Former Operators of Addiction Treatment Facilities Convicted of Fraud Scheme

The Department of Justice released a statement Thursday announcing the conviction of two operators of two addiction treatment facilities in South Florida. The operators were Jonathan Markovich and his brother Daniel Markovich, who operated Compass Detox and WAR Network LLC (WAR). Compass Detox is an inpatient and detox residential facility, while WAR is a related outpatient treatment program.

The Markovichs were convicted of the fraudulent billing of “approximately $112 million for services that were never provided or were medically unnecessary.” Jonathan Markovich faced an additional conviction of money laundering and bank fraud in connection with Paycheck Protection Program (PPP) loan applications, where he stated that neither company was engaged in illegal conduct.

The unnecessary treatments that were billed for were also procured through illegal kickbacks. The statement by the DOJ detailed that evidence showed “that defendants obtained patients through patient recruiters who offered illegal kickbacks to patients,” including things such as free airline tickets or even illegal drugs. When patients were first introduced to patient recruiters, the recruiters gave them illegal drugs to ensure they could be admitted for detox, which was the defendant’s most expensive treatment. After patients were admitted, the defendants would shuffle a specific group of patients between the two facilities in order to bill them as much as possible and “maximize revenue.”

Patients of Compass Detox were also given a “Comfort Drink.” While they were under the impression that the Comfort Drink was a part of their treatment, its real intention was to keep them “compliant and docile… [and] ensure they stayed at the facility.” In addition to the Comfort Drink, patients were routinely “given large and potentially harmful amounts of controlled substances.” These efforts were all intended to keep the patients coming back and cycling through the two facilities.

Assistant Attorney General Kenneth A. Polite Jr. said that the convictions “further demonstrate the success of the Department of Justice’s Sober Homes Initiative in protecting patients and prosecuting fraudulent substance abuse treatment facilities.”

Both of the defendants were convicted of conspiracy to commit wire fraud and health care fraud. Jonathan Markovich was convicted of eight counts of health care fraud, whle Daniel Markovich was convicted of two. Other convictions included conspiracy to pay and receive kickbacks, paying and receiving kickbacks, conspiracy to commit money laundering, concealment money laundering, laundering, and bank fraud. The defendants will be sentenced on January 13, 2022. They each face a maximum sentence of 20 years for health care fraud and wire fraud, though Jonathan Markovich will be sentenced based on his additional charges of money laundering and bank fraud.