Doctor in Kenny Chatman case expected to plead guilty

The last defendant in Kenny Chatman’s drug treatment fraud scheme is expected to plead guilty, according to a Thursday court filing.

Dr. Joaquin Mendez had pleaded not guilty to federal charges of money laundering and conspiracy to commit health care fraud. What he will plead guilty to is unknown; a change of plea hearing is scheduled for July 14.

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

He was the final holdout among eight people arrested in a multi-million-dollar drug treatment operation created by Chatman, who was sentenced to 27 1/2 years in prison in May.

Chatman, a felon who had no experience in health care before he created Reflections Treatment Center in Broward County in 2013, also trafficked his female patients. In his sober homes scattered throughout Palm Beach County, he held women captive and prostituted them.

RELATED: ‘Kenny Chatman kidnapped me:’ Read one woman’s human trafficking story

Together, the defendants will have to pay back millions to more than a dozen insurance companies that were defrauded.

Mendez was a former medical director for the Reflections. One of the reasons he declined to take a plea deal is because his veteran defense attorney, Richard Lubin, wanted more time to evaluate the evidence.

The amount of evidence in the case was “massive” – more than he’d ever seen in his 42 years in law, Lubin wrote earlier this year. It included:

  • 326 gigabytes of digital records copied onto an encrypted hard drive.
  • 236,245 digital files organized into 8,307 folders
  • 16,064 records in 133 files of patient data
  • 1,719 patient case files with as many as 600 pages in each file
  • 30 FBI taped interviews
  • 225 boxes of paper documents that prosecutors said would take 6-8 weeks to copy

Chatman was first exposed in a 2015 Palm Beach Post story. He was also recently profiled by NBC News.

Drug treatment center doctor who worked for Kenny Chatman will stay out of jail

A doctor who worked for corrupt treatment center operator Kenny Chatman will not be going back to jail – at least for now.

Federal prosecutors wanted Dr. Joaquin Mendez, who is out on $100,000 bond, back behind bars after they argued he violated the terms of his release by treating patients and prescribing opioids.

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

But Mendez’s lawyer, Richard Lubin, argued the terms were vague, and both sides agreed last week simply to amend the terms of his release.

Mendez, a former medical director for Chatman’s corrupt Reflections Treatment Center, is the only one of eight defendants not to have taken a plea deal for their involvement with the facility.

The seven others, including Chatman and his wife, Laura, were sentenced to a combined 58 years in prison.

Mendez has been charged with money laundering and conspiracy to commit health care fraud for ordering unnecessary urine drug tests for addicts, according to prosecutors.

One of the terms of his release, added in handwriting to the paperwork, was that he “not use his Medicare number to provide any services.”

Prosecutors said he violated those terms after he treated at least 188 Medicare patients wrote more than 100 prescriptions for controlled substances that included oxycodone, Oxycontin, clonazepam and fentanyl.

Lubin, his lawyer, argued the terms were weirdly vague.

“Not only is this Court and Dr. Mendez left guessing at what it means to ‘treat patients using his Medicare number,’ it is entirely unclear what the Government means by ‘Medicare number,'” Lubin wrote.

HEROIN: Killer of a generation

Apparently the ‘Medicare number’ prosecutors referenced was Mendez’s Provider Transaction Access Number, which Lubin said had “absolutely nothing to do with” Medicare claims.

On Thursday, both sides agreed to changing the terms of release.

Mendez is one of two doctors in charge of overseeing patient care at Chatman’s facilities to be arrested. Last Week, Dr. Donald Willems was sentenced to 10 years in prison – the maximum sentence – after pleading guilty to conspiracy to commit health care fraud.

Chatman was sentenced to 27 years in prison last month after admitting to turning his female patients into prostitutes and pimping them out online.

One of Kenny Chatman’s top doctors gets maximum sentence

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

A doctor who treated patients at Kenny Chatman’s notorious drug treatment center was sentenced to 10 years in prison today.

Dr. Donald Willems, an osteopath, was the medical director for Chatman’s Reflections Treatment Center, in Broward County, from October 2015 to May 2016.

He admitted in his plea deal to signing off on drug tests and unnecessary allergy and DNA tests, which helped Chatman turn his drug treatment center into a multi-million dollar business.

Although Willems was supposed to be treating the patients at Reflections, he wasn’t monitoring the results of their drug tests, he admitted. If he was, he would have noticed that most of the patients were not sober and their drug tests were actually being submitted by other people, including Reflections workers.

‘Kenny Chatman kidnapped me’: Read one woman’s human trafficking story

The 10-year sentence was the maximum he could have received after pleading guilty to conspiracy to commit health care fraud.

HEROIN: Killer of a generation

Willems was one of two doctors arrested for working with Chatman, who was sentenced to 27 years in prison last month. Chatman admitted to turning some of his female patients into prostitutes at his sober homes in Palm Beach County. Even in South Florida’s widely corrupt drug treatment industry, Assistant U.S. Attorney Marie Villafaña called Chatman “the most dangerous” player in it.

>> HEROIN: Killer of a generation

Federal prosecutors say the other doctor, Dr. Joaquin Mendez, has violated the conditions of his release on bond, and they asked last week to arrest him again. Mendez is the only one of the eight defendants – which includes Chatman’s wife, Laura – to not take a plea deal.

Willems is also facing four-year-old state charges of racketeering and illegally providing oxycodone for his work at a pill mill in Broward County.

We first exposed Kenny Chatman. He tried to sue us for it.

When The Palm Beach Post first wrote about corrupt drug treatment center owner Kenny Chatman – a year before his arrest – the story exposed Chatman as a liar, fraud and potential sex trafficker.

Apparently, Chatman didn’t like it.

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

Court files show that he had lawyer Jeffrey Cohen, of the Florida Healthcare Law Firm, run up $5,000 in billings investigating whether to sue The Palm Beach Post for defamation.

Cohen had a fellow lawyer pull the police records The Post cited in its story. He also called four different South Florida lawyers who specialize in defamation cases to try to get them on board.

“Teleconference with Benny Lebdecker (sic) re meeting to discuss possible lawsuit against Palm Beach Post,” reads one entry in Cohen’s list of billable hours.

“Discussions with Attorney Bruce Rogow re Palm Beach Post article and retention of his services,” reads another.

Chatman and his treatment center’s medical director, Barry Gregory, teleconferenced with Cohen multiple times between December 2015, when The Post’s article ran, and January 2016, the records show.

Ultimately, Chatman never pursued a lawsuit against The Post, and in December, he was arrested by the FBI. He pleaded guilty to conspiracies to commit sex trafficking, money laundering and health care fraud, and last week was given a 27-year sentence in federal prison.

RELATED: ‘Kenny Chatman kidnapped me:’ Read one woman’s human trafficking story

Gregory pleaded guilty to conspiracy to commit mail fraud and false statements regarding health care matters, and he was sentenced to five years in prison.

Normally, such billable hours are rarely made public, especially if a case doesn’t go to trial. So how did The Post find out about it?

Chatman racked up more than $5,000 in legal fees with Cohen – a relative pittance considering Chatman built his fraudulent treatment centers into multimillion-dollar operations.

But Chatman never paid the bills, and last year, Cohen sued him over it. The billable hours were included in the lawsuit. Chatman quickly paid up. (Read the bills here.)

When asked about it in March, after Chatman pleaded guilty, Cohen said he couldn’t talk about it, since Chatman was a former client.

Cohen has taken a contrarian view on some of the issues surrounding the addiction treatment industry. He’s been one of the few people to publicly criticize the efforts of the Palm Beach County Sober Home Task Force, which has arrested more than a dozen people in the industry for fraud and recommended widespread legislative reforms.

“They’re trying to kill cockroaches with shotguns,” he told The Post in March. “The way in which they’re going about it, sometimes, is eyebrow-raising.”

(He’s also been critical of The Post’s extensive coverage of South Florida’s drug treatment industry, calling it “a story in search of a villain.”)

Whether or not a lawsuit against The Post would have been successful is obviously unknown. But the Chatman story, like all the big stories by the paper’s investigative team, are thoroughly reviewed for potential libel issues by The Post’s lawyers.

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.

New charges in Kenny Chatman case: Evidence “massive”

 

New charges have been filed against a doctor who worked for Kenneth Chatman’s notorious sober home operation, where women addicts were prostituted, held against their will and allowed to continue using drugs, according to court records.

The new charges against Dr. Joaquin Mendez include conspiracy to commit health care fraud, giving a false statement relating to health-care fraud and money laundering.

Another doctor charged in the case, Dr. Donald Willems, is expected to appear in federal court this afternoon. Federal prosecutors want Willems bond revoked. They say he continued to work in a drug treatment center and continued prescribing drugs he was not authorized to prescribe – activities prohibited as a condition of his bond.IMG_0237.PNG

Mendez is one of two doctors charged with ordering unnecessary urine drug tests for addicts enrolled in Chatman’s treatment centers, Reflections and Journey.

Chatman and several alleged co-conspirators also operated numerous sober homes, including Stay’n Alive, Redemption Sober House and Total Recovery Sober Living, and an unnamed facility at 962 W. 43rd St., West Palm Beach.

All the facilities were in business to provide safe and drug-free residences for people suffering from drug and alcohol addiction, an industry fueled by a nationwide heroin epidemic.

But federal prosecutors, who have been investigating the industry in South Florida for more than two years, say they were more akin to fraud machines that engaged in human trafficking.

Three of the seven charged in the case have pleaded guilty. Court papers filed be a federal prosecutor say Chatman and his wife, Laura, also plan to plead guilty.

Dr. Mendez wants a trial, according to court papers.

Mendez attorney recently filed court papers asking for more time to prepare for trial, citing a “massive” amount of records accumulated as part of Operation Thoroughbred – the name of the federal task force investigating corruption in South Florida’s drug treatment industry.

Richard Lubin, a veteran attorney with a career full of high-profile cases, wrote in court papers that the amount of evidence against his client is more than he has seen in 42-years of practice.

How much evidence?

326 gigabytes of digital records copied onto an encrypted hard drive.
236,245 digital files organized into 8,307 folders.
16,064 records in 133 files of patient data
1,719 patient case files with as many as 600 pages in each file.
30 FBI taped interviews
225 boxes of paper documents that prosecutors say will take 6-8 weeks to copy

All the facilities were in business to provide safe and drug-free residences for people suffering from drug and alcohol addiction, an industry fueled by a nationwide heroin epidemic.

But federal prosecutors, who have been investigating the industry in South Florida for more than two years, say they were more akin to fraud machines that engaged in human trafficking. These are the first charges to be filed from the federal probe.

Lawmakers target heroin epidemic with two bills

Two Florida lawmakers have responded to the opioid epidemic with bills that would increase sentences for selling fentanyl and require hospitals to provide additional care for overdose victims.

The bills are the first introduced in the Florida Legislature’s 2017 addressing the opioid epidemic. The session begins on March 7.

HB 61, filed by Rep. Larry Lee, D-Port St. Lucie, requires hospitals to screen overdose patients to determine the need for additional services and prohibits hospitals from discharging overdose patients to a detox or drug treatment center until the patient is stable.


The attending physician must also attempt to contact the overdose patient’s primary care physician or any other treatment providers who prescribed a controlled substance to the patient within the last year and inform them of the overdose.

If the patient is currently in a treatment program, the hospital’s attending physician must also inform the medical director at the treatment center about the overdose.

The hospital must also inform an overdose patient’s family or emergency contact about the overdose, the drug the attending physician believes may have caused the overdose and provide them with a list of drug treatment providers. Information about how to take legal action to protect an addict under Florida’s Marchman and Baker acts must also be provided.

»» Read the Post investigation – Addiction Treatment: Inside the Gold Rush »»

Finally, the bill bars police and prosecutors from filing criminal charges for drug possession against overdose victims when the drugs are discovered during emergency, life-saving efforts.

SB 150, introduced by Sen. Greg Steube, R, Sarasota on December 12, makes selling, buying or manufacturing at least 4 grams of fentanyl a first-degree felony. Fentanyl is an opioid painkiller used to sedate surgical patients and relieve chronic pain. It is 50 times more powerful than heroin.

In The Palm Beach Post’s Nov. 20 analysis of 216 people who died in 2015 from heroin-related overdoses, fentanyl was found in 42 percent of the cases.

Steube, whose district covers communities particularly hard hit by the opioid epidemic, is chair of the Senate Judiciary Committee.

Local lawmakers, Sen. Jeff Clemens, D-Lake Worth, and Rep. Bill Hager, R-Boca Raton, have said they, too, will file bills based on the recommendations of the Sober Home Task Force.

During the 2016 legislative session, lawmakers gave $275,000 to Palm Beach County State Attorney Dave Aronberg to investigate corruption in the drug treatment industry and propose new laws and regulations and tweaks to existing ones.

The Sober Home Task Force has made nine arrests since Aronberg launched it on July 1. A three-month-long grand jury investigation revealed widespread patient brokering and insurance fraud and recommended changes to laws and regulations.

Aronberg, a former state senator, said he would travel to Tallahassee to urge lawmakers to incorporate the recommendations of the grand jury in their bills and to lobby for additional money for treatment and regulatory oversight.

 

 

 

 

 

 

UPDATED: 15 questions addicts should ask to find a safe halfway house

These 15 questions will help you avoid being the victim of insurance fraud and patient brokering in a halfway house.

Picking a sober home: What to ask

More than two dozen sober home operators have been arrested since October 2016 and charged with accepting and paying kickbacks to enroll insured addicts living in sober homes to specific treatment centers. Asking these 15 questions will help you determine if a sober home is doing business legally and offers the best accommodations for recovery. 

1. Are you certified by the Florida Association of Recovery Residences? FARR certifies sober homes that meet 38 standards for recovery, housing, administration, training, finance and good-neighbor practices. Certified homes can be found at farronline.org.

2. Is the residence coed? Experts agree that newly recovered addicts, especially women, are vulnerable. Dating and relationships in early sobriety can take the focus off recovery.

3.What will happen if I relapse? FARR recommends that sober homes devise individual relapse protocols that include contacts and alternative housing arrangements.

4. Have there been any overdoses or deaths? Is staff trained in CPR?

5. How often do you drug test? Are tests random? What kind of tests? How much do they cost?

Here’s how the fraud works

6. Do you bill insurance? Sober homes are not licensed to offer medical care and cannot bill insurance for services, including rent.

7. How much is rent? How is it paid? What is included in rent? What is the refund policy? Are there rules about pocket change and money transfers? Experts warn insured residents to be leery of free rent, gift cards, cellphones, gym memberships and other inducements if linked to attendance at an intensive outpatient program (IOP) or the provision of urine samples.

8. Do you have an ownership interest or receive referral fees from an intensive outpatient program (IOP) or lab? Such kickbacks, often disguised as “case management fees” are illegal under Florida’s patient brokering law. 

9. Have there been any complaints filed against the sober home or its employees, including code violations?

10. How much training, education and clean time do you require of employees, including house managers?

11. Are properties and vehicles that transport clients insured? Are clients allowed to drive vehicles?

12. Are there 12-step meetings on property? Do you provide transportation to meetings? The grocery store? Is there public transportation within walking distance?

13. What are your policies regarding guests and furloughs?

14. What is your cellphone policy?

15. What is the maximum occupancy? How many to a room? How many bathrooms?

Read more of the Post’s coverage of corruption in the drug treatment industry.

Candle light vigil for victims of drug-overdose on Thursday

Sig2Hundreds of people are expected to attend the 9th Annual National Candle Light Vigil – sponsored by West Palm Beach-based Narcotics Overdose Prevention & Education (NOPE) Task Force – on Thursday to honor the estimated 30,000 people who die every year from drug overdoses in the U.S.

According to data gathered as part of the Post’s ongoing series on the substance abuse industry, more than 200 people have died of drug overdoses this year in Palm Beach County.

Michael Botticelli, Director of the White House Office of National Drug Control Policy, will give the keynote address via video to discuss the importance of drug prevention and education. Dave Aronberg, Palm Beach County State Attorney, will speak about local efforts to fight drug abuse.

At the vigils in more than 55 cities in the U.S. participants will light candles, bow their heads in a moment of silence, and view a memorial wall with more than 300 photos, which represent some of the 100 people who die every day of drug overdoses.

The vigil begins at 7 pm at the Gosman Amphitheatre at the Kravis Center, located at 701 Okeechobee Blvd.