Lindsay Lohan’s father has been arrested for alleged “patient brokering,” meaning he is accused of bringing addicts to drug treatment centers in Florida in exchange for illegal kickbacks, according to charging documents reviewed by NBC News.
Michael Lohan, 60, was booked Friday and is the latest in more than 100 people arrested as part of a Palm Beach County probe of the treatment industry led by State Attorney Dave Aronberg. He faces five counts of patient brokering and one count of attempted patient brokering, according to the documents.
The documents include references to checks worth over $25,000 paid to Lohan in the alleged scheme.
Said Aronberg, "Mr. Lohan was investigated by our Sober Homes Task Force and he’s being charged with receiving kickbacks for referring patients to drug treatment. Patient brokering corrupts our health care system because decisions are motivated by greed instead of a patient’s needs. This is our Task Force’s 117th arrest and will not be our last.”
Heidi Perlet, Lohan's attorney, did not immediately respond to a request for comment.
According to the charging documents, an investigator spoke to Lohan on April 8, 2021, when he denied being involved in patient brokering.
South Florida is sometimes known as the “recovery capital of the world.” Thousands of addicts arrive here each year from all over the U.S., hoping that at one of South Florida's many drug treatment centers, they'll find recovery. And some do.
But an investigation by NBC News in 2017 found that many of these vulnerable addicts had been treated more as profit centers than patients. Some treatment centers partner with "body brokers" and operators of so-called "sober homes" to find patients with good health insurance. Brokers and sober home owners offer those trying to get clean free rent and grocery store gift cards, cigarettes and manicures in exchange for going to a specific treatment center, which pays kickbacks for every client.
Once they've reeled patients in, these treatment centers bill their insurance tens of thousands of dollars for often questionable counseling, costly and potentially unnecessary drug screens, and exotic laboratory tests.
"This is an entire industry that's been corrupted by easy money," said Aronberg in 2017. "Unscrupulous actors have taken advantage of well-intended federal law, and a lack of any good law at the state level, to profit off people at the lowest stages of their lives."
That law is the Affordable Care Act, which along with the federal Mental Health Parity Act passed in 2008, was meant to ensure people suffering from addiction could get the care they needed. Together they required insurers to cover substance abuse treatment, barred companies from rejecting those with preexisting conditions, and allowed young people to stay on their parents' insurance until age 26. But this broader coverage met with little oversight.
Those looking to make cash found the country's opioid epidemic had provided them with a trove of desperate people, many young and hooked on pills or heroin, and access to a deep pool of insurance dollars. Everyone got in on the business. Substance abuse treatment in Palm Beach County used to consist largely of a scrappy network of treatment centers and sober homes that just scraped by. By 2017 it had become a $1 billion business, according to the Palm Beach Post's calculations.
"It's a total scam," said Aronberg in 2017. "Not only are taxpayers footing the bill, but people are dying unnecessarily because of this."
The scammers made it difficult for the ethical, and sorely needed, treatment centers and sober homes to survive, said John Lehman, the director of the Florida Association of Recovery Residences, an industry group that oversees sober homes.
"The broad brush of bad actions and illegal activity is painting across everybody," said Lehman. "So the good guys are having trouble keeping their beds full. And the bad guys are saying you want to shoot dope in the bathroom, go ahead."