Federal prosecutors charge owners in massive US addiction treatment fraud scheme

Federal prosecutors in the Central District of California have charged the owners of more than 20 Southern California addiction treatment facilities in what the Department of Justice describes as the largest substance use disorder treatment fraud case in U.S. history. The defendants are accused of submitting approximately $1.6 billion in false claims to commercial insurers.

According to court documents and FBI affidavits, the scheme involved partnering with “body brokers” to target vulnerable individuals, including the homeless, for recruitment. To maintain insurance billings, the defendants allegedly implemented policies to drug patients with medication to prevent them from leaving, cut them off from family communication, and blocked access to their personal belongings.

Marvin Ventrell, CEO of the National Association of Addiction Treatment Providers (NAATP), described the alleged actions as predatory, stating that recruiting people in addiction as billing targets is an attack on the people the field is meant to serve. The investigation remains ongoing.