‘Especially disgusting’: Former workers, patients, level accusations at California addiction treatment empire

Second in a series. See Part 1, Addicts came to Southern California from afar to get sober but wound up dead

The video captures her bare feet scurrying toward a commotion by the door. “What are y’all doing?” she asks.

Two men wrangle tools. “Changing the locks,” a muffled voice says.

Christine Hand, the erstwhile house manager of this sober living home in Los Angeles, knew she’d incur the wrath of her employer. She and her boyfriend had complained, in writing, about all manner of alleged transgressions in Nathan Young’s addiction treatment empire, from insurance fraud to prescribing unneeded medications to instant evictions and “forced homelessness,” they said in missives that landed at police stations and in government email boxes from Los Angeles to Sacramento, signed by both Hand and Anthony Morrison.

Was it just last year that Hand and Morrison were in Oklahoma, struggling with their demons? The clouds promised to clear when friends recommended almost-free addiction treatment in sunny Southern California, through companies associated with Young. They had a strong desire to turn the page. They signed on and took a marathon van ride west in April 2023.

And they were happy at first. They worked with good therapists and case managers. They got sober. They took jobs working for the company treating them. Hand managed one of the many sober living homes in Young’s network, while Morrison did maintenance at its many Southern California properties. There were dozens of state-licensed treatment centers and scores of sober homes operating under the names 9 Silver and 55 Silver.

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But as time went on, things just didn’t seem right. Sober homes where people were allowed to smoke weed and get high. Therapy sessions — a billing backbone of California’s social model addiction treatment system — held via Zoom with scores of patients, rather than in person with an intimate group. Some workers paid low wages while others were paid well.

There were insurance oddities. Overdoses. Deaths. Their self-confidence grew in lock-step with their commitment to sobriety — and so did their determination to do something.

“My reason for this complaint is to hopefully bring to the state’s attention the egregious and appalling misuse of situational influence over a very vulnerable and desperate group of drug and alcohol addicted citizens,” Hand’s boyfriend, Morrison, wrote in a labor complaint filed in March. “(T)hey have taken advantage of us almost like smugglers making people work off their debt.”

Was anyone listening? On this particular day in June, it sure didn’t seem like it. Hand was told to leave, but she wasn’t going quietly. She had brushed up on the legalities of evictions in Los Angeles. Renters couldn’t be tossed out on a dime without due process, especially as recovering substance users, a protected class under American disability law.

“You know this is completely illegal, right?” she asks the man at the door in the video.

“Just doing my job,” the voice responds.

Hand’s resolve to stay in that house was steely, but deep down, panic rose. So far from home. So little money. Where could they possibly go?

“They keep us dependent with the fear of homelessness as the main tool on the tool belt,” her boyfriend Morrison wrote in his labor complaint. “They become wealthy beyond fathom to me and I can barely afford new shoes. … I fear that the bottomless pockets of those at the top of this corrupt pyramid are able to pay their way out of consequences.”

The money can be substantial. Over the summer, a 17-day stay for a different patient at one of Young’s then-state-licensed detoxes, Rodeo Recovery in Beverly Hills, resulted in a $110,500 bill to Blue Cross and Blue Shield of Oklahoma. The insurer paid just a fraction of that, potentially leaving the patient on the hook for the rest, according to billing statements reviewed by the Southern California News Group.

A spokesman for Young and his companies told SCNG that the businesses are dedicated to helping people recover from addiction, especially those on the lower rungs of the economic ladder. It has not taken steps to collect uncovered charges from them. Managers chalked up complaints to disgruntled ex-employees who didn’t perform up to expectations and have axes to grind. In response to wrongful termination and whistleblower lawsuits, attorneys for the company denied any wrongdoing.

‘This isn’t right’

Hand and Morrison are hardly alone in their criticism of Young’s operations, however. SCNG spoke with dozens of former patients and employees, and reviewed thousands of pages of court and regulatory documents, that echo their complaints.

While some patients were grateful for the professionals who helped them turn the corner toward sobriety, many also felt taken advantage while at their most vulnerable.

“They use your sobriety against you,” wrote a former client who is not being named because she fears retribution. “They fly people here from Oklahoma and other states and treat them however they want because they know these people are fragile and have no money. … They kick people to the street as soon as they can no longer get money from their insurance, and if they feel threatened by anyone trying to leave they go ahead and kick you to the street before you can tell other clients there is another, better way, and programs out there that will actually help you and care about you. …

“They are bullies and put so many people in danger,” she wrote. “They expect you to be grateful for what they do give you.”

Patient/clients said they were recruited from distant states like Oklahoma, North Dakota, North Carolina and Alabama by marketers and acquaintances touting years of nearly free addiction treatment, as well as jobs and housing in sunny Southern California. Transportation would be paid for. Treatment would be covered by health insurance. If they didn’t have insurance, or the right kind, they’d be signed up for it, sometimes with false information, they said.

Of particular interest was “Oklahoma Native Gold,” several said. Gabriel and Shawnta Hardy already had insurance in North Carolina but were signed up for Blue Cross and Blue Shield of Oklahoma, they said. Shawnta was identified as Native American in the paperwork, when in fact she is not, the couple said. (Native Americans from federally recognized tribes can get coverage for little or no cost to them.)

Michael Smith and Zachary McKee came from Alabama in January for treatment, and it didn’t take long for things to go awry. They were given Suboxone, a medication that blasts opioids from nerve receptors and sends people into instant, painful withdrawal, without a prescription, winding up in the hospital, Smith said.

Smith was given a job helping people get health insurance policies, and some were brought to California even before insurance kicked in, she said. They were turned away to unfamiliar streets and told to return once it took effect, she said.

“It just wasn’t adding up. After I finally had a sober mind, I realized this isn’t right.”

Clients from other states were also urged to sign up for food stamps and cash assistance through California welfare programs, shifting some costs directly to taxpayers, they said.

The company spokesman said clients are simply informed about the resources available here. It’s against company policy to sign clients up for health insurance, workers are regularly reminded that doing so is grounds for dismissal and it has contracted with a compliance agency, he said.

Medication is not dispersed without a prescription and clients aren’t supposed to share, but sometimes do, he said. Marijuana is allowed in sober homes, as it’s legal and helps people resist dangerous drugs, and employing clients in treatment helps build confidence and move forward in sobriety, he said.

‘Especially disgusting’

Many of the patients’ allegations were echoed by professionals who worked for the companies.

Young and co. hired “runners” — both current and former clients — to recruit other addicts with private insurance via text message and social media, said a lawsuit Christian Magliozzi filed against Young and related companies in February. These runners asked if users wanted to get “paid” to go to rehab and were promised money, Xanax, marijuana and other drugs, it said. After providing insurance information and being signed up for therapy, they went into sober living or other housing and were offered marijuana as soon as they arrived, along with a promise of cash payments and jobs, the suit said.

Magliozzi had conquered his own addiction and became a certified alcohol and drug counselor to help others do the same, the suit said. He was hired by Helping Hands Rehab Clinic, a Young-related business, in April 2022, and was soon told that “the facility was currently under investigation for an especially disgusting activity, namely patient/body brokering,” the suit said.

That’s the illegal and unethical practice of paying for patients in order to bill their health insurers. It could be a revolving door: Many addicts would leave, “and then Mr. Young would recycle them back into the facilities as if they were a completely new patient and re-bill the facilities,” the suit said.

A turning point came in June 2022, when therapy sessions went online via Zoom. Magliozzi was told to mark everyone as present, even if they logged off mid-session or never showed up, the suit said. It was “expected and routine” to over-report attendance: “(T)he pattern and practice of fabricating attendance was, at least in part, to permit fraudulent billings to client/patient health insurers,” the suit said. As long as people had good insurance, “these addicts were given drugs, money, jobs, housing, and other services in exchange for being a patient at the facilities.”

Magliozzi wasn’t an employee for long. He filed complaints with state regulators, and was terminated two days later, the suit said.

In court documents, lawyers for Young “deny, generally and specifically, each and every allegation and each purported cause of action contained in the complaint.”

‘Lie’

Deborah McCulley-Buckley’s experience was similar.

She took a job as an associate marriage and family therapist in April 2022. She soon found herself a nervous wreck, according to the lawsuit she filed this August.

The rules of her license forbade her from seeing clients outside of California, but she was told she must anyway, it said. Therapists were overloaded. They couldn’t request a change if a client became abusive. She worried that the company was violating patient confidentiality, the suit said.

When, in October 2022, a senior director of clinical operations “instructed the employees in a meeting that they had to commit fraud: to lie and say their clients’ addictive substance cravings were higher than they were or existent when they were not for insurance billing purposes and to add other additional information in notes for billing even if it was not true,” she objected, the suit said.

The company’s “unethical practices” created stress and anxiety, and shortly after she went on medical leave, she was fired in January 2023, the suit said.

Another worker, Marisa Elizarrarz, was named “Best Employee” one day — and fired less than two weeks later, according to a lawsuit filed in September.

She started as a behavioral health technician in July 2023, one of only two workers who weren’t also clients/patients, the suit said. The majority were in the detox program or had completed it, and were from Oklahoma, not California. They earned considerably less than she did — some 40% less, according to the suit — and many didn’t know the company had other ways of recouping costs.

“Ms. Elizarraraz knew of at least one client who was told by 55 Silver that she could pay just $5 in rent to live on the premises, but 55 Silver did not tell the client that it would bill certain services to the client’s insurance carrier,” the suit said. “This client later discovered that she owed approximately $10,000 to her insurance carrier due to the fraudulent activity in which 55 Silver had participated.”

She saw other things that disturbed her, the suit said.

Detox — the most expensive level of addiction treatment — is where withdrawal happens. Heart attacks, organ failure and seizures are potentially lethal side effects, and that’s why the state requires face-to-face physical checks on detox patients at least every 30 minutes during the first days after admission.

When Elizarraraz found a worker asleep during his shift in September 2023, she snapped a photo and sent it to a manager, the suit said. A high-risk patient was in the facility, and “55 Silver did not have the necessary 24-hour staffing it needed,” the suit said.

Two days later, she got a suspension letter. The day after that, she was terminated.

In answers to the Elizarraraz lawsuit and others, the company denied any wrongdoing.

‘Broken’

Other former workers have sued for wrongful termination, wage abuse, discrimination and harassment. Dozens of wage complaints have been filed against Young’s 9 Silver and 55 Silver companies with California labor authorities — which Morrison learned after he filed one, too.

When he came from Oklahoma with Hand for treatment and got a job as a maintenance worker last year, he felt grateful. He didn’t mind that he’d have a week tryout with no pay. If things worked out, he’d get $250 a week, he was told.

“The reason I was given was because I had only been sober for one month,” Morrison wrote in his complaint. “I was told that they want to make sure we don’t relapse.”

RELATED: Addicts came to Southern California from afar to get sober but wound up dead

It seemed reasonable. He got the job, and got sober, and got the $250 a week. But it was essentially full-time work at well below minimum wage, which would have grossed nearly $700 a week. When Morrison finally asked why he made so much less, he was told it was because he was getting room and board through the treatment program, he said.

That didn’t seem right.

“We are all part of an Intensive Outpatient Program and it is covered or paid for by our insurance and all residents of the sober living houses are required to pay $5 per month for rent, but we are required to also actively participate in the program as a condition of rent,” he wrote in the labor complaint. “I do not believe that a person’s rate of pay should be effected by their place of residence. Not when that person’s insurance policy and active participation in their program covers all living expenses.”

Unbeknownst to many patients, however, is that health insurance is not supposed to be billed for sober home living expenses.

There was more that seemed odd. Morrison learned that a woman was doing the same job as him, but with a company car and several times the pay. He confronted Young about the discrepancy, according to the complaint, and Young told his underlings to make sure that everyone was paid minimum wage.