Fisher and Oesterlund’s remaining lawyers said they were barred from discussing one.

 To read the whole New York Times story click here.

Kratom becomes illegal tomorrow…or not

Democratic Rep. U.S. Lois Frankel has joined efforts to delay the DEA’s attempt to outlaw kratom tomorrow, claiming the drug – abused for its opioid-like effects – shows promise in treating addiction and outlawing the drug would halt research.

kratom2aFrankel is one of 51 members of Congress who signed a letter to DEA Acting Administrator Charles Rosenberg on Sept. 26, asking the agency to “engage consumers, researchers, and other stakeholders, in keeping with well-established protocol for such matters.”

On Aug. 30 the Agency filed notice in the Federal Register that it intended to place kratom’s active ingredients ― the opioids mitragynine and 7-hydroxymitragynine ― on Schedule I, a list of drugs such as heroin that have no accepted medical and have a high potential for abuse.

Kratom is derived from a tree (Mitragyna speciosa korth) grown in Southeast Asia. It has become increasingly marketed and sold to recreational drug users as an alternative to controlled substances. Kratom is legal but is currently on the DEA’s “drugs of concern” list.

Law enforcement has seized kratom in various forms, including powder, plant, capsules, tablets, liquid, gum/resin and drug patch. Because the identity and purity levels are uncertain and inconsistent, “they pose significant health risk to users,” according to a DEA press release announcing the intention to ban kratom.

However, research funded by the National Institutes of Health at the University of Mississippi and University of Massachusetts found that a kratom extract, mitragynine, could be useful in treating opioid withdrawal.

In 2010 the schools applied for a patent. According to the patent application, “the present invention contemplates that kratom extract may also be useful for the treatment of other addictive drugs besides opiate derivatives.”

According to the letter sent to the DEA, outlawing kratom “will put a halt on federally funded research and innovation surrounding the treatment of individuals suffering from opioid and other addictions – a significant health threat,”

The ban proposed by DEA would go into effect on Sept. 30. The ban would sunset after two years and the agency could downgrade kratom to less restrictive Schedule 3 to 5 – drugs that are less addictive and have come medical use.

The response to the DEA’s announcement has been intense.

In a recent survey of 6,000 kratom users conducted by the Pain News Network and American Kratom Association,  98 percent of kratom users do not believe kratom is a harmful or dangerous substance; 75 percent said it is not possible to get “high” from kratom; and 95 percent said that making kratom illegal would be harmful or society.

The American Association of Poison Control Centers identified two exposures to kratom from 2000 and 2005. Between 2010 and 2015, U.S. poison centers received 660 calls related to kratom exposure.

The Center for Disease Control (CDC) found that kratom abuse leads to agitation, irritability, tachycardia, nausea, drowsiness, and hypertension. Health risks found in kratom abusers include hepatotoxicity, psychosis, seizure, weight loss, insomnia, tachycardia, vomiting, poor concentration, hallucinations, and death.

DEA is aware of 15 kratom-related deaths between 2014 and 2016.

 

Two Florida prisons on lockdown

By Pat Beall

Violent incidents involving multiple inmate dorms this morning triggered lockdowns at two Florida prisons, Gulf Correctional Institutional Annex and Mayo Correctional Institutional.

The disturbances come after widespread inmate violence at Holmes Correctional earlier this week, and amid a nationwide call for prison inmates to strike Friday, the 45th anniversary of the inmate uprising at New York’s Attica prison.

Image courtesy of David Dominici @ FreeDigitalPhotos.net
Image courtesy of David Dominici @ FreeDigitalPhotos.net

Wednesday night, several hundred inmates at Holmes were involved in what the Florida Department of Corrections described as a “disturbance.” One inmate was injured. Property damage is being assessed. That prison is also on lockdown.

One minor injury to an inmate is reported in today’s flareups at Gulf and Mayo prisons.

“Across the state, there have been a few minor pockets of inmates refusing to work,” said Florida Department of Corrections spokesman Alberto C. Moscoso. “However, these issues were quickly resolved and those prisons not on lockdown are operating normally.”

Mayo, Gulf and Holmes prisons are all in the Florida Panhandle.

Surgeon General sent 2.3 million doctors a letter this week. Here’s what it said

In a historic first, the U.S. Surgeon General Dr. Vivek H. Murthy has sent a letter to 2.3 million health care professionals, asking them to lead the movement to turn the tide on the nation’s prescription opioid epidemic.

“We often struggle to balance reducing our patients’ pain with increasing their risk of addiction,” Murthy writes. “But, as clinicians, we have the unique power to help end this epidemic.”

Surgeon General Dr. Vivek H. Murthy
Surgeon General
Dr. Vivek H. Murthy

Murthy unveiled his letter-writing campaign in March at the the 2016 Summit on RX Drug Abuse and Heroin in Atlanta. There, speaking with President Obama and other administration officials about the opioid epidemic, Murthy said,  215 million new opioid prescriptions are written every year, “enough to put a bottle of pills in the hands of every adult American.”

Murthy and others at the Summit pointed out that it is physicians who have driven the opioid epidemic with massive numbers of prescriptions.

In the letter mailed this week, Dr. Murthy urges clinicians to visit a website his office launched this month, TurnTheTideRx.org, where they can pledge their commitment to combating opioid misuse by enhancing education for treating pain, screening patients for opioid use disorder, and leading a shift in the public perception of addiction so that it is treated as chronic illness rather than as a moral failing.

This effort builds upon the U.S. Department of Health and Human Services (HHS) Opioid Initiative focused on tackling the nation’s opioid epidemic, as well as the National Pain Strategy, the federal government’s first coordinated plan to reduce the burden of chronic pain in the U.S. Continue reading “Surgeon General sent 2.3 million doctors a letter this week. Here’s what it said”