‘Especially disgusting’: Former workers, patients, level accusations at 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.

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.”

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.

Morrison did get a raise, but it was still shy of minimum wage, he said. He told his employer he’d be contacting the state labor department. Days later, on March 4, he was fired, the complaint said.

“In my opinion now … it purely feels like they are only taking advantage of drug addicts and people who come out here to get help and change their direction in life,” he wrote in his complaint. “Because we are obviously broken and unsure of ourselves and easily manipulated by those that, in a sense, control our fate in regards to our living situation and our success in our recovery.

“This employer has led me and many like me along similar to a donkey and a carrot on a string, with nothing more than crumbs for pay. Almost manipulating the whole situation so that we cannot make enough money to move on to a more independent stage of our lives. Instead they keep us barely surviving, having to rely on them while they charge our insurance companies hundreds of thousands of dollars.”

A spokesman for the company said that Morrison worked for a contractor — who shares an address with Young’s licensed treatment businesses — and there was a dispute over how much Morrison was actually working. He greatly overestimated his hours, the spokesman said.

Terminated, discharged

Morrison’s girlfriend Hand also had a $250-a-week job, heavy with responsibility.

Hand was a house manager, a sort of mother hen charged with safeguarding and distributing medications for her fellow residents, making sure they attended therapy sessions and doctor appointments, administering drug tests, searching for contraband. She was still on the job as the men at the door were changing the lock that day in June. Several others were waiting outside in case things went awry.

“At this point it was obvious that I have been terminated and discharged, but given no reason why,” she said in contemporaneous, detailed notes reviewed by SCNG. “As that news sets in, so does panic mode. Being fired for trying to stand up and help others is frustrating enough, but the fact that they would discharge (me) from the program, denying me access to my, at that point, much-needed therapist, my sober living community, my church and my home… is devastating. Then expect me to leave with no plan as to where to live, giving the streets as the only option ….”

Eventually, Hand was told that she was being terminated for violating patient privacy in her complaints to government agencies, she said. Hand countered that any information she collected from fellow clients was with their express permission. But it wasn’t up for discussion. A new house manager was on the way to replace her.

On June 22, she, Morrison and other house residents packed their things into a U-Haul and left. Hand and Morrison landed on their feet, found work in a program they feel is ethical and are looking for their own apartment. “I went from client to employee in less than a month of sobriety, and given the responsibility of a home and clients,” she wrote. “It turns out that I am very good at my job.”

‘Saved my life’

On a recent September morning, dozens of clients mingled outside between online therapy sessions at the Ricardo Street sober home properties in Los Angeles. The skunky scent of weed perfumed the air as they played cards on stoops, checked their phones and eyed a visiting reporter and photographer curiously.

Many were eager to sing the praises of the operation. Brody and Felisha, who asked that their last names not be published, came to California from Alabama’s “Meth Mountain” more than a year ago, and they couldn’t be happier.

“I love this program,” Felisha said. “If I would have went to one of your basic programs at home, I would have been basically locked up. It’s like jail. They’re not going to let you do your thing, do sober your way.”

For some, doing sober their way includes getting high. Brody and Felisha don’t smoke weed, they said, but a lot of clients do. It helps them feel calmer and steer clear of the dangerous stuff.

Clients getting jobs with the company that treats them isn’t a program weakness — it’s a strength, many said. They get skills and earn a paycheck. “Nothing’s holding me back but myself,” Brody said.

And several felt the pay was fine, even if low. “They provide us with a place to live and with food,” Felisha said. “We get paid a fair amount for what we’re doing here.”

Zoom therapy sessions were actually better than face-to-face meetings, several people said, because the distance helps them feel less vulnerable and anxious.

As for overdoses at facilities — addiction is an extremely difficult condition to manage, they said. Sober home residents can be searched, but they’re not in a prison. They’re free to come and go. They’re not patted down every time they walk in the door. Sometimes they make dangerous choices. But thousands have passed through the network’s many doors, and the vast majority do well, they said.

Kody Jones is one of them. He came from Oklahoma in 2022 as a client, became a house manager after 90 days, and was overseeing more than a dozen properties housing some 500 people in September.

“Ninety-eight to 99 percent of people who have something bad to say about this place didn’t do what they were supposed to do or didn’t want to accept the consequences, didn’t surrender to a higher power, got mad and wanted to talk bad,” he said. “And 75% of those who talk bad want to come back. I don’t understand why people hate on this place. I don’t get it. It saved my life.”

Jones has three kids – 19, 15 and 1. He had been in and out of jail but is now steady, sober and no longer a client. “The old me would have robbed the new me,” he joked. “Just being trusted is such a big thing for me. No one ever trusted me before.”

Nothing is perfect, but, “This place is evolving every day in a better direction,” he said. “Our philosophy is, ‘Here is your rope. Here are your tools. Here is how to make a safety net. Don’t make a noose.’”

Brody, from Alabama’s Meth Mountain, doesn’t intend to. He envisions a career in the addiction treatment industry, and a home here in Southern California.

“I would have wound up dead on the street,” he said. “I didn’t even have the will to live. I hoped my next shot would kill me. I feel like I actually have a chance now.”

Epilogue

Over the past weeks, hundreds in Young’s treatment and sober living network were discharged with little warning.

Blue Cross and Blue Shield of Oklahoma will stop paying for all addiction treatment in California on Jan. 1, with a few exceptions, the company said.

The crackdown appears to be hitting the Young network. About 1,000 people have been given tickets back to where they came from over the past few weeks after the insurer stopped paying, and houses have emptied out, a spokesman for Young said.

“We regularly assess our plan offerings to ensure we deliver value for our members and align with the market,” Blue Cross and Blue Shield of Oklahoma spokeswoman Tricia Ament said by email. “On Jan. 1, 2025, we are making changes to some individual and family plans sold on and off the Health Insurance Marketplace®. Non-emergency, non-urgent out-of-state care beyond the counties that border Oklahoma will no longer be a covered benefit for the individual and family PPO plans, with certain exceptions detailed in those plans.”

The insurer is committed to members receiving care at the local level, she said, and members will continue to have access to a robust network of providers.

The experience of some patients here might explain why.

Britney Hines came for treatment from Missouri last month with particular urgency. She wanted to get sober, get a job and get her children back. She was insured with Missouri Medicaid, she said, but that wouldn’t cover treatment in California — so she was signed up for Blue Cross and Blue Shield of Oklahoma. “I did not agree to that, I did not sign anything, I don’t even have a card, I don’t know what address they used,” she said.

Hines spent much of October at Santa Monica Detox, where her insurance was billed thousands of dollars a day, then was transferred to sober living in Lancaster, she said. All the professionals she saw were via Zoom, but she was doing the work, testing drug- and alcohol-free, maintaining her sobriety. She was hopeful the authorities back home — who held her children’s fate in their hands — would see how hard she was trying and help her family reunite.

But the updates didn’t make it back to Missouri, she said. And then houses started closing down.

“It’s crazy, crazy, crazy,” she said. “I had to beg, beg, beg (the facility managers) for a flight home. That’s a month without my kids.”

The first weekend in November, Shawnta and Gabriel Hardy encountered similar upheaval. They were given plane tickets to a place they didn’t want to return to — North Carolina, where they had started — and no plan for what should come next. They took a bus to a town in Ohio. Now, they’re homeless.

“It was a tremendous loss, a waste of time,” Gabriel Hardy said. “This sort of thing can send someone into relapse. It’s ridiculous. Someone should be held accountable.”

Next in the series: Real estate and addiction treatment in residential neighborhoods can be a volatile mix.