By Pat Beall and Steve Plunkett
Jamie Daniels made it just 228 days in Palm Beach County’s fraud-ravaged addiction treatment system before overdosing in a local sober home seven years ago last month.
A college graduate and aspiring lawyer, Daniels landed in the heart of a $746 million scheme built on exploiting drug users and bilking insurance companies.
Coastal Delray Beach osteopath Michael Ligotti was a key player and profiteer who pocketed millions from it, prosecutors said. When he was sentenced to two decades behind bars in January, a Department of Justice press release heralded his arrest and conviction as the largest addiction fraud case ever brought by the DOJ.
Ligotti, though, was not locked up. Instead, he remained free as he worked with prosecutors on investigating and prosecuting other fraudsters. And his testimony that led to convictions in two key cases resulted in a federal judge chopping Ligotti’s sentence in half, to 10 years, with the possibility of getting out of prison in 8½ years.
“It is only right,” U.S. District Judge Rodolfo A. Ruiz II said of reducing the prison time on Dec. 8. “Even the 10-year sentence is a significant sentence in this space.”
Ruiz, Department of Justice lawyer Jim Hayes and defense attorney Jose Quinon agreed that Ligotti is a changed man since January.
“In retrospect I’m appalled at how I behaved. I put money before patients,” Ligotti told the judge.
Jamie’s mother, Lisa Daniels-Goldman, attended the hearing in the Wilkie D. Ferguson Jr. federal courthouse in Miami via Zoom and pleaded with Ruiz “to please not make Jamie a victim again.”
Debbie Howland, whose daughter Ava died in a West Palm Beach sober home in 2018, also spoke via Zoom.
“I got a life sentence of pain, grief and endless tears,” she said.
Millions of dollars in tests
It would be hard to overstate the scope and toll of the addiction treatment fraud sweeping through Palm Beach County by 2013.
The county was an international for-profit treatment destination. Posters plugging addiction help in Palm Beach County greeted arriving passengers at Orlando International Airport. High-wealth drug users could access concierge care in beachfront homes with gourmet meals.
Estimates pegged the industry at $1 billion, making it one of Palm Beach County’s largest industries.
And it was rife with abuse.
A urine test that will detect drugs is cheap. It can be bought for as little as $25 at local drugstores.
By contrast, a single, sophisticated “confirmatory” urine test could reap thousands of dollars from a patient’s insurance company.
People in sober homes and treatment centers were needlessly tested multiple times a week, generating staggering insurance payouts. In one case reported by The Palm Beach
Post in 2015, nine months of urine testing totaled $304,318. In another instance, the parents of a young woman who overdosed in a sober home after four weeks received urine test bills topping $30,000.
But insurance paid only if a doctor would green-light the expensive test as medically necessary.
As medical director for dozens of facilities, Ligotti obliged, said prosecutors. In addition to ordering millions of dollars in needless tests, they said he prescribed addictive drugs to patients from his Whole Health clinic in Delray Beach. That included benzodiazepines, drugs lethally mixed with opioids by people who are addicted.
The scheme reached into the pocketbooks of employees at Amtrak, Bank of America and the state of New Jersey who sought treatment and found fraud, an attorney for Aetna Insurance testified at Ligotti’s sentencing hearing. Aetna and organizations using Aetna paid $24 million to providers in the scheme, he said, but worse was the continuing fallout once it was exposed: It created distrust of addiction treatment by people who might need it the most.
Even after a federal subpoena issued in 2016 put Ligotti on notice that he was under investigation, he continued ordering tests, an FBI agent testified.
He was indicted in 2020 on 12 counts of health care fraud and money laundering, and one count of conspiracy to commit health care and wire fraud.
He pleaded guilty to the conspiracy count in 2022. Other charges were dropped.
Fallout beyond fraud
Like many other physicians arrested in local treatment fraud crackdowns, Ligotti was never charged with the overdose or death of a person seeking help for addiction.
But the fallout from urine testing schemes extended far beyond financial fraud.
That’s because unscrupulous local sober home owners and addiction treatment operators didn’t need people seeking treatment to stay drug-free.
They needed people with a drug use diagnosis, insurance and a supply of urine, not a commitment to sobriety. As a result, some sober homes advertised as safe and drug-free turned a blind eye to drug use. People hoping for help wound up overdosing.
Jamie Daniels was among them.
Jamie Daniels with his mother, Lisa Daniels-Goldman. Daniels-Goldman and Jamie’s father, Ken, created the Jamie Daniels Foundation to help young adults struggling with substance abuse. Jamie, 23, died in a Boynton Beach sober home. Photo provided by Jamie Daniels Foundation
The Michigan State University graduate clerked at a law firm and was studying for his law school entrance exam.
But he had struggled to stay sober since at least college, where his family believed he had easy access to opioids.
In July 2016, Jamie, 23, did what thousands of others had done and flew to Palm Beach County for treatment.
On Dec. 7, he overdosed here.
Then came a wave of insurance bill records totaling tens of thousands of dollars for urine screens and blood tests, including those ordered by Ligotti for Jamie when he was in Michigan, not Florida.
“It’s one thing to have an addiction and not being able to overcome it because the addiction overtakes you,” Jamie’s father, longtime Detroit Red Wings play-by-play broadcaster Ken Daniels, told ESPN. “But then when bad people get involved and they contribute to it, it makes you sick.”
ESPN produced a documentary on the testing fraud and Jamie’s death. When the production crew showed up at Ligotti’s Delray office, he denied ordering the tests. His identity had been stolen, he told reporters: “I’m the victim.”
Evidence in other cases
It’s not clear how many other schemes Ligotti has helped prosecutors identify and take to trial. However, records show he offered evidence in one Central Florida case involving rural hospitals and high-priced bogus drug testing that led to multiple convictions. And the judge in that case found that Ligotti had information on people not yet arrested in “a large number of healthcare facilities across the country.”
“I want them all to have to pay a price for what they did,” explained Daniels-Goldman of her reluctant acceptance of Ligotti’s freedom while he helped put two others behind bars.
But other aspects rankled Daniels-Goldman and others. It was late May before Ligotti finally surrendered his license to practice medicine and another three months before the state’s Board of Osteopathic Medicine formally accepted the relinquishment. In June, his expected prison entry date was pushed back to December in part because he was providing testimony in the Central Florida case. In July, he received court permission to take his family to an upscale resort hotel at Universal Studios.
Ligotti surrendered to the U.S. Marshals Service on Dec. 1. Defense attorney Quinon asked Judge Ruiz to recommend that Ligotti be sent to a prison close to home and not to the Atlanta Penitentiary.
“He’s done everything [that prosecutors asked] and he’s done it from the heart,” Quinon said.
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