Sober-home owner duped him, doctor says in court

Palm Beach psychiatrist Dr. Mark Agresti, who served as medical director for Good Decisions Sober Living, faces a decades-long sentence if convicted of a charge of conspiracy to commit health care fraud and 11 counts of health care fraud.

FORT LAUDERDALE -- Dr. Mark Agresti readily admitted on Wednesday that he was the unwitting mastermind behind a $31.3 million insurance fraud scheme.

Testifying in his own defense, the Palm Beach psychiatrist told a federal jury that he wanted residents of Good Decisions Sober Living tested frequently for a wide array of drugs.

However, he said, he didn't order the expensive urine tests to rake in millions from insurance companies. It was to keep the residents sober and safe.

"This was a high-risk population," Agresti said of the young people who lived at the rundown condominium complex on Georgia Avenue in West Palm Beach while fighting their addictions.

"If you don't test frequently, you know what that means to the people being tested? Use."

Later, when he discovered his medical license had been used by sober home owner Kenneth Bailynson to get rich, he said he was stunned.

"It's mind-bending. It's shocking. It blows my mind," said the 59-year-old Agresti, who was medical director of the sober home. "It's extremely upsetting that I was part of it."

Agresti, who faces a decades-long sentence if convicted of a charge of conspiracy to commit health care fraud and 11 counts of health care fraud, said he was duped by Bailynson.

The 49-year-old former CPA - who two weeks ago testified that Agresti knew the urine tests were liquid gold and willingly ordered roughly 30,000 of them - is a con man and a liar, the physician testified.

But, Agresti said, he didn't know that until it was too late.

The Bailynson he met in 2011, when he agreed to serve as the medical director of Good Decisions, was nothing like the cocky man who bragged to jurors about how much money he raked in from gambling and made no apologies for his lucrative scheme by announcing, "I'm greedy."

"It was like watching Lex Luthor in that chair," Agresti said, comparing Bailynson to the comic book villain that was Superman's nemesis.

The man, who came to his office to pitch his idea for a sober home was far different, said Agresti.

"He came across as very charming," said Agresti, who served also served as medical director of a half-dozen other sober homes and was director of psychiatry at the former Columbia Hospital in West Palm Beach. "He was very intelligent."

Bailynson, who pleaded guilty to conspiracy to health care fraud and testified against Agresti in hopes of reducing a 10-year prison sentence he faces, was the prosecution's star witness against Agresti.

The scheme couldn't work unless Agresti ordered the tests and assured insurance companies they were medically necessary.

Assistant U.S. Attorney James Hayes pointed out that other prosecution witnesses also questioned Agresti's tactics.

Dr. Margaret Jarvis, a Pennsylvania psychiatrist who reviewed records of Good Decisions patients, testified last week that Agresti should have reviewed the results of the lab tests before ordering additional ones, Hayes said.

Agresti said that staff members at Good Decisions reviewed the test results and called him if they had questions. They weren't reviewing complex medical exams. They were only looking to see if a resident tested positive, he said.

Those who did were told they would have to leave the sober home immediately and go to a treatment center or return to their families, he said.

However, Hayes pointed out, it often took labs three to five days to return the results. A simple test, one that was a fraction of the cost, could immediately detect whether a patient had taken drugs so they could get help immediately.

However, insurance companies only reimbursed the sober home about $300 for a simple test, while they sent a check for at least $1,500 for the more detailed ones Agresti ordered that screened each urine sample for as many as 80 different drugs.

Agresti said he wasn't paid based on the number of tests he ordered. Bailynson, who also opened up a lab to increase his profits, admitted he made between $13 million to $15 million from the scheme.

In contrast, Agresti was paid a monthly salary. At the beginning, he was paid $1,750 a month. His monthly income increased as the number of people living at Good Decision swelled from about 25 to roughly 250. Before he resigned in September 2015, he was making $9,000 a month, he said.

He denied Bailynson's claims that he was often paid $9,000 in cash in the months before the sober home was raided by the FBI in September 2014.

Even if the results were delayed, the tests served as important deterrents, Agresti said. People struggling with addiction were far less likely to relapse if they knew they were going to get tested regularly.

South Florida and the nation were in the middle of an opioid pandemic, he said. As a psychiatrist who specialized in treated people with addiction, he said he had seen far too many people die. Frequent testing was a way to stop the cycle of treatment, relapse and overdose deaths, he said.

"That's what kept this community safe and that's what was important - to keep each member of this community from overdosing and dying," he said of why he embraced frequent testing.

To increase profits, Bailynson said the residents were tested every other day. But, Agresti said, that wasn't his intention.

He said he embraced a "step-down protocol." During the first four months, people were to be tested three times a week. During the next four months, they were to be tested twice a week, and during the final four months, one test would be administered each week.

When Hayes pointed to patient charts that showed people who had been at the facility for months were being tested at least three times a week, Agresti said he didn't authorize them.

Bailynson switched to a computerized system for patient records. He said neither he nor his staff ever mastered it.

Any lab tests that were authorized in the system had to be done by someone else, he said.

"I didn't put orders in the (electronic) system," he said. "It just wasn't me. It was a fabricated order. ... I didn't know how to use the (electronic) system."

Hayes tried to debunk Agresti's claims of innocence and ignorance by pointing out that he initially told an FBI agent he never ordered the more expensive tests. Agresti said the FBI report was flawed.

What he told the FBI was that he never ordered the tests to be done every other day, he insisted.

FBI Agent William Stewart testified that he vividly remembered Agresti's denial. By then, he had records that showed more than $89 million worth of claims had been filed for the tests that were ordered by Agresti. His denial contradicted the records, he said.

Ultimately, $105.5 million of claims were filed. Of that, $31.3 million was paid by insurers.

Looking back, Agresti said he made a terrible mistake by trusting Bailynson. He said he envisioned creating a cutting-edge sober home community, where people struggling with addiction would get well.

"He morphed this whole thing that was a good thing into a criminal enterprise," Agresti said. "The biggest regret of my life was not resigning sooner. I was in over my head."

Closing arguments are scheduled for Thursday morning. Then the jury will begin deciding Agresti's fate.

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Palm Beach psychiatrist Dr. Mark Agresti, who served as medical director for Good Decisions Sober Living, faces a decades-long sentence if convicted of a charge of conspiracy to commit health care fraud and 11 counts of health care fraud.