Hooked, hoodwinked: Some drug rehabs aim for relapse and riches

DELRAY BEACH, Fla. -- The Reflections treatment center looked like just the place for Michelle Holley's youngest daughter to kick heroin.

Instead, as with dozens of other addiction-treatment centers in Florida, the owner was more interested in defrauding insurance companies by keeping his patients hooked, her family said.

"It looked fine. They were saying all the right things to me. I could not help my child, so I trusted them to help my child," Holley said.

Instead, the center refused to give 19-year-old Jaime Holley her prescription medicine when she left, forcing her to use illegal drugs to avoid acute withdrawal symptoms, her mother said. She died of a heroin overdose in November.

"Right to my face, they lied to me, and I believed them," Michelle Holley said.

Rather than working to get people well, a growing number of unscrupulous industry players are focusing on getting patients to relapse so insurance dollars keep rolling in, according to law-enforcement officials, treatment experts and people trying to beat addiction.

"It's terrible right now. I don't know of any business that wants to kill its customers, but this one does," said Timothy Schnellenberger, who has worked for years in running addiction-recovery centers in Florida. "It really breaks my heart. Kids are dying left and right."

Reflections and Journey -- both centers owned by Kenneth Chatman -- are shuttered now, and Chatman is serving a 27-year federal prison sentence after pleading guilty to health-care fraud and money laundering, but that's little comfort to Holley, who described her daughter's ordeal in an interview.

"I couldn't fix it. And as a parent, I wanted to fix it," she said, trying to contain her tears as she looked through her daughter's pictures and Mother's Day cards.

As drug addiction destroys families across America, "there's a need for a positive, vibrant recovery network to help people get off of opioids," said State Attorney Dave Aronberg, chief prosecutor in Palm Beach County. "You can't just arrest your way out of this problem."

But lately, sunny South Florida has become the focal point of rampant insurance fraud that relies on a lethal cycle of intentional failure, authorities said.

"The incentive is to keep them in this relapse system, this gravy train that doesn't end until the person leaves in a body bag or an ambulance," said Aronberg, whose opioid task force has made more than 30 fraud arrests. "There's no money in sobriety."

Overcoming substance abuse generally involves a treatment center, where urine tests are done, prescriptions dispensed and recovery-group meetings held, and a "sober home," where people recovering from addictions live together to get group support.

It's a $1 billion business in Palm Beach County alone, federal officials said.

Florida has the most sober homes per capita of any state, said David Sheridan, president of the National Alliance for Recovery Residences. Opioid-treatment fraud has surfaced in California and Arizona, but Florida stands out, in part because so many people come for treatment.

Two people overdose on opioids every day in Palm Beach County, mainly from heroin laced with the synthetic drug fentanyl, investigators said. Statewide, deaths from this combination rose 75 percent in 2015 as more than 2,500 people died in Florida from opioid-related overdoses, according to the state medical examiner.

One operation alone -- the Real Life Recovery Delray treatment center and the Halfway There Florida home -- collected almost $19 million by fraudulently billing insurance companies for $58 million over four years, according to the FBI. That case has not yet gone to trial.