Rehab Riviera fraud: Tustin man gets 15 months for patient brokering scheme (2024)

Some folks have gone so far as to call it a form of human trafficking — “body brokers” bribing folks with good private health insurance to come to California for addiction treatment, whether folks really want treatment or not.

The brokers and patients get paid thousands of dollars by the rehabs. The rehabs then bill insurers many, many thousands more. It’s an investment with fabulous returns, if you don’t get caught.

But sometimes, you get caught.

Kevin M. Dickau, 35, of Tustin, pleaded guilty to conspiracy to commit health care fraud by videoconference before U.S. District Judge Peter G. Sheridan on April 23, according to the Department of Justice. He was sentenced to 15 months in prison and three years of supervised release.

We’ve been reporting variations on this story for many, many years now. Dickau was part of a multistate scheme “in which he directed recruiters to bribe drug-addicted individuals to enroll in drug rehabilitation and received referral fees from the rehabilitation centers,” U.S. Attorney Philip R. Sellinger said in a prepared statement.

Six others have already pleaded guilty in connection with this particular scheme: Peter Costas of New Jersey, Seth Logan Welsh of Maryland, John C. Devlin of Maryland, Akikur Mohammad of West Hills, Lauren Philhower of Los Angeles, and Anastasia Passas of Arkansas.

They brokered “scores” of patients, according to the DOJ. The conspiracy bled millions of dollars from health insurers.

Rehab Riviera fraud: Tustin man gets 15 months for patient brokering scheme (1)

It works like this

Mohammad, Philhower and Passas ran rehabs here in California. Dickau, Welsh and Devlin ran a marketing company. The marketers enticed “individuals addicted to heroin and other drugs” to enter the rehabs. The rehabs paid referral fees of $5,000 to $10,000 per patient.

“The marketing company also engaged a nationwide network of recruiters – including Costas in New Jersey – to identify and recruit potential patients, from New Jersey and other states, who were addicted to heroin or other drugs and who had robust private health insurance,” the DOJ said.

“To convince drug-addicted individuals to travel to and enroll in rehabilitation when they otherwise would not have, Costas and other recruiters offered to bribe them – often as much as several thousand dollars – with the approval of Dickau, Welsh and Devlin.

“Once the patients agreed to enroll in drug rehabilitation in exchange for the offered bribe, Dickau, Welsh, Devlin and Costas would arrange and pay for cross-country travel to the drug treatment centers in California and other states, in concert with the owners of the facilities themselves, including Mohammad, Philhower and Passas.

“Costas would stay in touch with the New Jersey patients at the facilities and specifically instruct them to stay at the facilities long enough to generate referral payments,” the DOJ said.

New laws have been passed expressly forbidding this type of thing, but we have it on rather good authority that it continues to happen every single day.

Legally, it’s approached as health care fraud, focusing on the money rather than the toll it takes on human beings.

People suffer

We think of the patient flown into LAX, taken to a park in Santa Ana, given Xanax and then injected in the neck with methamphetamine— so the patient would test positive for drugs and be eligible for expensive detox treatment, according to federal court filings.

Rehab Riviera fraud: Tustin man gets 15 months for patient brokering scheme (2)

We think of the woman who came from New Jersey to Florida to California in “the shuffle,” wound up on the street when health benefits ran dry, became addicted to fentanyl. Her parents parachute to L.A. periodically to track her down and see if she’s still alive.

“Why aren’t things changing?” Melissa Delise Ruby, who runs the 6,600-plus member “It’s Time for Ethics in Addiction Treatment” group on Facebook, asked recently after an insurer sued SoCal rehabs, saying they were little more than drug dens .

“The overall consensus is, ‘These people don’t matter anyway. Let them die. It’s easier that way.’ It’s investigated on the health care white collar crime level, not for the human trafficking, the deaths, the drugging, the horrific things that are happening to these people.”

When the OC District Attorney charged Dylan Walker with 62 counts of patient brokering, for which he faced up to 62 years behind bars, the court reduced felonies to misdemeanors. Walker pleaded guilty and was sentenced to just one year of informal probation and $267,483 in restitution in 2021. “Unconscionable,” outraged OCDA Todd Spitzer said at the time.

The DOJ tipped its hat to the FBI in Newark and Los Angeles, and the Orange County District Attorney’s Office, for its help on this case. But despite new state and federal laws targeting this kind of patient brokering, prosecutions are few and far between and the fraud is incredibly hard to control.

“From the insurance fraud angle, there are so many different violations of the law that occur, and it’s so lucrative and the dollar amounts are so high,” David Stark, health care fraud investigator with the Orange County District Attorney’s office, told the Southern California Sober Living Task Force recently.

Rehab Riviera fraud: Tustin man gets 15 months for patient brokering scheme (3)“Unfortunately — and this does really impact the local communities — the resources we have for investigating, the length of time of these investigations, the lengthy court process and then, in the end, the short jail sentences that they receive — it encourages recidivism,” he said.

Indeed. Stark’s last assignment was as a human trafficking detective. Patients here on the Rehab Riviera strike him as victims caught in a similar web.

“We’ve had conversations with people who have been convicted and have been in state and federal prison,” Stark said. “We ask, ‘What are you going to do when you get out?’ They say, ‘I’m going to go right back to it.’ Why wouldn’t they? If you’re making that much money with that little penalty …. “

Legal types tell us health care fraud is a much more clear-cut type of case to prosecute successfully, and the behavior here might not square completely with the definition of trafficking (“transporting or coercing people in order to benefit from their work or service, typically in the form of forced labor or sexual exploitation”).

But it seems that the harm here involves way more than just money. It might help if the justice system acknowledged that and tackled the human misery these schemes can leave in their wake.

Rehab Riviera fraud: Tustin man gets 15 months for patient brokering scheme (2024)
Top Articles
Latest Posts
Article information

Author: Nicola Considine CPA

Last Updated:

Views: 6079

Rating: 4.9 / 5 (49 voted)

Reviews: 88% of readers found this page helpful

Author information

Name: Nicola Considine CPA

Birthday: 1993-02-26

Address: 3809 Clinton Inlet, East Aleisha, UT 46318-2392

Phone: +2681424145499

Job: Government Technician

Hobby: Calligraphy, Lego building, Worldbuilding, Shooting, Bird watching, Shopping, Cooking

Introduction: My name is Nicola Considine CPA, I am a determined, witty, powerful, brainy, open, smiling, proud person who loves writing and wants to share my knowledge and understanding with you.