On January 8th, 2020

Los Angeles Rehab Center Owner Pleads to Healthcare Fraud

LOS ANGELES – On January 6, 2020, the founder of a Los Angeles drug and alcohol treatment facility pleaded no contest to running a $175 million fraudulent healthcare billing scheme.

Christopher Bathum, 58, entered the plea to 14 felony counts:

  • seven counts of grand theft,
  • five counts of insurance fraud
  • and one count each of identity theft and money laundering.

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.

“This case involved strong investigative work and the drive to see it through to prosecution,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.  “It serves as an example as to why investigators at the California Department of Insurance are so important to the state, the industry, and those of us who pay insurance premiums.”

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.

According to Los Angeles County Deputy District Attorney Shaun Gipson of the Healthcare Fraud Division, Bathum owned and operated Community Recovery of Los Angeles and other entities in Southern California and Colorado.

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.

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. 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.

“This was a massive and abusive healthcare fraud scheme that we began to investigate when I was Insurance Commissioner,” said former Commissioner Dave Jones.  “The defendant, Chris Bathum, committed numerous acts of sexual assault. Kudos to the detectives at the California Department of Insurance and the investigators and prosecutors at the LA County District Attorney’s office for their successful work on this investigation and prosecution.”

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