The Dept. of Justice is filing criminal charges against ten people who run drug and alcohol addiction businesses in Orange County, saying the county has overtaken South Florida as the national epicenter for addiction industry fraud.

“The problem was heavily concentrated, historically, in Miami and South Florida. But with active prosecutions (in Florida) the problems have migrated to Orange County,” Assistant U.S. Attorney Benjamin Barron, chief of the Santa Ana Branch Office, said Thursday, Dec. 16.

The Justice Dept. effort, focused on O.C. and dubbed “The Sober Home Initiative,” is expected to reach others in an industry that, in the county, includes hundreds of licensed rehabs and sober living homes.

“This is the beginning, not the end,” Barron said.

Despite new state laws and local efforts to stamp out abuse in the rehab industry over the last four years, the playbook remains largely the same: Private, for-profit addiction treatment centers hire “body brokers” to find vulnerable addicts with good insurance, then pay those body brokers handsomely so that the rehab can bill the insurance company, often for services that don’t meet a patient’s medical needs or are non-existent.

In addition, addicted people are often paid to remain in treatment, and some rehab centers provide drugs to addicts as a way to re-start the lucrative treatment cycle again and again, officials said.

Arrested Thursday, Dec. 16, were Nick Roshdieh, 51, of Aliso Viejo, and Vincent Bindi, 66, of Laguna Nigel. They owned Crest Recovery LLC, doing business as Truvida Recovery, and were charged in an indictment that alleges conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and paying kickbacks for referrals to clinical treatment facilities.

Donald Vawter, 30, of Rancho Santa Margarita, an employee of Truvida, also was taken into custody, as was Michael Hislop, 56, of Boston, a patient recruiter, on charges of conspiring to pay and receive kickbacks for referrals.

If convicted, Roshdieh and Bindi would face a maximum total penalty of 65 years in prison, and Vawter and Hislop would face a maximum total penalty of 35 years in prison, prosecutors said.

Attorneys for the accused could not be reached late Thursday.

The sting has been underway for at least 10 months.

In October, the Justice Department indicted Casey Mahoney, 45, of Los Angeles, and Joseph Parkinson, 32, formerly of Costa Mesa, charging both for their roles in an alleged multimillion-dollar addiction treatment kickback scheme.

According to court documents, Mahoney controlled Healing Path Detox LLC in Huntington Beach and Get Real Recovery Inc. in San Juan Capistrano, and allegedly paid some $2.7 million in kickbacks to Parkinson and other patient recruiters in exchange for patient referrals. Mahoney is also facing charges of money laundering charges for allegedly transferring kickback funds to an account held in the name of a patient broker’s mother.

Parkinson, a patient recruiter, also was charged with currency structuring and possession with intent to distribute fentanyl.

If convicted, Mahoney would face a maximum total penalty of 35 years in prison, and Parkinson would face a maximum total penalty of 165 years in prison.

Darius Moore, 28, formerly of Santa Ana, pleaded guilty Dec. 10 to one count of conspiracy to pay and receive kickbacks for referrals and one count of receiving kickbacks. His sentencing is scheduled for May 13, and he faces a maximum of 15 years in prison.

Adrian Gonzalez, 37, of Laguna Hills, pleaded guilty on Aug. 6 to paying kickbacks for referrals. He’s scheduled for sentencing on Jan. 28, and faces a maximum of 10 years in prison. He controlled Stone Ridge Recovery Inc. and Landmark Recovery LLC, and paid at least $1 million in kickbacks to patient recruiters for patient referrals.

Dorian Ballough, 30, formerly of Costa Mesa, pleaded guilty on Nov. 12 to one count of conspiracy to pay and receive kickbacks for referrals and one count of receiving kickbacks for referrals. He’s scheduled to be sentenced on April 8 and faces a maximum 15 years in prison. As a patient recruiter for multiple facilities, he was paid at least $1.8 million, according to court documents.

Kyle Reed, 29, formerly of Huntington Beach, pleaded guilty on Nov. 19 to one count of conspiracy to pay and receive kickbacks for referrals and one count of receiving kickbacks for referrals. He’s scheduled to be sentenced on May 6 and faces a maximum 15 years in prison. He was paid at least $604,474 as a patient recruiter for multiple facilities, according to court documents.

The initiative was made possible by the federal Eliminating Kickbacks in Recovery Act of 2018, a new law that Barron called a powerful new tool to help in prosecutions. It passed in the wake of the Southern California News Group’s probe of fraud, abuse and death in the industry.

“The suspects in this case specifically targeted vulnerable individuals in recovery and sold them as a commodity with no concern for their health or wellbeing,” said California Insurance Commissioner Ricardo Lara in a prepared statement. “Receiving kickbacks for patient referrals endangers lives and has no place in our health care system.”

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