A federal court hearing this morning to decide just how many millions Kenneth “Kenny” Chatman will have to pay back to insurance companies he defrauded with his corrupt drug treatment centers has been cancelled, pending a settlement that has not yet been announced.
The number could have been eight figures, after Chatman admitted that his phony treatment centers — Reflections in Broward County and Journey to Recovery in Lake Worth — collected between $9.5 million and $25 million in insurance reimbursements.
While most of the defendants already have reached agreements with federal prosecutors about how much restitution they’ll have to pay, Chatman’s lawyer, Saam Zangeneh, said Tuesday that negotiations were ongoing.
Chatman’s number could dwarf any of his co-defendants, six of whom have been ordered to pay back millions.
In a case that has garnered national attention, Chatman was sentenced to 27½ years in prison in May for creating fraudulent drug treatment centers and a series of affiliated sober homes that were houses of horror.
He admitted to holding female patients captive and turning them into prostitutes. Former doctors and employees said the businesses were shams, designed not to treat patients but to rack up millions in insurance money. And multiple patients overdosed and died under his care.
A federal prosecutor called him “the most dangerous” player in Florida’s drug treatment industry, much of which is corrupt, leading to more than 30 arrests in Palm Beach County alone since October.
Chatman is appealing his sentence.
Just how much anyone will end up paying is unknown. Federal restitution holds a group of people responsible for paying off a large pool of money, with some defendants having different thresholds of responsibility. Some could pay more than they should, others less.
In the Chatman case, six of the eight defendants are responsible for millions. The amounts differ by defendant and how long they were involved in the fraud.
Chatman’s wife, Laura, has been ordered to pay back the most so far: $7.7 million.
One of his longest-serving employees, Fransesia “Francine” Davis, is on the hook for $7 million, even though she earned very little while working for Chatman.
Dr. Donald Willems’ threshold is the smallest, at about $3 million.
Each of the defendants — except for Davis, who argued last week that she would be too poor to afford commissary items — will have half of their prison earnings go toward restitution. After they get out of prison, 10 percent of their earnings will go toward restitution, until their thresholds are reached.
Another defendant, bodybuilder and lab owner Stefan Gatt, will have to pay a separate $3.7 million to insurance companies. Chatman also will have to pay some of that amount.
WHAT THE POST FOUND
The Post pieced together police reports and witness testimony in December 2015 to expose Kenneth “Kenny” Chatman as an operator who allowed drug use in his sober homes and forced addicts into prostitution. One year later, a federal investigation led to his prosecution. Read the coverage at myPalmBeachPost.com