The investigation into Kenny Chatman’s drug treatment empire began in September 2013, when two patients at a treatment center operated by him told West Palm Beach police that Chatman provided them with drugs and condoms and forced them into prostitution.
Police told the FBI about the patients’ claims and as the investigation progressed over three years, more witnesses came forward with similar — and new — stories. Some of those, previously undisclosed, were made public in court documents filed by a federal prosecutor.
One confidential informant told investigators that Chatman and his associates advertised women living in his sober homes on webpages of local escort services. The only alternative to prostitution was stealing high-end items from retail stores and turning them over to Chatman, one informant said.
Another informant was ordered to sign documents for bogus services from a doctor, massage therapist and chiropractor or leave the program. Chatman confiscated residents’ phones to prevent them from contacting anyone outside the program, another informant said.
Chatman verbally and physically abused clients and provided — even encouraged — them to use drugs while living in his sober homes. Relapses enabled Chatman to continue billing their insurance for treatment, an informant said.
Despite the abuse and “flop house” living conditions, clients stayed because Chatman “gives great stuff,” including free cigarettes, hair styling, manicures and pedicures and clothes.
To demonstrate the scope of law enforcement involved, prosecutors identified 11 state and federal law enforcement agencies, including the Florida Division of Insurance Fraud, that have been working on the investigation.
According to prosecutors, the division has received more than 350 tips and complaints about 175 treatment facilities in South Florida.
A 17-count indictment handed down Jan. 24 accuses Chatman of money laundering, health care fraud and sex trafficking, charges that could send him to prison for life.
Stretching from Mangonia Park in Palm Beach County to Plantation in Broward County, his businesses brought in an estimated $5.4 million during its four-year run, according to the indictment.
Chatman’s 44-year-old wife, Laura, along with two doctors who worked at the treatment centers and three others also were indicted, most on money laundering and health care fraud charges.
Some have already made plea deals.
Michael Bonds, owner of Redemption sober homes in Delray Beach, pleaded guilty last week to conspiracy to commit health-care fraud for accepting $240,000 in kickbacks allegedly paid by Chatman. Stefan Gatt, 27, a salesman at a medical lab in Boca Raton, pleaded guilty to the same charge.