Justice Department Announces Series of Cases to Combat Addiction Treatment Kickback Schemes in Orange County

4 mins read
The seal of the United States Department of Justice is seen on the building exterior of the United States Attorney's Office of the Southern District of New York in Manhattan, New York City

          SANTA ANA, California – Over the past 10 months, the Department of Justice has filed criminal charges against 10 defendants – four of whom were taken into custody today – for kickback schemes at substance abuse treatment facilities in Orange County.

          The defendants in these cases charged as a result of The Sober Homes Initiative are substance abuse facility owners and patient recruiters who allegedly, among other things, provided kickback payments for the referral of patients to substance abuse treatment facilities, recovery homes or laboratories. These facility owners allegedly assigned a value to patients depending on the type of insurance the patients had, and then paid patient recruiters kickbacks for each patient the recruiters referred to their addiction treatment facilities. The recruiters allegedly received recurring payments for each month the patients continued to receive purported services from the facilities.

          “Driven by greed, dishonest operators of substance abuse treatment centers have invaded Southern California, but a coalition of law enforcement entities have responded forcefully,” said U.S. Attorney Tracy L. Wilkison. “These corrupt individuals pay illegal kickbacks to obtain insured patients whose health plans pay generous benefits intended to cover legitimate treatments and tests. While many recovery facilities offer much-needed services to addicts, those targeted in this sweep take advantage of our nation’s opioid crisis by fueling a patient-selling network more interested in generating profits than giving help to vulnerable people.”

          “These cases reflect the continued efforts of the Department of Justice to combat fraud by substance abuse treatment facilities and patient recruiters,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “These schemes take advantage of vulnerable members of our society – addiction patients seeking help. These cases illustrate, the government’s commitment to protecting patients and prosecuting those who try to victimize them.”


          “Fraudulent kickbacks in the substance abuse treatment field create perverse incentives for patient recruiters that oftentimes leave addicts in a toxic cycle of drug use and treatment,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI is committed to fighting fraud in the healthcare system so that those struggling with addiction can find legitimate care and encourages patients and employees to report kickback schemes.”

“It is unconscionable when owners and operators of substance abuse facilities abuse the systems designed to help patients recover from addiction,” said Special Agent in Charge Amy K. Parker of the Office of Personnel Management Office of the Inspector General (OPM-OIG). “We are extremely proud of our dedicated staff and federal law enforcement partner’s commitment to pursuing improper and illegal conduct that places vulnerable health care consumers at risk.”

          “The suspects in this case specifically targeted vulnerable individuals in recovery and sold them as a commodity with no concern for their health or wellbeing,” said California Insurance Commissioner Ricardo Lara. “Receiving kickbacks for patient referrals endangers lives and has no place in our health care system.”

Cases charged as a result of The Sober Homes Initiative


          If convicted, Roshdieh and Bindi would face a maximum total penalty of 65 years in prison, and Vawter and Hislop would face a maximum total penalty of 35 years in prison.

Related News:   5 reasons why Joe Biden Should not Run for President in 2024

          This case is being prosecuted by Assistant U.S. Attorney Gina Kong of the Santa Ana Branch Office and Trial Attorney Alexandra Michael of the Los Angeles Strike Force.

          Mahoney is charged with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities, paying kickbacks for referrals to clinical treatment facilities, and money laundering for fraudulently transferring kickback funds to an account held in the name of a patient broker’s mother. Parkinson, a patient recruiter, was charged with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities, receiving kickbacks for referrals to clinical treatment facilities, currency structuring, and possession with intent to distribute fentanyl.

          If convicted, Mahoney would face a maximum total penalty of 35 years in prison, and Parkinson would face a maximum total penalty of 165 years in prison.


          Moore pleaded guilty on December 10 to one count of conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and one count of receiving kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on May 13, 2022, at which time he will face a statutory maximum penalty of 15 years in prison.

          Gonzalez pleaded guilty on August 6 to paying kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on Jan. 28, 2022, at which time he will face a maximum penalty of 10 years in prison.

          Ballough pleaded guilty on November 12 to one count of conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and one count of receiving kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on April 8, 2022, and faces a maximum total penalty of 15 years in prison.

          Reed pleaded guilty on November 19 to one count of conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and one count of receiving kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on May 6, 2022, and faces a maximum total penalty of 15 years in prison.


          All of the cases, with the exception of the Truvida-related matter, are being prosecuted by Assistant U.S. Attorney Benjamin Barron, Chief of the Santa Ana Branch Office, and Trial Attorney Justin Givens of the Los Angeles Strike Force.

          A federal district court judge will determine any sentence for the defendants after considering the U.S. Sentencing Guidelines and other statutory factors.

          The Sober Homes Initiative in Southern California is led by the United States Attorney’s Office and the Health Care Fraud Unit’s Los Angeles Strike Force of the Criminal Division’s Fraud Section. The initiative was coordinated by Assistant United States Attorney Benjamin Barron and Assistant Chief Niall O’Donnell of the Health Care Fraud Unit.

          The FBI’s Los Angeles Field Office, OPM-OIG, and the California Department of Insurance are investigating the cases announced today.


          An indictment contains allegations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Justice 101