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Fraud in California drug rehab

An addiction counselor at the Pride Health Services, located in Inglewood, knew something was wrong shortly after she was hired. It seemed like contacting patients to introduce herself would be the easiest part of her job, but it turned out to be harder than anticipated. Some of the patients were in jail. Several never showed up to the clinic and one was dead.

The counselor's boss was allegedly committing fraud. According to her, she was supposed to bill the government for counseling addicts she never met. This type of fraud is part of a rehab racket where clinics specialize in allegedly fabricating paperwork for patients who don't actually come into the clinic, according to a whistle-blower and former rehab clinic employee. A yearlong investigation revealed this widespread scheme, mainly in the Los Angeles region, to get money from California's Medicaid system.

Some clinics allegedly padded their rolls with individuals diagnosed with addictions. Instead of helping those 'diagnosed", they would round up mentally ill individuals from board-and-care homes to participate in therapy sessions they couldn't follow. In addition, they are accused of luring patients in the clinics from the street by giving them cash, snacks or cigarettes. The individuals would sign into the clinic for a couple days then leave. Over a two-year period, Drug Medi-Cal paid 56 rehab clinics in Southern California with questionable billing practices or deception $94 million.

When an individual or business is accused of committing fraud, they could face criminal charges and/ or financial sanctions. The charges can also affect the reputation of the company. A white-collar attorney might be able to build a solid defense against criminal charges in order to save a client's standing in the community. An attorney may also be able to negotiate for lower criminal charges.

Source: NBC Bay Area, "With Lax Oversight, Fraud Flourishes in California’s Drug Rehab Clinics", Christina Jewett and Will Evans, August 01, 2013

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