Search warrants were executed Friday by the Gwinnett County district attorney's office investigating suspected insurance fraud by a Norcross drug rehabilitation clinic that recently had its license revoked by the state.
As first reported by the Atlanta Journal-Constitution, Channel 2 Action News and WSB Radio, Narconon of Georgia allegedly billed a patient's insurer $166,275 for doctor visits that never occurred and treatment that was never provided.
Acting on that information, state Insurance Commissioner Ralph Hudgens launched his own probe, teaming up with Gwinnett District Attorney Danny Porter to obtain the warrants.
"We are actively and vigorously pursing an investigation," Porter said.
The Church of Scientology-affiliated clinic has denied any wrongdoing, saying it follows standard billing procedures for rehabilitation facilities.
Investigators say they were surprised by the volumes of potential evidence retrieved from Narconon, which was stripped of its license in December following a decade's worth of complaints that it was illegally operating a residential facility. Narconon is appealing the state Department of Community Health's ruling
"We have a lot of information we're seizing at this point" - so much, in fact, that a U-Haul was brought in to accommodate all the laptops, hard drives, billing records and other paperwork secured from Narconon's offices off Peachtree Parkway, said Sherry Mowell, director of fraud investigation for the insurance commissioner. The seizure lasted most of the day.
Acting clinic director Jeannie Trahant declined comment. Steve Sadow, attorney for Narconon of Georgia's former executive director Mary Rieser - who was in charge when the alleged fraud occurred - said he would withhold comment until after he reviewed the warrants.
Questions about the clinic's billing practices were first raised in a complaint from the mother of a former patient who said she discovered unauthorized claims to her insurer, United Health Care, for partial hospitalization and "intensive outpatient services" rendered to her 19-year-old daughter.
After being told her insurance wouldn't cover her daughter's treatment, Mary Morton, of Rome, paid Narconon of Georgia $15,000 – in advance and for the total cost of treatment, according to her contract - along with another $1,600 per month for housing.
A few months later Morton was informed by Rieser that United Health Care had yet to reimburse Narconon.
"And I asked her, ‘If they reimbursed at all they would reimburse us, because we paid in full,'" Morton told the AJC. "And she said she wasn't aware of what our contract was."
Morton subsequently discovered UHC had been billed an average of $4,800 a week for doctor visits she said never took place. The billing continued even after her daughter left the program in October 2012, according to documents Morton provided to the AJC.
Lisa Robbins at the Robbins Health Care Alliance in Stone Mountain and Casey Locarnini at Dunwoody Urgent Care Clinic - the doctors Narconon claims treated Morton's daughter - are cooperating with investigators, Hudgens said.
"From our indications, [the doctors] have not performed the services that were described in the medical billing," he said. "We have credible information that insurance fraud is taking place at Narconon."
Still, insurance fraud - which carries a sentence of up to 10 years in prison - is difficult to prove, according to Porter, as charges can only be brought against individuals, not organizations.
The investigation is expected to take several months, said Mowell, the insurance commissioner's chief fraud inspector.
Narconon of Georgia recently settled a wrongful death suit brought by the family of Patrick Desmond, who died four years ago of a lethal combination of alcohol and opiates while a patient at the Norcross facility.
"On behalf of the numerous clients I represent who have been defrauded by Narconon's bogus drug rehab scam I would like to applaud the Georgia criminal authorities for the actions they took today," said attorney Jeff Harris, who represents the Desmonds and Mary Morton. "I sincerely hope that this spells the end of this dangerous and deceptive operation."