Bathum presented himself as a trusted confidant and mentor to his patients — particularly to young, broken women wrestling with addiction. He made vulnerable young women feel special, showering them with “internships” and access to company cars and iPhones, prosecutors said in court, according to the Orange County Register.
But he also used their weaknesses — the addictions he was supposed to help them overcome — to lure the women with drugs, get them high, and then sexually assault them.
On Monday, Bathum was convicted of sexually assaulting seven women, according to the Los Angeles County District Attorney’s Office. The 56-year-old was found guilty of 31 counts, including rape, sexual penetration by foreign object, forcible oral copulation and sexual exploitation.
Prosecutors said Bathum preyed upon the female patients who were in their 20s and early 30s between 2014 and 2016. Several of the assaults took place at his treatment facilities, prosecutors said.
“They were easy targets,” Los Angeles County Deputy District Attorney Reinhold Mueller said in his closing arguments, according to the Orange County Register. “They were perfect victims.”
Bathum now faces up to 65 years in state prison when he is sentenced in April. He was acquitted Monday of several counts of sexual exploitation and one count of offering a controlled substance, methamphetamine. The jury was hung on one count of rape by use of drugs and two counts of sexual penetration by a foreign object.
In recent years, Bathum has repeatedly denied all allegations of sexual misconduct to local and national news outlets. His attorney, Carlo A. Spiga, told the jury that the evidence did not show that “any of these acts were forcible,” according to the Orange County Register. He credited Bathum with helping scores of people at his treatment centers.
Bathum’s case is part of a wider pattern of sexual misconduct at rehab centers, according to state statistics cited by the Southern California News Group. The No. 1 complaint from clients involving the rehab industry is sexual misconduct, according to a 2013 investigation by the California Senate Office of Oversight and Outcomes. Since 2015, state regulators have investigated and closed 78 complaints of alleged sexual misconduct at rehab centers, according to the Department of Health Care Services, the Southern California News Group reported.
Bathum faces additional charges in a separate case accusing him of running a $175 million fraudulent health-care billing scheme to lure addicts to his treatment centers, according to prosecutors. Bathum and his former chief financial officer, Kirsten Wallace, were each charged in November 2016 with 31 counts of money laundering, eight counts of grand theft, six counts of identity theft and five counts of insurance fraud. Both pleaded not guilty.
State Insurance Commissioner Dave Jones described the scheme as “one of the largest health-insurance fraud cases in California.”
“Bathum and Wallace’s alleged conspiracy victimized hundreds of people addicted to drugs and alcohol by keeping them in a never-ending cycle of treatment, addiction, and fraud — all the while lining their pockets with millions of dollars from allegedly fraudulent insurance claims,” Jones said.
Bathum and Wallace allegedly stole patient identification information to obtain health insurance policies in their names without them knowing, according to a California Department of Insurance investigation. Bathum continued to bill insurance companies even after the patients completed their treatment.
About $44 million was paid out by five insurance companies, prosecutors said.
Through these alleged treatment marketing schemes, Bathum managed to earn a fortune. In 2015, the company earned nearly $30 million in annual revenue with a profit of 30 percent, Bathum told ABC for a “20/20” investigation last year. A 90-day stay at one of his residential treatment centers typically cost about $40,000.
“I’m not complaining” Bathum told ABC. At the time, he was living with his wife and four children in $3 million home in Santa Monica, Calif.
Bathum first surfaced in headlines in a lengthy December 2015 cover story in LA Weekly, amid investigations by major California insurance companies as well as the FBI, Los Angeles Police Department, Los Angeles County District Attorney and California Department of Health Care Services. The LA Weekly story described him as an “enigmatic, wild-haired” mogul who built the prosperous Community Recovery Los Angeles chain in only three years. Though he stepped down as CEO earlier in 2015, he remained “firmly in charge,” according to LA Weekly.
Bathum, LA Weekly reported, previously ran a pool cleaning business, and is certified to practice hypnotherapy. In 2002, he pleaded guilty to four federal felony counts of mail and wire fraud for selling computers and exercise equipment on eBay that he never delivered. He was sentenced to six months of house arrest and ordered to pay $29,733.
Then, in spring 2016, lawsuits filed by former clients and employees accused Bathum of engaging in insurance fraud and sexually abusing his patients. Former employee Roseann Stahl claimed she was wrongfully fired after she discovered Bathum was taking drugs and having sex with clients, according to a lawsuit cited by Courthouse News Service.
Former clients Stephanie Nicole Johnston and Jennifer Irick also sued Bathum, saying he gave them drugs and preyed on them sexually by moving them into “isolated hotel rooms and remote locations, encouraging them to use drugs with him, and sexually molesting them when they were high and/or incapable of consent.” Johnston and Irick accused him of taking them to a hotel room in April 2014, where they “engaged in a drug-fueled threesome.”
Detectives with the Los Angeles County Sheriff’s Department’s began investigating him in May 2016 after receiving a sexual assault complaint. Lt. Todd Deeds told the Los Angeles Times that more than a dozen former patients had accused him of sexual assault between 2012 and 2016 at the treatment centers.
The next month, in June 2016, “20/20” aired its investigation into Bathum, focusing on accounts from three former patients suing him for fraud and sexual battery.
Amanda Jester was a 29-year-old alcoholic from Seattle when she was offered a free-ride scholarship to one of Bathum’s treatment centers, she told “20/20.” “It sounded like an answered prayer,” her mother said.
But her rehab experience took a disturbing turn when, she claimed, Bathum invited her into a makeshift sweat lodge for a “guided meditation session.”
“It’s very small, it’s tight, it’s pitch-black dark, you can’t see anything,” Jester said of the sauna-like lodge. Once inside, she said, he started rubbing her leg up and down and began molesting her.
“I felt stuck, I guess,” Jester told “20/20.” “I mean, he’s the owner.”
A few days later, she said, she was told to meet him in a hotel room in the area, where he demanded that she take off her clothes as he performed oral sex on her. He told her she was high on meth, she said.
Bathum told “20/20” her allegations were “completely untrue” and “bizarre.” He denied that he used meth, but said he has “experimented with every drug that’s out there. … I think it’s important to do that … a long time ago.”
“You gotta understand something,” Bathum told 20/20. “You’re in a world of accusation that’s amazingly complex that has people saying things, all kinds of crazy things that come out in a trauma-filled world. I can tell you there’s certainly easy ways to explain that.”
Correction: An earlier version of this story incorrectly described Roseann Stahl as a former employee and client of Community Recovery Los Angeles. She was only an employee, not a client.
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