2 jailed in $58M fraud, FBI says

Treatment centers used double-billing to create $19M revenue stream

Even urine testing at a Delray Beach sober home and addiction treatment center became a way to squeeze patients and insurance companies for more money, according to federal investigators.

Double billing for urine testing was part of the “fraudulent activity and bogus treatment” the FBI says it discovered at the Real Life Recovery Delray treatment center and the Halfway There Florida sober home, newly released court records show.

They billed insurance companies about $58 million between Jan. 1, 2011, and Sept. 30, 2015, leading to almost $19 million in payments to those facilities, according to an FBI complaint filed July 7.

Administering unnecessary treatments, billing for services never provided and paying kickbacks for patient recruiting are among the wrongdoing investigators say occurred, according to the complaint.

Former owner Eric Snyder, 30, was arrested Tuesday on a charge of conspiracy to commit health care fraud.

Christopher Fuller, who investigators say acted as a “patient broker” for Snyder, also faces a charge of conspiracy to commit health care fraud.

Addiction treatment centers and associated residences called sober homes have mushroomed across Broward and Palm Beach counties — raising concerns ranging from overdoses to questionable business practices.

Snyder, who has been in talks with the federal government for two years, wasn’t one of the “bad guys” in the industry, his attorney Bruce Zimet said Wednesday.

“I don’t think there’s a factual basis to support any allegation of fraud against Snyder,” Zimet said.

Federal public defender Kristy Militello, who represents Fuller, said she is not allowed to comment on the case.

The FBI raided the Real Life Recovery, a treatment center at 258 SE Sixth Ave., and Halfway There, a halfway house at 1100 SW Fourth Ave. on Dec. 17, 2014.

After more than two years of investigation, including interviews with former employees and patients, the complaint filed this month by the FBI was unsealed by the court Monday.

The facilities allowed treatment to be conducted by “unqualified and nonlicensed employees,” according to the complaint.

Licensed professionals at times were asked to sign for or back-date treatment documents as though they had conducted it, and to complete in-take forms for patients they hadn’t seen, FBI investigators said.

When a patient was discharged at the beginning of the month, it was common practice to continue billing through the end of the month, the FBI said.

Patients said they were billed for treatment sessions they didn’t attend. One former patient was billed for two sessions while he was serving a jail sentence, investigators said.

Fraudulent urine analysis became “a profit machine,” according to FBI investigators. Employees split urine samples to increase profits from testing and sometimes blended samples to avoid identical testing results that could have raised questions, the FBI complaint said.

Snyder’s facilities used cash, gift cards, trips, airline tickets and rent discounts to attract insured clients, despite restrictions against paying for patient referrals or inducements, according the FBI.

To lure and hold onto insured patients, Snyder’s facilities offered $200 to clients who referred new insured patients, investigators say. Patients who attended therapy sessions, which generated more insurance billing, could receive discounts on the weekly rent to stay at the sober home, according to the FBI.

Snyder called Fuller one of his “junkie hunters,” according to the FBI. Fuller visited motels, Alcoholics Anonymous meetings and other places frequented by addicts to try to recruit patients — sometimes providing drugs and alcohol to prospective clients, the federal complaint said.