Former Substance Abuse Recovery Center Director Sentenced to Prison After U.S. Department of Labor Finds Healthcare Fraud Scheme

MIAMI, FL – After an investigation by the U.S. Department of Labor's Employee Benefits Security Administration (EBSA), the U.S. District Court for the Southern District of Florida has sentenced Tina Marie Barbuto – a former licensed mental health counselor in Margate, Florida – to serve 36 months in prison followed by 36 months of supervised release. Additionally, Barbuto will pay $3,132,806 in restitution and a $100 special assessment for her role in a conspiracy to commit healthcare fraud.

EBSA investigators found that from December 2015 to December 2016, Barbuto – former clinical director at Reflections Treatment Center in Margate, Florida – and co-conspirators created and signed documents to conceal the fact that Kenneth Chatman owned and retained a managerial interest in Reflections and another recovery center – Journey to Recovery in Lake Worth, Florida. Due to a prior felony conviction, Chatman was unable to obtain the license to operate the centers. To obtain licenses, Barbuto prepared licensing documents, which co-conspirator Laura Chatman signed and submitted to the Florida Department of Children and Families to create the appearance that she, not her husband Kenneth Chatman, was the owner and operator of both treatment facilities.

Investigators also determined that, while working at Reflections Treatment Center, Barbuto and co-conspirators called for confirmatory testing to be performed and substance abuse treatment to be billed to patients, even though the patients had already been discharged or left the treatment centers and were no longer receiving treatments or submitting bodily fluid samples for testing.

The investigation also found:

• Chatman and Barbuto fired a medical director who refused to prescribe medically unnecessary lab testing that would produce kickbacks to Chatman. After the clinic hired a new medical director, Barbuto and co-conspirators provided after-the-fact statements to clinical laboratories stating bodily fluid testing had been properly prescribed at the time that it was performed by Smart Lab LLC – a confirmatory urinalysis testing facility in Palm Beach Gardens, Florida. Smart Lab, in turn, billed the patients' insurance plans;
• Between July and September 2016, Barbuto used the new medical director's signature to write seven prescriptions for a Schedule III controlled substance containing the diagnosis of pain management in lieu of opioid addiction treatment;
• Barbuto, Chatman, and other co-conspirators also withheld necessary prescription drugs from current and former patients of their recovery centers, causing the patients to suffer physical and mental effects of withdrawal; and
• Barbuto and co-conspirators - upon learning of the federal investigation of the two centers -removed and transported patient records and belongings, including confidential substance abuse treatment information and patient identification information, to a storage facility that Barbuto rented in hope of hiding them from law enforcement.

"The resolution of this case sends a strong message to those who commit or are considering committing fraudulent acts that these actions will not be tolerated," said Employee Benefits Security Administration Regional Director Isabel Colon, in Atlanta. "The U.S. Department of Labor remains committed to ensuring that health benefits are not abused, and anyone found guilty of committing fraud is held accountable."

EBSA, the FBI, the IRS, the Amtrak Office of the Inspector General, the Office of Personnel Management-Office of the Inspector General, the Florida Department of Insurance Fraud, the Palm Beach Sheriff's Department, and other local police departments combined efforts in the investigation. The U.S. Attorney's Office in the Southern District of Florida prosecuted the case.

Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.