Thank you for supporting our journalism. This article is available exclusively for our subscribers, who help fund our work at the Sun Sentinel.
Prosecutors say it is one of the most significant cases from a mission to target fraud among the region’s drug-addiction recovery businesses, a yearslong crackdown aimed at reducing overdose deaths.
They’ve made 120 arrests so far in Palm Beach County, focusing on a crime called patient-brokering. Opioid fatalities dropped before surging again during the coronavirus pandemic, state data show.
Now for only the second time since this crusade began in 2016, a case is going to trial when jury selection begins Monday. More than 80 convictions have resulted so far from plea deals.
James Kigar, who co-owned a substance abuse treatment center in Boynton Beach, is fighting 119 felony charges, each count punishable by up to five years in state prison. The 60-year-old Boca Raton man denies the allegations that he “bought patients by paying kickbacks to sober homes.”
“Kigar was only interested in the well-being of the patients,” said defense attorney David Frankel of Hollywood, adding there is insufficient proof of illegal activity by his client.
The State Attorney’s Office says Kigar’s Whole Life Recovery operation carried out a scheme to profit from addicts rather than actually helping them avoid relapses.
Florida’s patient-brokering law makes it a crime for anyone to offer or pay any commission, kickback or bribe to promote the referral of patients to or from a health care provider.
Prosecutors say Kigar’s “business model” involved paying up to $500 each time a sober home sent a recovering addict to Whole Life — this was the only way the center got patients. Sober homes also are known as halfway houses.
Kigar and his associates more than made up for those payments by billing each person’s health insurance company for various services, while also striking deals with urine-testing facilities, according to prosecutors.
With his arrest in October 2016, Kigar became one of the first people ensnared by the State Attorney’s Sober Homes Task Force. It’s a unique group of law enforcement agencies, legitimate drug treatment providers, prosecutors, and city and state agency representatives.
“The defendant and his partners knew just how lucrative addiction treatment and urine testing could be, so they paid top dollar to sober homes to refer patients, and then they negotiated with different labs for the best kickbacks,” wrote Justin Chapman, a state assistant attorney general leading the Kigar prosecution.
The prosecution contends that Kigar — disregarding warnings from a lawyer and even the State Attorney’s Office — tried to conceal what he knew all along was a corrupt scheme. Chapman says Kigar disguised the referral checks as payments for “case management” services, while the money from labs was called “investment dividends.”
“Clearly the best interests of the patients were never their concern,” Chapman argued in a court pleading.
One patient described for investigators how she wound up at Whole Life: One day three men stood in the living room of her sober home and negotiated the price they could get for sending her to a treatment center.
“The men essentially bid on her, like ranchers at a cattle auction,” Chapman said. “And this was how so many vulnerable young adults from around the country were bought and sold over and over again here in Palm Beach County.”
Prosecutors say Christopher Hutson, one of Kigar’s five co-defendants, was even caught on undercover police video negotiating patient referral kickbacks with a sober home owner.
Today, Hutson, 41, is a fugitive from justice. The former “operations consultant” for Whole Life pleaded guilty in 2019 to six counts of patient brokering, in exchange for a five-year prison term. He admitted to making the payments for the referral business.
Hutson — a previously convicted felon for his role in an opioid “pill mill” operation — had a deal to cut his sentence down to 18 months if he turned himself in to authorities on Jan. 2, 2020. He had been given time to get his personal and family affairs in order, but he never surrendered.
Defense lawyer Frankel, with co-counsel Michael Dutko of Fort Lauderdale, says Kigar will testify in his own defense.
Now a yoga studio owner and instructor, Kigar will explain that the center performed real clinical services including monitoring of patients and rehabilitation.
Frankel said the jurors will have to decide what they believe was the reason for the payments to the sober homes. In a July 12 motion, he wrote, “The ultimate issue of guilt or innocence rests on the purpose for which Mr. Kigar signed checks for payments.”
Kigar’s counsel earlier had been seeking to rely on a particular defense — that Kigar set up the payments on the advice of a lawyer — but a state appeals court ruled that is not allowed with patient-brokering charges.
Ron Herman, a West Palm Beach criminal defense lawyer who isn’t connected to the Kigar case, said the trial is the biggest test to date of all the task force cases. Herman has represented sober-home owners facing these charges.
He says the jury will have to decide: “Was this all about making money or was it a legitimate business to help patients? Did this rise to a criminal action?”
The only person to try their luck with a jury so far was Nicholas Cirio, 42. In 2019, he was found guilty on 10 counts of making illegal referral payments to lure sober-home residents to two treatment centers.
Cirio appealed partly on the grounds that prosecutor Chapman unfairly inflamed the jury by declaring Cirio “bought human beings to fill his treatment center.” But the conviction and punishment of three years in prison was upheld, and Cirio completed his time July 20, records show.
Breaking News Alerts Newsletter
As it happens
Get updates on the coronavirus pandemic and other news as it happens with our free breaking news email alerts.
Prosecutors declined to comment on their plans for the Kigar trial.
On March 31, Kigar pleaded guilty to two separate felony charges from 2019 in a separate patient-brokering case; he was sentenced to three years of probation. Prosecutors said Kigar and his partners received a $5,400 kickback from a drug-testing laboratory.
Circuit Judge Kirk Volker agreed the convictions will not appear on Kigar’s record. While on probation, Kigar is restricted from working in “health care, substance abuse treatment, clinical lab testing, and/or recovery housing.”
State Attorney Dave Aronberg says there is no slowing down after five years of work to remove greedy operators from the drug-recovery industry.
“Our Sober Homes Task Force will continue to investigate, arrest and prosecute those … who exploit people in drug recovery and put profit over patient care,” he said recently.