George Indest HeadshotBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On May 17, 2017, a Florida man who pled guilty to running a health care fraud scheme out of substance abuse treatment facilities he owned was sentenced to 27 years in prison. U.S. District Judge Donald M. Middlebrooks, handed down the sentence to Kenneth Chatman who pled guilty in March 2017 to conspiracy to commit health care fraud, conspiracy to commit money laundering and one count of sex trafficking conspiracy.

Chatman admitted making millions of dollars by taking bribes and kickbacks to treat patients, fraudulently billing insurance companies and providing drugs to addicts so they would relapse in order to seek more treatment. His wife, Laura Chatman, was also allegedly in on the fraud scheme.

Details of the Scheme.

According to prosecutors, Chatman bribed owners of other sober homes to send their residents to get treatment at Reflections Treatment Center LLC in Margate, Florida, and Journey to Recovery LLC in Lake Worth, Florida. The payments were disguised as “case management fees, consulting fees, marketing fees and commissions.” The kickbacks were paid weekly, based on how many insured patients got treatment at the two facilities.

Prosecutors also said that patients were given unnecessary treatments and tests. These included DNA and allergy testing, even when there were no complaints of allergies, urine drug testing and saliva drug testing that was repetitive.

Illegal Kickbacks.

Patients received kickbacks in the form of reduced rent or other benefits to live in the sober homes. The benefits included treatments and drug tests that could be billed to their insurance, even though some of the residents continued to use drugs, the U.S. Department of Justice said.

If patients didn’t comply with the illegal processes, they were kicked out of the sober homes or otherwise intimidated or threatened with legal action, according to the Department of Justice. Kenneth Chatman also confiscated residents’ belongings, such as car keys, telephones, medications and food stamps.

Sex Trafficking Charge.

Additionally, Chapman was accused of forcing female patients and residents into prostitution, prosecutors said. He made them have sex at the facilities, hotels or motels for money and used that money as rent. Chatman provided drugs to the women to induce and encourage the prostitution.

Kenneth Chatman was ordered to register as a sex offender and given five years of probation following his incarceration for the sex trafficking charge. The judge also sentenced his wife, Laura Chatman, to three years in prison for her role in the scheme.

To read more on a similar case of health care fraud, click here to read one of my prior blogs.

Don’t Wait Until It’s Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Fraud and Illegal Kickback Issues Now.

The attorneys of The Health Law Firm represent healthcare providers in Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at or call (407) 331-6620 or (850) 439-1001.


Bolado, Carolina. “Fla. Sober Home Owner Gets 27 Years For Fraud Scheme.” Law360. (May 18, 2017). Web.
“Florida sober homes owner gets 27+ years’ prison for fraud.” Fox 35 News. (May 18, 2017). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

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