Doc who reaped $127M off sober-home drug tests pleads guilty to health care fraud
Palm Beach Post (FL)
A Delray Beach doctor who pocketed more than $127 million by forcing people struggling with addiction to undergo bogus tests pleaded guilty on Tuesday to conspiracy to commit health care fraud.
Dr. Michael Ligotti faces a maximum 20-year prison sentence for taking advantage of scores of vulnerable patients and billing their insurance companies for tests medical experts said were clearly unnecessary.
Those who spent years trying to get authorities to take action against the 48-year-old owner of Whole Health Medical Center said they were heartened that Ligotti had finally been held accountable. But, they said, foot-dragging by the Florida Board of Medicine and other regulators caused many to suffer needlessly.
Kenneth Bailynson case: West Palm sober home operator gets 6 years in prison in $31.3 million health fraud scheme
Kenny Chatman case: Woman who ran sober homes headed to prison for role in Kenny Chatman's million-dollar fraud scheme
Federal fraud: Charge against Palm Beach Gardens lawyer alleges he stole $1.6 million in COVID relief loans
"It's horrifying that we allow this type of practice in Florida," said Maureen Kielian, who heads up Southeast Recovery Advocates.
She bristled at the notion that the only ones who were hurt were insurance companies, who paid thousands of bills Ligotti submitted from May 2011 until shortly before his arrest in July 2020.
"Is it fraud really?" Kielian asked. "Is it that or is it that he abused his license, he abused people who were seeking help and caused deaths?"
Miami lawyer Jose Quinon, who represents Ligotti, didn't return an email for comment.
Michael Ligotti's operation far bigger than other drug-recovery kingpins
Like all but a handful of those who have been prosecuted since the crackdown on South Florida's illicit addiction industry began, Ligotti wasn't accused of causing any deaths.
He instead faced 13 charges, including health care fraud and money laundering. When he agreed to plead guilty to a single count of conspiracy to commit health care fraud, the other 12 charges were dropped.
But even compared with others who have been prosecuted in the last decade, Ligotti's operation stands out.
The amount of money he raked in far outstrips the $31 million Kenneth Bailynson made in illicit profits by operating a West Palm Beach sober home and testing lab.
It was far more than the $16 million notorious operator Kenny Chatman was forced to pay insurers in connection with his far-flung addiction treatment scam. Chatman, who lived near Boynton Beach, infamously forced women who came to him for help to work as prostitutes.
According to federal prosecutors, Ligotti's operation was massive. He billed insurers $746 million and was paid $127 million.
He was able to amass such wealth by serving as medical director for more than 50 sober homes, substance-abuse treatment centers and clinical-testing laboratories in South Florida, prosecutors wrote in court papers.
As medical director, Ligotti fueled the operation. Without his signature on orders, insurance companies wouldn't pay for the tests.
Realizing they needed his help for their illegal operations to thrive, other unscrupulous operators agreed to send their patients to Whole Health, prosecutors said. Kickbacks and bribes fueled the illegal quid pro quo arrangement, prosecutors said.
Ultimately, however, those who benefited from Ligotti's help turned against him, prosecutors said. Those who cooperated in the investigation weren't identified by name.
But one is believed to be Eric Snyder, owner of the former Real Life Recovery and Halfway There in Delray Beach, where Ligotti served as medical director. Sentenced to 10 years in prison in 2019 after pleading guilty to conspiracy to commit wire fraud, Snyder has been allowed to remain free so he can testify against others.
Ligotti also served as medical director of Academy Health Solutions in Lake Park, court records show. Its former owners, Mimi, David and Levi Bieda, were also prosecuted on patient brokering charges in Palm Beach County Circuit Court.
FBI: Michael Ligotti kept scam going after denying it to state regulators
In court papers, FBI agents said Ligotti tried to hide his illegal activities. Worried he was under investigation in 2013, he wrote a letter to state regulators.
"I was astonished and outraged to learn that my name and license may be currently used in an unauthorized fashion by entities involved in the treatment of patients/clients in recovery for drug and alcohol dependence," he wrote.
But, agents said, the letter was a sham. "In the nearly seven years since Ligotti drafted it, he continued to authorize addiction treatment centers and sober homes to order medically unnecessary urine drug tests through the laboratories," they wrote in 2020.
Ligotti also put his $5.1 million home and another $855,000 residence he owned on the market and unsuccessfully tried to declare bankruptcy to hide his assets, investigators said in court papers.
In court papers, Ligotti said he put the house on the market because he got a job in Maine and planned to move.
Ultimately, when he realized he was the target of the FBI investigation, he in 2020 shuttered Whole Health and put the building on Southeast Sixth Avenue up for sale, investigators said.
By then, Southeast Recovery Advocates' Kielian said, the human cost of Ligotti's operation was enormous. She and grieving mothers who lost children who went to Ligotti for help wrote letters to the state Board of Medicine asking that it yank his license. Protests were held outside the clinic to emphasize the need to act.
But, Kielian said, even though it's been more than two years since his arrest, Ligotti's medical license is still active, according to the state Department of Health's online records.
State health officials didn't return an email for comment to explain why Ligotti hasn't lost his medical license. Kielian said regulators told her that once the FBI gets involved, they let the criminal investigation proceed before acting.
Kielian said she expects parents of Ligotti's patients to testify against him when he is sentenced Dec. 13.
"We will be there in force to support every parent who has the guts and courage to stand there and relive the most terrible moments of their lives," she said.
Jane Musgrave covers federal and civil courts and occasionally ventures into criminal trials in state court. Contact her at [email protected].