Raids, tips led to 28 arrests
Informants played role in drug-recovery crackdown
After Delray Beach police arrested John Dudek last year, he turned into a tipster in a crackdown on the drug-recovery industry.
The sober-home owner told an officer he was surprised that police were not yet investigating another facility, Chapters Recovery, a drug-treatment center in Delray thatwas illegally paying him as much as $600 a week for referring patients, police said.
In the months that followed, authorities raided Chapters and made more arrests. Taken into custody were Chapters’ CEO, its admissions director and operators of sober homes doing business with Chapters.
Court records and police reports offer an inside look at how a team of investigators in Palm Beach County has ar--
rested 28 people so far, accusing them of breaking the law while running drug-treatment centers. Investigators have used undercover work — and tips from other businesses in the industry — to identify scofflaws, records show.
Dudek, 55, of Boca Raton, who pleaded guilty to charges of aiding and abetting patient brokering, on Friday recalled why he decided to talk to authorities. He said he remembers visiting one treatment center and seeing kids sitting on the floor “high as kites.” He said “some stuff here don’t make sense.”
Armed with a $275,000 state appropriation, Palm Beach County StateAttorneyDave Aronberg began a task force last year to study abuses in the industry and find solutions. There was “an accepted wave of bad business” in the industry that had to change, he said. And the task force, which consists of prosecutors and police, becameapioneering force tocombat the opioid epidemic, Aronberg said.
“The task force has created an aggressiveness that is unique in this country,” he said. “I don’t think there’s anything like it nationwide, where you have law enforcement, prosecutors and members of the industry working together to clean up the abuses and save lives.”
Of the 28 arrested — all from Broward andPalm Beach counties — by the task force over the past year, 26 have faced charges related to “patient brokering.” Under Florida law, it is illegal for anyone to offer or pay any commission, kickback or bribe to promote the referral of patients to or from a health care provider.
Authorities say they’ve found businesses who illegally pay for patients to be referred to them, and who then bill the patients’ insurers for pricey urine tests that they conducted several times per week.
In June 2016, a confidential informant led police to Whole Life Recovery Center, a drug-treatment facility in Boynton Beach, according to an arrest report.
A monthslong investigation involved the informant obtaining payments fromWhole Life for patient referrals, police said. Itended in the arrests of James Kigar, 56, of Boca Raton, the company’s CEO, and Christopher Hutson, 37, of Palm Beach, an operations consultant.
Over the next year, the task force arrested 11 others linked in some way to Whole Life, including sober-home owners doing business with it, authorities say.
While a large number of arrests resulted from the Whole Life investigation, the task force also has arrested groups of employees at other businesses, too.
At Chapters Recovery, one of those arrested was the owner, Daniel Kandler.
He was held on nearly 100 counts of patient brokering, but records showprosecutors only are pursuing about 53 of those counts in court. Hehas pleaded not guilty.
Seven of the 28 arrested have settled their felony cases by taking plea deals, including Dudek.
Dudekwas the owner of SouthernPalms Oasis, a soberhomethat sheltered recovering addicts. Dudek was concerned a jury might see his facial tattoos and hear about his criminal history, so he decided itwas less risky to take a plea deal, he said. After pleading guilty, he lastmonthbegan serving three years of felony probation. “Itwas just easier,” he said. The large number of defendants taking plea deals sets an example for those still working in the treatment industry and keeps scofflaws from re-entering it, said attorney Gregory Salnick, whose firm represents several of those arrested by the task force.
Because of a law that many describe as confusing, someworkers at sober homes and treatment centers might not have realized what they were doing was illegal, he said. They only realized later that errorswere made, he said.
“They’re taking plea deals because they’re given assurance, a guarantee that they won’t be a convicted felon, and some will see no jail time,” Salnick said. “Going to trial is a huge risk. If someone is being offered the opportunity to escape this without being a convicted felon or spending time in jail, it sweetens the pot for them.”
Salnick said he is confident the task force will not stop until they’veweeded out all the wrongdoing.
The plea deals prevent defendants from going back into the drug-treatment industry. Salnick said those still in operation will see the arrests and the downfall of one corrupt treatment center as an example of what could happen to them.
“If I was in that industry and I saw all my buddies getting taken down, I’d be looking over my shoulder at all times or closing up shop,” he said. “By the amount of arrests, they are absolutely instilling fear in individuals operating illegally.”
The 21 defendants who haven’t taken plea deals have either pleaded not guilty or not entered a plea in their case.
At least one of the accused, Kigar, plans to fight back incourt, his lawyer said.
Kigar’s attorney, David Frankel, suspects the task force zeroed in on his client because hewas doing business with Christopher Hutson, who in 2012 pleaded guilty to a racketeering conspiracy charge for his role in a pill mill operation run by twin brothers Christopher and Jeffrey George that made $40 million in illegal drug sales.
Frankel says Kigar — who was Whole Life’s CEO, but also teaches yoga in Boca Raton — is innocent by way of ignorance and naivety. Frankel said that prosecutors on the task force had led his client to believe he was acting legally some time before his arrest.
Frankel criticized the task force for trying to shut down the drugtreatment industry altogether, to win favor from cities that want to curb sober homes.
“There was never a question that [Kigar’s] intentionwas always for the best interest of the people,” he said. “If he thought a sober homewas not on the up and up, he cut the relationship. They would lose 30 patients overnight.”
Justin Kunzelman, director of business development for Ebb Tide Treatment Center in Palm Beach Gardens, sits on the task force and offers industry insight that helps investigators identify unscrupulous practices and employees running the treatment centers.
They’re selling each other out to try to lessen the blame on themselves, he said.
He said “a lot of really good changes” are resulting from the task force crackdown, but he doesn’t want the industry to be perceived entirely as negative. He said he thinks most businesses are helping addicts recover.
“Itwould be really bad if people stopped trying to get better,” he said. “And if people stop seeking treatment in Florida because they feel like there’s no good place to turn, thatwould be a travesty.”
Of the 28 arrested by the task force over the past year, 26 have faced charges related to ‘patient brokering.’