A flat bungalow parked on a crab-grass lawn less than two miles from the beach in suburban South Florida — that’s where, from 2011 to 2014, many a struggling addict hoped they would find their happy ending. For those years, the location housed Halfway There, a sober home geared for 20-somethings trying to shake loose from addiction.
But more was happening inside than treatment. In December 2014, state and federal investigators raided the offices’ of the sober home’s chief executive, Eric Snyder, as part of a larger fraud investigation.
Two and a half years later, on Tuesday, the sober home entrepreneur was arrested with another former employee, Christopher Fuller. According to federal prosecutors, the operators used the sober home and a related abuse treatment facility as piggy banks, bilking insurance companies for $58 million in fraudulent claims. The operators fed their enterprise by aggressively recruiting residents, resorting to bribes, strip club trips, and even drugs to keep the beds full, prosecutors said.
Both men are charged with conspiracy to commit health-care fraud. Snyder’s attorney, Bruce Zimet, told the Post his client has had numerous discussions with investigators since the 2014 raid. “I’m not sure why they decided to file a complaint this week, but we anticipate having additional conversations where we will present information which we believe will mitigate against them going forward with an indictment,” the attorney said. “He doesn’t really fit your profile of a fraudster. He has literally saved scores of lives.”
Fuller’s attorney did not reply to an email requesting comment on this week’s complaint.
The accusations are among a wave filed this week against more than 400 people across the country charged with participating in health-care fraud scams totaling about $1.3 billion in false billings, including for the prescription and distribution of opioids.
The charges come as scrutiny tightens around South Florida’s sober home industry, a business accounting for $1 billion of annual revenue in Palm Beach County alone.
Supplying — not stopping — addiction was the region’s moneymaker a decade ago. South Florida was ground zero for the pain clinic epidemic that marked the first significant leg of the current opioid crisis; according to the Miami New Times, between 2008 and 2010, “Florida doctors purchased nine times more oxycodone than doctors in the other 49 states combined.” The Palm Beach Post reported that year that of the 199 sober homes voluntary registered with the state’s trade agency, 118 are in Palm Beach County.
The town of Delray Beach is now known as the “recovery capital of America.” Halfway There was among the hundreds of local halfway houses, residential facilities, inpatient clinics, and private treatment hospitals located in the beach community. And despite the current charges, many online posters have spoken positively about their experience at the facility.
Sober living doesn't have to be a bummer – Check out our community in Delray Beach, FL. Scholarships Available. http://t.co/qyfXlSjeET
— Halfway There (@HalfwayThereFla) March 3, 2015
The facility earned attention for its social media focus, as well as pet-friendly housing rules and willingness to offer lowered rents.
I can't afford the cost. #5WordDealBreakers – WE OFFER SCHOLARSHIPS TO ANYONE SERIOUS ABOUT GETTING SOBER IN SOUTH FLORIDA. 561-245-2260
— Halfway There (@HalfwayThereFla) March 11, 2015
“It’s not hard to tell that they really care about you,” a former resident named Colt says in a video on Halfway There’s YouTube page. “This program definitely helped me build a strong foundation on living again a better life,” a recovering heroin addict named Chris adds in his own video. “The vibe is just really cool and makes the kids want to come back and come to groups and come to their sessions,” a woman named Lindsay testifies.
Owner Snyder likely knew well the dark corner addiction drove his residents into. According to a detailed Palm Beach Post profile, he was a recovering opiate addict from New Jersey who arrived in Florida in October 2009 after completing a 30-day treatment program. A year later he was living and working in a Delray Beach sober home when the owner left town as a bank was set to foreclose; Snyder and a friend simply took over the property. By the end of 2010 he had filed papers with the state for the operation of the sober home company that would eventually become Halfway There. In May 2011, he registered an addiction treatment facility, Real Life Recovery.
The laundry list of bad acts alleged in an FBI affidavit filed this week in federal court is considerable. According to the report, shortly after the September 2014 raid, a high-ranking staffer with the sober home contacted the FBI. The informant — who is not named in the document — told investigators Snyder would regularly overbill clients’ insurance. “For example, if a patient was discharged” on the first day of a given month, the home would “continue to bill that client’s insurance company for treatment through the end of the month.”
Within a few weeks, investigators also spoke to patients who reported their insurers were billed for services they didn’t receive: One former resident reported never going to treatment sessions on the weekend, yet once being billed $2,754 for a Sunday session; another patient recalled being billed for daily treatments while the patient couldn’t possibly have been at the house — he was serving a jail sentence for a probation violation.
The urine tests were another well-greased scam at the homes, investigators allege. The affidavit notes former employees said Snyder’s businesses would routinely collect urine samples “multiple times a week.” They could all be billed to the insurance.
But to run up the dollar signs, the employees were instructed to pour one sample into two different cups — doubling the profit. Different samples were also mixed together to create more. And instead of using in-house easy tests, the homes would ship the samples out to labs, increasing a $5-$10 expenditure to a much more pricey option. The drug tests also were worthless — if a resident failed, they were not forced to leave.
Volume was key to the fraud, investigators say, and Snyder allegedly was willing to go to extreme — and illegal — lengths to keep feet walking through the door. Under Florida and federal law, patients and residents in treatment facilities and sober homes cannot receive kickbacks or bribes for their attendance. But Snyder, the affidavit says, would knock down the weekly $200 rent for residents if they went — and were then billed — for a set number of treatment sessions. According to the affidavit, the owner allegedly told one employee he would rather “eat $200 to make $5000.”
Finding residents fell to “junkie hunters,” including Christopher Fuller. The affidavit describes these as essentially headhunters who were paid off the books to keep new residents coming. Witnesses told investigators Fuller would troll around AA meetings for susceptible addicts, and also had tipsters among the staffs at shady motels where addicts regularly got high. Fuller also allegedly “was known to give clients drugs or alcohol as an enticement to attend” the programs, the affidavit says. Former employees told investigators that when they informed Fuller the addicts he was dropping off couldn’t enter the program when they were still high or using, Snyder intervened, enrolling them anyway.
Fuller, witnesses also told investigators, would “frequent strip clubs, casinos, and hotels and restaurants with patients and employees.”
Investigators say Snyder was bilking the system from his earliest days in the business. “From at least January 1, 2011 through September 30, 2015,” the affidavit says, Snyder “submitted claims of approximately $58,209,385 to these Insurance plans.” In turn, investigators say, insurers gave Snyder $18,656,743.
Snyder faces numerous regulatory and legal headaches in addition to his current federal charges. He faces an ongoing lawsuit filed on behalf of the family of Nicole Cronin, a 20-year-old Halfway There resident who overdosed after being kicked out of the home in 2012.
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