West Palm Sober Homeowner Tricked Me Into $31 Million Insurance Fraud

FORT LAUDERDALE — Dr. Mark Agresti easily admitted Wednesday that he was the unwitting mastermind of 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 to be tested frequently for a wide range of drugs.

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

“It was a high-risk population,” Agresti said of the young people who lived in the rundown Georgia Avenue condominium complex in West Palm Beach while battling addiction.

“If you don’t test frequently, do you know what that means for those tested? Use.”

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Later, when he found out his medical license had been used by sober homeowner Kenneth Bailynson to get rich, he said he was stunned.

” It’s incredible. It’s shocking. It takes my breath away,” said Agresti, 59, who was medical director at the sober house. “It’s extremely upsetting that I’m a part of it.”

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

The 49-year-old former CPA – who testified two weeks ago that Agresti knew urine tests were liquid gold and purposely ordered around 30,000 – is a con man and a liar, says doctor.

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

The Bailynson he met in 2011, when he agreed to be medical director of Good Decisions, had nothing to do with the arrogant man who bragged to jurors about how much money he had earned gambling and didn’t apologize 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 who was Superman’s nemesis.

The man, who came into his office to pitch his idea for a low-key home, was quite different, Agresti said.

“He came across as very charming,” said Agresti, who also served as medical director for half a dozen other sober houses and director of psychiatry at the former Columbia Hospital in West Palm Beach. “He was very smart.”

Bailynson, who pleaded guilty to conspiracy to commit 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.

Medical testing crucial to sober homeowners’ regime, prosecutors say

The program could only work if Agresti ordered the tests and assured insurance companies that they were medically necessary.

Assistant US Attorney James Hayes pointed out that other prosecution witnesses also questioned Agresti’s tactics.

Dr. Margaret Jarvis, a Pennsylvania psychiatrist who reviewed Good Decisions patient records, said last week that Agresti should have reviewed lab test results before ordering more, Hayes said.

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

Those who did were told they should leave the sober house 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, which was a fraction of the cost, could immediately detect if a patient had taken medication so they could get help right away.

In this undated image from the video, Ken Bailynson, right foreground, stands in the parking lot of Green Terrace Condominiums.  (Photo provided)

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 tests Agresti commissioned. and who tested each urine sample for up to 80 different drugs.

Agresti said he was not paid based on the number of tests he ordered. Bailynson, who also opened a lab to boost his profits, admitted to earning between $13 million and $15 million from the scheme.

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

He denied Bailynson’s claims that he was often paid $9,000 in cash in the months leading up to the FBI’s sober house raid in September 2014.

Doctor says he didn’t know how to use computerized patient record system

Even though the results were delayed, the tests had a strong deterrent effect, Agresti said. People struggling with addiction were much less likely to relapse if they knew they were going to get tested regularly.

South Florida and the country were in the midst of an opioid pandemic, he said. As a psychiatrist specializing in the treatment of drug addicts, he said he had seen far too many people die. Frequent testing was a way to break the cycle of treatment, relapses and overdose deaths, he said.

“That’s what kept this community safe and that’s what was important – to prevent every member of this community from overdosing and dying,” he explained why he embraced frequent testing. .

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To boost profits, Bailynson said residents were being tested every other day. But, Agresti said, that was not his intention.

He said he had adopted a “declining protocol”. During the first four months, people had to be tested three times a week. For the next four months, they were to be tested twice a week, and for the final four months, a test would be administered weekly.

When Hayes pointed to patient records that showed people who had been at the facility for months were being tested at least three times a week, Agresti said he did not allow them.

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

All lab tests allowed in the system had to be done by someone else, he said.

“I didn’t put orders into the (electronic) system,” he said. “It just wasn’t me. It was a manufactured order. … I didn’t know how to use the (electronic) system.

Prosecutors target doctors’ claims of innocence and ignorance

Hayes attempted to debunk Agresti’s claims of innocence and ignorance by pointing out that he originally told an FBI agent that he never ordered the more expensive tests. Agresti said the FBI report was wrong.

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. At that time, he had records that showed more than $89 million in claims had been filed for tests commissioned by Agresti. His denial contradicts the records, he said.

Ultimately, $105.5 million in claims were filed. Of this amount, $31.3 million was paid by insurers.

Looking back, Agresti said he made a terrible mistake trusting Bailynson. He said he envisions creating a community of state-of-the-art sober homes where people struggling with addiction will recover.

“He turned everything that was a good thing into a criminal enterprise,” Agresti said. “The biggest regret of my life was not resigning earlier. I was in over my head.

Oral arguments are scheduled for Thursday morning. Then the jury will begin to decide the fate of Agresti.

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