The the Los Angeles County District Attorney’s Office announced that the founder of Community Recovery Los Angeles, a drug and alcohol treatment facility, pleaded no contest to running a $175 million fraudulent healthcare billing scheme.
Over the years, Community Recovery grew into a veritable empire, comprising more than 20 sober-living houses and outpatient clinics in Anaheim, West Adams, Calabasas, Malibu, Woodland Hills, Hollywood and Colorado.
The owner, 58 year old Christopher Bathum, entered the plea this week to 14 felony counts: seven counts of grand theft, five counts of insurance fraud and one count each of identity theft and money laundering.
The California Department of Health previously issued a number of cease-and-desist letters against CRLA houses, accusing them of being unlicensed drug and alcohol treatment centers. At one point, a judge granted an injunction against two CRLA facilities – on Melrose and in Calabasas – which ordered them to stop providing treatment.
Around 2016, Bathum publicly stepped down as head of his own company, which then changed its name to Commonwealth Global.
Sentencing is scheduled on Feb. 14 in Department 105 of the Foltz Criminal Justice Center. Bathum faces 20 years in state prison as a result of the plea.
Co-defendant Kirsten Wallace was sentenced in 2018 to 11 years in state prison after she pleaded no contest to 46 felony counts related to the same healthcare billing scheme.
The two defendants obtained multiple health care insurance policies for their clients, using their personal identifying information and falsified the clients’ circumstances to obtain the policies. The patients were unaware that policies had been issued in their name, the prosecutor said
Bathum and Wallace also billed for former clients after their treatment ended while those clients were still working at CRLA and no longer receiving treatment.
Between June 2012 and December 2015, Bathum and Wallace fraudulently billed an estimated $175 million. In most instances, bills were sent for services never provided. About $44 million was paid out by five insurance companies, the prosecutor added.
Additionally, Bathum was convicted last year of 31 felony counts for sexually assaulting seven women at his rehab facilities in case BA451669. Sentencing in that case also is scheduled on Feb. 14.
The cases were investigated by the Los Angeles County Sheriff’s Department, the Los Angeles County District Attorney’s Bureau of Investigation and the California Department of Insurance.