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Subject of Post investigation arrested in sober home fraud

Click for complete sober homes coverage

A sober home operator linked to prostitution and fraud is among six people arrested and charged Wednesday in a wide-ranging health-care fraud scheme that details the sordid underbelly of the drug treatment industry as exposed in stories by The Palm Beach Post over the past year.

Kenny Chatman, 46, of Boynton Beach is one of six people named in a federal complaint alleging a scheme to file fraudulent insurance claim forms and license applications to defraud insurance companies, federal officials said.

But it is the details in the complaint alleging how Chatman operated that exposes how ugly the recovery industry has become in Palm Beach County. Among the allegations: Pimping out drug addicts at his sober homes while allowing them to continue using drugs — all of it enabling Chatman and others to soak insurance companies.

Read Post’s 2015 investigation of Kenneth Chatman, charged today.

Simultaneously, the FBI and Palm Beach County Sheriff’s Office deputies and others pounded on doors at 5 a.m. to raid a sober home at 1501 N. Federal Hwy.

Besides Chatman, others charged in the criminal complaint include: Dr. Joaquin Mendez, 52, of Miramar; Dr. Donald Willems, 40, of Weston; Fransesia “Francine” Davis, 44, of Lake Worth; Michael Bonds, 45, of Delray Beach; and Laura Chatman, 44, of Boynton Beach.

Laura Chatman is Kenny Chatman’s wife. The couple faced an additional charge of making false statements related to a health care matter.

All six appeared before U.S. Magistrate Judge William Matthewman Wednesday in West Palm Beach. They wore what appeared to be pajamas, sweatpants, T-shirts and slippers.

Kenny Chatman and Davis were ordered held without bond. Laura Chatman and Willems will be held until they can post $100,000 bond. Bonds was released under the promise to pay $100,000 if he flees while Mendez was released but must post 10 percent of a $100,000 bond by 4 p.m. Thursday.

Assistant U.S. Attorney Marie Villafana asked that Kenny Chatman to be held in the Palm Beach County Jail until a detention hearing, scheduled for Thursday at 10 a.m. He is a flight risk, she argued, and a danger to the community.

Villafana called Davis an extreme flight risk with a lengthy criminal history dating back to 1991. Among those convictions, in 2010 she was adjudicated guilty of grand theft and fraudulent use of a credit card and personal identification information.

Davis is one of Kenny Chatman’s closest associates, for years managing his various sober homes. In interviews with The Post, Kenny Chatman denied having any involvement in the homes — some were placed in Davis’ name — despite police reports to the contrary.

“If you know anything about this industry, people say a lot of stories and make up things along the way,” he said in 2015, shrugging off evidence of improprieties.

MORE ONLINE: Read The Post’s complete coverage of the sober-home industry.

At a Sober Home Task Force meeting Wednesday, the arrests drew immediate attention.

Beth Ann Middlebrook, an attorney for The Watershed treatment center, called the arrest good news.

“We are gratified for the safety of our patients and all patients in the recovery community,” She said. “I can say that it is our understanding that drug use was permitted at his so-called sober homes and that there has been negative consequences on lives.”

She said Chatman has stolen patients from The Watershed. “Kenny Chatman has trespassed on our property, stolen our patients and endangered our patients,” Middlebrook said.

When Lake Worth City Commissioner Andy Amoroso announced the busts at the start of the meeting, the room of treatment operators and law enforcement officials erupted in cheers.

Amoroso said in an interview that Chatman was among the worst operators and referred to the upsurge in heroin-related overdose deaths among recovering addicts, often sent here from out-of-state for treatment.

“But at the end of the day, many people don’t want to send their children and loved ones to South Florida because the sober homes business plan doesn’t work because we are sending their kids back in body bags.”

Details of charges

Kenny Chatman, Davis, and Bonds established numerous sober homes, including Stay’n Alive, Redemption Sober House and Total Recovery Sober Living, and an unnamed facility at 962 W. 43rd St., West Palm Beach.

All the facilities were in business to provide safe and drug-free residences for people suffering from drug and alcohol addiction, an industry fueled by a nationwide heroin epidemic.

But federal prosecutors, who have been investigating the industry in South Florida for more than two years, say they were more akin to fraud machines that engaged in human trafficking. These are the first charges to be filed from the federal probe.

“Chatman and Davis engaged in various tactics to keep patients from being able to leave Reflections and Journey, including threatening violence, and confiscating their belongings, such as car keys, telephones, medications, and food stamps, in order to maintain the ability to continue fraudulently billing the insurance companies,” the U.S. Attorney’s Office said in a news release.

Federal prosecutors say Chatman recruited and coerced female patients and residents into prostitution, promising them they wouldn’t have to pay rent or participate in treatment as long as he could bill their insurance companies for those services, charges first raised one year ago in a Palm Beach Post news story.

In some instances, Kenny Chatman and Davis submitted urine and saliva samples from employees instead of urine and saliva from patients, prosecutors said.

They said the defendants also brokered patients from these sober homes to treatment centers.

“To obtain residents for the sober homes, some members of the conspiracy provided kickbacks and bribes, in the form of free or reduced rent and other benefits, to individuals with insurance who agreed to reside at the sober homes, attend drug treatment, and submit to regular drug testing,” the release from the U.S. Attorney’s Office said.

Those charged would then charge the residents’ insurance plans, it said.

“Although the sober homes were purportedly drug-free residences, some of the defendants permitted the residents to continue using drugs as long as they attended treatment and submitted to drug testing,” federal authorities said.

Industry pariah

Emily Isaac, a recovering addict in Delray Beach, said some people attending 12-step programs had been praying for Chatman’s arrest.

She said it is well-known among recovering addicts that Chatman withholds medication from clients withdrawing from opiates as a form of punishment. She said she knows personally of people who ended up relapsing on Chatman’s watch.

“He is everything people with a conscience shudder at in regards to this industry,” Isaac said.

One woman died and another nearly died of overdoses at a Broward County sober home linked to Chatman in October, The Post reported.

Outside Chatman’s Reflections treatment center in Broward County, foot traffic was scant. When a reporter knocked on the door, a man in an FBI polo shirt answered. Behind him, boxes filled with papers sat on the floor. The man, who did not identify himself, said he could not comment but said the center was closed.

Behind the strip mall, an unmarked law enforcement vehicle sat guarding the back door.

Department of Children and Families didn’t find any problem with Chatman when he offered to establish a new treatment center in Lake Worth. In October, the agency granted his Journey to Recovery a probationary license to operate.

Others charged also had a criminal history.

Willem has ties to pills mills, which distributed pain pills in huge volumes until a statewide crackdown in 2011.

State regulators, the Drug Enforcement Administration and the Broward County Sheriff’s Office raided Willem’s workplace — Pompano Beach Pain Management — in 2012, according to a state complaint filed this year. The complaint accuses him of writing big volumes of serious medication, such as Dilaudid and Percocet, for patients he hadn’t screened and wasn’t monitoring.

After the pain clinic bust in 2012, Broward County deputies charged him with six felonies.

He’s accused of writing 24,011 prescriptions in less than 13 months, including about 13,400 prescriptions for oxycodone, morphine or hydromorphone.

Willems also admitted to investigators he left signed, blank prescription forms for the clinic’s owner to fill out. Deputies reported finding 85 such slips in the office.

A Broward County criminal case is still working its way through the courts, with the next court hearing scheduled for February.

Mendez, a graduate of a Dominican medical school, has a history of liens from the Internal Revenue Service, Broward County court records show. The latest IRS lien for more than $232,000 was filed in September. His state license shows him at the site of a Pembroke Pines clinic, but the clinic’s web page does not list him.

Bonds was arrested in 2009 by Delray Beach police on cocaine possession allegations. However, the state attorney declined to file charges against him.

Staff writers Olivia Hitchcock and Hannah Winston and researcher Melanie Mena contributed to this story.

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