Ken Bailynson, a former sober home operator described in a federal court on Friday as a serial fraudster, will remain in jail while he awaits trial on charges of money laundering and health care fraud.
Federal Magistrate William Matthewman rejected bond, finding that Bailynson is a flight risk and poses an economic danger to the community. During the two-hour bond hearing, Assistant U.S. Attorney Jim Hayes described Bailynson’s sober home in West Palm Beach, Good Decisions Sober Living, as a “piss farm” that existed “only to harvest residents’ urine” for costly drug tests that were not used in the treatment of recovering addicts.
Between 2011 and 2015, Bailynson’s sober home, treatment program and lab billed 80 insurance companies more than $106 million for urine drug screens. The companies paid out $31.1 million, Hayes said. Of that amount, Bailynson received $14.7 million, Hayes said.
A Palm Beach Post investigation in 2015 detailed how Bailynson took over Green Terrace, a condominium complex on Georgia Avenue in West Palm Beach, and turned it into an armed camp, where guards with guns made sure addicts did not leave and nosy residents minded their own business. By the time the FBI raided Good Decisions in September 2014, Bailynson had converted the pool clubhouse into a urine collection site and banned unit owners from entering.
Urine drug tests are a staple in drug treatment, providing a fast and easy way to determine whether an addict has relapsed. However, unscrupulous drug treatment operators paid doctors to write prescriptions for costly and complex urine drug tests as often as four times a week, billing insurance companies as much as $6,000 per test.
Bailynson compensated residents for bringing in new addicts with trips to Universal Studios in Orlando and discounts on rent. Addicts living at Green Terrace who lost their insurance were evicted, Hayes said.
In some cases, tests were ordered before the results of the prior test had been received and test results were not used in treating addicts, Hayes said. Several residents at Good Decisions had urine drug test bills of more than $1 million, Hayes said. Others racked up bills in the hundreds of thousands of dollars within months, Hayes said.
Although Bailynson shut down Good Decisions shortly after it was raided by the FBI in September 2014, he went back into business, operating a treatment center, lab and sober home through companies created in the names of his girlfriend and former employees, Hayes said. One former employee testified that Bailynson has nothing to do with the business
Bailynson, known for his explosive temper, sat calmly between his two, private lawyers with the law firm of Holland & Knight. Attorney LT Lafferty said Bailynson is not a flight risk because he now has a 21-month-old son and his passport was seized during the 2014 raid. Bailynson also owns dozens of condos at Green Terrace, several apartment buildings in suburban Lake Worth and his home.
As for Bailynson’s expletive-laced tirades, Lafferty said Bailynson is a “typical” guy from New Jersey: “He speaks loudly. He likes to be heard.”
Three other defendants indicted with Bailynson were granted bond. Dr. Mark Agresti, facing health care fraud charges for writing prescriptions for unnecessary drug tests, is free on $250,000 bond. Bail was set at $150,000 for Stephanie Curran, a former employee of Good Decisions. Matt Noel, also a former employee, is free on his own recognizance.
Bailynson will be arraigned on July 31.
WHAT THE POST REPORTED
The Palm Beach Post has been investigating corruption in the addiction treatment industry for more than three years. One of the first stories was about Ken Bailynson and Good Decisions. It detailed many of the practices alleged in the indictment. More than 50 people have been arrested by federal and state authorities. To read our investigative coverage, go to www.myPalmBeachPost.com/soberhomes