‘Rehab Mogul’ Pleads No Contest in $175M Billing Scheme; Outpatient Mental Health Provider Settles False Claims Suit

The one-time owner of more than a dozen Los Angeles-area substance abuse treatment centers has been indicted on charges he operated a massive $175 million billing scheme.

Robert Bathum, who has called himself the “Rehab Mogul,” pleaded no contest Monday in Los Angeles County Superior Court to 14 felony counts of grand theft, insurance fraud, identity theft and money laundering, according to the Los Angeles Daily News.

The charges are related to Bathum’s Community Recovery drug and alcohol treatment centers. He previously ran nearly 20 centers between LA and Colorado.


Prosecutors have accused Bathum and a co-defendant, Kirsten Wallace, of collecting information on patients without their consent, and subsequently using that information to bill insurers for millions of dollars in services that were never delivered.

Bathum, who is scheduled to be sentenced next month, could face up to 20 years in state prison, according to the Associated Press.

In 2018, Wallace was sentenced to 11 years in prison after pleading no contest to 46 felony charges related to the scheme.


Additionally, Bathum was also convicted last year of sexually abusing seven female patients at his facilities. He is due to be sentenced at the same hearing on 31 counts of assault.

Philadelphia mental health provider enters $1.65M settlement

Meanwhile in Philadelphia, an outpatient mental health facility has agreed to pay the federal government $1.65 million to settle a lawsuit accusing the company of fraudulently billing Medicaid.

As part of the deal, Tree of Life Behavioral Services will pay to bring an end to a False Claims Act suit brought by the U.S. Attorney’s Office and the U.S. Department of Health and Human Services’ Office of the Inspector General (OIG).

The defendants deny any wrongdoing and say the settlement does not represent an admission of guilt.

News and documents pertaining to the settlement were first published by Law360.

Former employee Erika Desjardins initially filed the suit against Tree of Life in 2014, after claiming she was fired from her post as a clinical director for not going along with the defrauding plan.

Government officials say that the scheme involved the facility and its owners, Ada Vidal and Victor Vidal, who submitted thousands of Medicaid claims that were never delivered or that were inflated.

In some instances, signatures of psychiatrists and therapists were said to have been forged, and some of the claims on services were supposedly for dead former patients, according to the Philadelphia Business Journal.

Desjardins will receive $330,000 of the government’s portion of the deal, Law360 reported.

Tree of Life is also barred from participating in any federal health care programs for 25 years; the facility officially ceased operations on December 30th.

Additionally, Victor Vidal has been prohibited from directly participating in any such programs for 15 years, and Ada Vidal for 20 years.

An OIG spokesman told Law360 that the agency was unable to comment on the case because it’s still pending.

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