Addiction treatment center operator Kenneth “Kenny” Chatman on Thursday pleaded not guilty to a sweeping 17-count indictment that accuses him of money laundering, health care fraud and sex trafficking, charges that could send him to prison for life.
The indictment, handed up Tuesday, showcases federal prosecutors plans to shut down what they called the 46-year-old suburban Boynton Beach man’s illicit drug treatment empire. 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 activities, including allegations that he forced women who came to him seeking treatment to instead work as prostitutes, were detailed in December 2015 by The Palm Beach Post.
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.
Five of the six were released on bond after being charged in a criminal complaint in December. They also pleaded not guilty to the new charges this week. The other, Stefan Gatt, a 27-year-old body builder and fitness model who has appeared in three low-budget movies, was not originally charged and is to appear in court Monday.
“It’s the beginning of a long journey,” Chatman’s attorney, Saam Zangeneh, said after the brief hearing before U.S. Magistrate William Matthewman. He pledged to vigorously defend Chatman, who remains jailed as a flight risk and a danger to the community.
At a previous hearing, Assistant U.S. Attorney Marie Villafana suggested she would also ask a grand jury to indict Chatman in connection with overdose deaths that she said occurred at the sober homes he operated. But, she said, those charges would take more time to investigate. Chatman was not charged in connection with any deaths.
Members of Chatman’s family looked on as he stood next to Zangeneh, wearing a navy blue prison jumpsuit with his arms and legs shackled. He answered Matthewman’s questions with a calm, “Yes, sir,” and “No, sir.”
The indictment, which slaps Chatman with 15 new and far more serious charges, builds on allegations made in the criminal complaint.
Rather than treating patients at two licensed treatment centers and more than a dozen sober homes, the indictment claims Chatman made a fortune by taking advantage of them along with insurance companies. He turned female patients into prostitutes by plying them with drugs and threatening them with violence, it says.
He earned extra money by getting kickbacks from five laboratories — in South and Central Florida, Texas and Pennsylvania — to test bogus urine and saliva samples he sent them, according to the indictment. The costs of testing the urine, which often came from employees or clients who were allowed to use drugs, were billed to more than 40 private and federal insurance programs.
Gatt, the new person charged in connection with the scheme, worked at an unidentified lab in the central part of Florida or along its west coast and performed services for another unidentified lab in Texas, the indictment says. Like Chatman and the others, Gatt, who has lived in Boca Raton and Tampa, was charged with conspiracy to commit health care fraud, a crime punishable by a 10-year prison term.
Investigators previously said Chatman received kickbacks from the labs in cash. “He likes to deal in cash because it doesn’t leave a trail,” agents said they were told by people who claimed Chatman got bags containing $150,000 from labs on a monthly basis.
Villafana previously said Chatman lives in a $1 million house, has $250,000 in the bank, owns another home that is worth $400,000 and that his wife was exploring the purchase of a $700,000 home in the Bahamas.
One of the keys to his operation were getting licenses from the Florida Department of Children & Families to operate Journey to Recovery in suburban Lake Worth and Reflections Treatment Center in Margate. As certified treatment centers, they could bill insurance companies for services they provided.
But, as a convicted felon for skimming credit cards, Chatman was barred from getting a license to operate a treatment center. So, even though he operated them and brought so-called patients to them from the numerous sober homes he owned, his wife actually held the license, authorities said. The couple falsely told the state agency that she was the sole owner, according to the indictment.
Drs. Joaquin Mendez and Donald Willems, who worked at the treatment centers as medical directors, were also important cogs in the operation. Both were hired to evaluate patients, develop plans of treatment and order needed tests.
Instead, the grand jury found, both doctors billed insurers for exams that weren’t conducted or for urine tests they knew were fraudulent. Willems prescribed narcotics to patients suffering from addiction even though he didn’t have special certification from the U.S. Drug Enforcement Administration to do so. Instead, he used other doctors’ certification numbers, the indictment says.
The two others indicted — Fransesia “Francine” Davis and Michael Bonds — were employees of the treatment centers and sober homes that went by uplifting names such as Redemption, Turning Point and Stay’n Alive.
Unlike the others, who hired private attorneys, Davis was declared indigent and is represented by an assistant federal public defender. Appearing in court Thursday, the 44-year-old West Palm Beach area woman seemed overwhelmed by the gravity of being indicted on five charges, including three counts of money laundering, maintaining a drug-involved premises and conspiracy to commit health-care fraud.
Out on bond, she declined comment on her situation. “No ma’am,” she said.
What The Post reported
Citing police reports, The Post exposed Kenneth “Kenny” Chatman as a sober home owner who kept women “in a state of impairment in order to ‘pimp’ them out.” The December 2015 story also detailed the drug overdose death of a 27-year-old man in a Chatman sober home. Read the stories at myPalmBeachPost.com