Sober Home Fraud Defense
Former DOJ Fraud Section Prosecutors. Nationwide Defense for Sober Home Owners, Treatment Facility Operators, Patient Brokers, Physicians, Laboratory Owners, and Executives Facing Federal Sober Home Fraud, Patient Brokering, and EKRA Investigations and Charges.
Based in Washington, D.C., Armstrong & Bradylyons PLLC defends sober home owners, substance abuse treatment facility operators, patient brokers, physicians, laboratory owners, marketers, and executives in federal sober home fraud, patient brokering, and EKRA investigations and cases nationwide.
The firm’s healthcare fraud defense practice is built on nearly a decade of combined experience at the nation’s preeminent healthcare fraud enforcement unit: the Healthcare Fraud Unit of DOJ’s Fraud Section. Scott Armstrong, Drew Bradylyons, and Andrea Savdie tried 17 federal jury trials in healthcare fraud cases at DOJ’s Fraud Section involving over $2.8 billion in alleged false and fraudulent claims to federal healthcare programs. The firm uses that experience to defend individuals in sober home fraud cases at every stage: from the first grand jury subpoena, through federal indictment, and at trial.
Sober home fraud and substance abuse treatment fraud are named priorities of DOJ’s Sober Homes Initiative. The firm defends individuals in the federal districts where sober home enforcement is most active: the Southern District of Florida, the District of Arizona, the Central District of California, the Eastern District of New York, and federal courts across the country.
Armstrong & Bradylyons PLLC defends every sober home fraud case from the start as if it will go to trial. That is not a slogan. It is the operating principle of the firm, grounded in 25 federal jury trials in complex fraud cases in federal courts across the country.
Trial experience drives results at every stage. Sober home fraud cases are built on patient referral records, financial transaction analysis, cooperating witness testimony, and urine drug testing data. They involve allegations of patient brokering, kickback arrangements between sober homes and treatment facilities, medically unnecessary urine drug testing, billing for services not rendered, and exploitation of vulnerable patients seeking addiction treatment. The firm builds the factual record from the first day of engagement: analyzing billing data, tracing financial relationships, retaining experts, identifying and preparing witnesses, and developing a case theory that can withstand the government’s scrutiny.
The firm’s attorneys know how federal prosecutors build healthcare fraud cases because they built them. Scott Armstrong served for nearly a decade at DOJ’s Fraud Section, where he served as lead trial counsel in 16 federal jury trials, including complex healthcare fraud cases involving Medicare, Medicaid, and Tricare. Scott also directed DOJ’s Appalachian Regional Prescription Drug Task Force. Drew Bradylyons served as Chief of EDVA’s Financial Crimes and Public Corruption Unit and, before that, supervised the Healthcare Fraud Unit’s Miami Strike Force at DOJ’s Fraud Section. That combined experience provides the firm with an unmatched understanding of how federal healthcare fraud cases are investigated, charged, and tried.
The firm relishes the opportunity to try cases. Its willingness to go to trial and its proven skills at trial provide significant leverage in negotiations with federal prosecutors at every stage of a sober home fraud case.
Sober home fraud and substance abuse treatment fraud are named enforcement priorities of DOJ’s Fraud Section. In 2020, DOJ launched its Sober Homes Initiative, led by the National Rapid Response Strike Force and the Los Angeles Strike Force. The initiative prosecutes individuals who exploit patients seeking treatment for drug and alcohol addiction. It has resulted in over $1.2 billion in alleged false billings since its inception.
The enforcement has intensified. DOJ’s 2025 Year in Review specifically highlighted the Substance Abuse Treatment Initiative as a priority, targeting treatment centers that bill federal and state healthcare programs for services that were not provided, were misrepresented, or were tainted by illegal kickback arrangements. The 2025 National Health Care Fraud Takedown included sober home fraud cases among its headline prosecutions.
In February 2025, two South Florida addiction treatment facility operators were convicted after a seven-week federal trial for a $112 million fraud scheme. They were convicted of healthcare fraud, wire fraud conspiracy, paying and receiving kickbacks, and money laundering. They paid kickbacks to patients through patient recruiters and received kickbacks from testing laboratories. In June 2024, a Broward County addiction recovery clinic owner was indicted for a $19.2 million sober home fraud scheme.
Arizona has emerged as a second epicenter of sober home fraud enforcement. A massive Medicaid fraud scheme targeting Native Americans cost taxpayers an estimated $2.5 billion. More than 375 providers were suspended. At least 40 people died in sober living homes between 2022 and 2024. One defendant submitted approximately $650 million in false claims for behavioral health services that were never provided or were so substandard they served no treatment purpose. DOJ’s investigation in the District of Arizona is ongoing.
In 2018, Congress enacted the Eliminating Kickbacks in Recovery Act (EKRA) as part of the SUPPORT Act. EKRA created a new federal criminal statute that prohibits kickback payments for referrals to recovery homes, clinical treatment facilities, and laboratories. EKRA extends beyond federal healthcare programs to cover private insurance. It carries penalties of up to 10 years and $200,000 per violation. Throughout 2025, DOJ brought multiple EKRA indictments focused on substance abuse facilities, patient brokers, and sober home marketing operations. The Ninth Circuit upheld an EKRA conviction in July 2025, broadening the statute’s reach to cover payments to marketing intermediaries.
The firm’s sober home fraud defense practice is built on healthcare fraud trial experience, deep knowledge of federal anti-kickback and patient brokering laws, and years of experience investigating and prosecuting complex healthcare fraud cases at DOJ’s Fraud Section. These tools are deployed at every phase of a case.
Challenging the Government’s Patient Brokering and Kickback Theory
The government’s case in sober home fraud prosecutions almost always centers on patient brokering and kickback allegations. Prosecutors allege that sober homes paid patient recruiters for referrals, that treatment facilities paid sober homes for access to patients, or that laboratories paid kickbacks for urine drug testing referrals. The firm analyzes every financial relationship against the Anti-Kickback Statute, EKRA, and applicable state patient brokering laws. It evaluates compensation structures, written agreements, fair market value analyses, and whether arrangements qualify for statutory safe harbors under either statute.
Challenging the Government’s Claims That Services Were Not Rendered or Were Medically Unnecessary
Federal prosecutors allege that treatment facilities billed for therapy sessions that never occurred, group therapy that was not conducted, individual counseling that was fabricated, and urine drug testing that was excessive and medically unnecessary. The firm challenges the government’s billing analysis at every level. It retains clinical experts to evaluate whether treatment services met applicable standards of care, reviews clinical documentation for accuracy, and presents evidence that services were in fact rendered and supported by the patient’s treatment plan.
Defending Against Urine Drug Testing Fraud Allegations
Urine drug testing is at the center of many sober home fraud prosecutions. The government alleges that treatment facilities and laboratories billed for excessive, medically unnecessary, or fabricated urine drug tests. Testing can cost from five dollars to several thousand dollars per test depending on the methodology. The firm challenges the government’s characterization of testing frequency and methodology, retains toxicology and addiction medicine experts to establish clinical justification, and analyzes whether testing protocols were consistent with applicable clinical guidelines and the patient’s individualized treatment plan.
Challenging the Government’s Proof of Knowledge and Intent
Federal healthcare fraud, EKRA, and Anti-Kickback Statute violations require proof of knowing and willful conduct. Good faith matters. The firm presents evidence of compliance programs, reliance on legal counsel, legitimate business purposes for compensation arrangements, and the clinical basis for treatment and testing decisions. Where the government relies on cooperating witness testimony to establish intent, the firm attacks the reliability, credibility, and motivations of those witnesses. The firm’s attorneys have extensive experience cross-examining cooperating witnesses in federal healthcare fraud trials.
Federal sober home fraud investigations target individuals at every level of the operation: from the sober home owners who house patients, to the treatment facility operators who bill for services, the laboratories that process urine drug tests, the physicians who order treatment, and the patient brokers who recruit patients. Armstrong & Bradylyons PLLC defends these individuals in federal investigations, after indictment, and at trial.
Defense of Sober Home Owners and Operators
The firm defends the founders, owners, and operators of sober living homes, recovery residences, and halfway houses in federal fraud, kickback, EKRA, and money laundering investigations and prosecutions. Sober home owners are primary enforcement targets. Prosecutors pursue owners who allegedly received kickbacks from treatment facilities or laboratories for patient referrals, paid patient brokers for referrals, allowed patients to continue using drugs or alcohol while billing for sober living services, or operated sober homes without required state licensing. The firm defends sober home owners by challenging the government’s evidence of personal knowledge, direction, and intent.
Defense of Treatment Facility Owners and Operators
The firm defends the owners and operators of substance abuse treatment centers, outpatient treatment facilities, and behavioral health clinics in federal sober home fraud cases. Treatment facility operators face criminal exposure when the government alleges they paid kickbacks to sober homes for patient referrals, billed for therapy sessions and counseling that were not provided or were misrepresented, submitted claims for medically unnecessary urine drug testing, or falsified clinical documentation. The firm defends treatment facility operators by challenging the government’s billing analysis, presenting clinical evidence of legitimate treatment, and contesting the government’s evidence of intent.
Defense of Patient Brokers and Recruiters
The firm defends patient brokers, recruiters, call center operators, and marketers who face federal charges for allegedly recruiting patients for sober homes and treatment facilities in exchange for compensation. Patient brokering is the central theory in most sober home fraud prosecutions. The government treats any payment tied to patient referrals as a potential Anti-Kickback Statute or EKRA violation. The firm defends patient brokers by challenging the government’s evidence of knowledge, intent, and the nature of the compensation arrangement.
Defense of Physicians and Medical Directors
The firm defends physicians, medical directors, and nurse practitioners who face federal charges in sober home fraud cases. Physicians face exposure when the government alleges they ordered medically unnecessary urine drug testing, signed treatment plans for patients they never examined, received kickbacks for ordering tests or prescribing treatment, or served as sham medical directors for treatment facilities. The firm defends physicians by establishing the clinical basis for treatment decisions and challenging the government’s evidence of kickback payments and fraudulent intent.
Defense of Laboratory Owners and Operators
The firm defends laboratory owners and operators who face federal charges for alleged involvement in sober home fraud schemes. Laboratories face exposure when the government alleges they paid kickbacks to sober homes or treatment facilities for urine drug testing referrals, billed for tests that were not ordered by a treating physician, performed excessive or medically unnecessary testing, or billed at inflated rates for confirmatory testing that was not clinically indicated. The firm defends laboratory owners against healthcare fraud, EKRA, and kickback charges.
Federal sober home fraud investigations follow a pattern. Understanding that pattern is the first step to defending against it. Scott Armstrong and Drew Bradylyons built these types of cases as senior prosecutors at DOJ’s Fraud Section. They know how federal investigators identify targets, develop evidence, and present cases to grand juries.
Insurance Claims Analysis and Billing Pattern Review
The investigation often begins with claims data. Federal investigators and insurance companies analyze billing patterns to identify treatment facilities with unusually high volumes of urine drug testing, disproportionate billing for high-cost confirmatory tests, rapid patient turnover, and billing for therapy services that do not correspond to staffing levels or patient census. In Medicaid fraud cases, state agencies like CMS and state Medicaid Fraud Control Units use data analytics to flag outlier providers. In cases involving private insurance, carriers refer suspicious billing patterns to law enforcement.
Financial Relationship and Kickback Tracing
Federal investigators map financial relationships between sober homes, treatment facilities, laboratories, patient brokers, and physicians. They trace payments through bank records, Zelle and Venmo transactions, cash withdrawals, shell companies, and cryptocurrency wallets. The government looks for payments that correlate with patient referral volume, payments disguised as rent, consulting fees, or marketing expenses, and financial flows between entities under common ownership or control. Financial analysis is the backbone of the kickback case.
Patient and Employee Interviews
Federal agents from the FBI and HHS-OIG interview current and former patients, employees, counselors, nurses, and patient recruiters. They look for cooperating witnesses who can testify about whether patients were actually receiving treatment, whether sober homes were actually enforcing sobriety, whether therapy sessions were actually conducted, whether patient brokers were paid for referrals, and whether clinical documentation was fabricated. Cooperating witnesses are a cornerstone of federal sober home fraud prosecutions. Patient testimony is particularly powerful because many patients are themselves victims of the alleged scheme.
Undercover Operations and Surveillance
Federal and state investigators use undercover operations in sober home fraud cases. Agents pose as patients, patient brokers, or treatment providers to document kickback negotiations and referral arrangements in real time. Investigators conduct physical surveillance of sober homes to determine whether residents are actually receiving treatment, whether the facility meets licensing requirements, and whether drug use is occurring on the premises. In South Florida, the Palm Beach County Sober Homes Task Force has used undercover operations extensively.
State Regulatory and Licensing Investigations
Federal sober home fraud investigations frequently run in parallel with state regulatory actions. State agencies suspend provider licenses, revoke Medicaid enrollment, and refer cases to federal law enforcement. In Arizona, the state Medicaid agency suspended over 375 providers and referred cases to DOJ. In Florida, state patient brokering prosecutions run alongside federal healthcare fraud cases. State regulatory actions often precede federal criminal charges and provide investigators with access to records and witnesses.
Search Warrants and Electronic Evidence
Federal agents routinely seek and execute search warrants for cell phones, laptops, and cloud-based accounts in sober home fraud investigations. These warrants target communications between sober home owners, treatment facility operators, patient brokers, laboratory representatives, and physicians that reveal knowledge of kickback arrangements, directives to fabricate clinical documentation, discussions about patient recruitment strategies, and efforts to conceal the true nature of financial relationships. Federal agents obtain cloud warrants under 18 U.S.C. § 2703 of the Stored Communications Act.
Federal sober home fraud prosecutions draw on several criminal statutes. Sober home cases are distinctive because they invoke both traditional healthcare fraud statutes and the newer EKRA statute, which extends federal jurisdiction to private insurance. The government charges aggressively and stacks counts.
Eliminating Kickbacks in Recovery Act (18 U.S.C. § 220)
EKRA is the statute most specific to sober home fraud. It prohibits knowingly and willfully paying or receiving remuneration to induce referrals to recovery homes, clinical treatment facilities, or laboratories. EKRA covers all payors, including private insurance. This is its critical distinction from the Anti-Kickback Statute. EKRA’s safe harbors are narrower than those under the AKS. Commission-based compensation to sales personnel violates EKRA even if it would be permissible under the AKS. Penalties include up to 10 years of imprisonment and $200,000 per violation. The Ninth Circuit upheld an EKRA conviction in July 2025, confirming that payments to third-party marketing intermediaries can constitute illegal inducement.
Healthcare Fraud (18 U.S.C. § 1347)
Healthcare fraud makes it a federal crime to knowingly and willfully execute a scheme to defraud any healthcare benefit program. In sober home cases, this statute targets billing for treatment services not rendered, billing for medically unnecessary urine drug testing, and submitting claims for patients who were not receiving legitimate treatment. The penalty is up to 10 years of imprisonment per count. If the fraud results in serious bodily injury, the maximum increases to 20 years. If it results in death, a life sentence is possible. In sober home cases involving patient deaths, this enhancement carries real weight.
Anti-Kickback Statute (42 U.S.C. § 1320a-7b)
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving anything of value to induce or reward referrals for services covered by federal healthcare programs. In sober home cases, prosecutors charge kickbacks between sober homes and treatment facilities, kickbacks from laboratories for urine drug testing referrals, and payments to patient brokers for recruiting patients enrolled in Medicare, Medicaid, or other federal programs. Violations carry up to 10 years of imprisonment per violation.
Wire Fraud (18 U.S.C. § 1343)
The government frequently charges wire fraud in sober home fraud prosecutions. Wire fraud applies to any scheme to defraud that uses interstate wire communications. Wire fraud carries a maximum penalty of 20 years of imprisonment per count.
Money Laundering (18 U.S.C. §§ 1956, 1957)
Money laundering charges are common in large-scale sober home fraud prosecutions. The government charges money laundering when it alleges that defendants conducted financial transactions involving fraud proceeds with the intent to conceal or promote the underlying scheme. Money laundering carries up to 20 years of imprisonment per count. In sober home cases, prosecutors trace fraud proceeds through shell companies, nominee bank accounts, real estate purchases, and luxury goods.
State Patient Brokering Statutes and Parallel Enforcement
Many states have enacted patient brokering statutes that run alongside federal enforcement. Florida’s patient brokering statute makes it a felony to offer, pay, solicit, or receive remuneration for patient referrals. The Palm Beach County Sober Homes Task Force has prosecuted dozens of cases under this statute. Arizona has enacted new sober living home oversight legislation in response to the Medicaid fraud crisis. Federal and state prosecutions often run in parallel. Statements made in state proceedings can be used in federal cases. An experienced defense attorney navigates both tracks simultaneously.
Federal Program Exclusion and Collateral Consequences
Beyond incarceration and fines, a conviction or settlement in a sober home fraud case triggers mandatory exclusion from Medicare, Medicaid, and all federal healthcare programs under the authority of HHS-OIG. For physicians and licensed professionals, exclusion effectively ends a career. State licensing boards may initiate independent disciplinary proceedings. Treatment facility operators face permanent loss of the ability to bill any federal healthcare program.
What Is DOJ’s Sober Homes Initiative?
DOJ’s Sober Homes Initiative is a coordinated enforcement program launched in 2020. It is led by the National Rapid Response Strike Force and the Los Angeles Strike Force. The initiative prosecutes defendants who exploit patients seeking treatment for drug and alcohol addiction. It has resulted in over $1.2 billion in alleged false billings.
The initiative targets sober home owners, treatment facility operators, patient brokers, laboratories, and physicians involved in schemes to bill for unnecessary or nonexistent treatment services. DOJ’s 2025 Year in Review specifically highlighted substance abuse treatment fraud as a continuing enforcement priority.
Scott Armstrong and Drew Bradylyons defend individuals in federal sober home fraud cases nationwide, including cases arising from the Sober Homes Initiative.
What Is EKRA and How Does It Apply to Sober Homes?
The Eliminating Kickbacks in Recovery Act (EKRA), codified at 18 U.S.C. § 220, is a federal criminal statute enacted in 2018. It prohibits knowingly and willfully paying or receiving remuneration to induce referrals to recovery homes, clinical treatment facilities, or laboratories.
EKRA covers all payors. That is its critical distinction from the Anti-Kickback Statute, which applies only to federal healthcare programs. EKRA reaches kickback arrangements funded by private insurance. Its safe harbors are narrower than those under the AKS. Commission-based compensation to sales personnel violates EKRA even if it would be permissible under the AKS.
Throughout 2025, DOJ brought multiple EKRA indictments targeting substance abuse facilities, patient brokers, and sober home marketing operations. The Ninth Circuit upheld an EKRA conviction in July 2025.
What Are the Penalties for a Federal Sober Home Fraud Conviction?
The penalties are severe. Healthcare fraud carries up to 10 years per count. If the fraud results in serious bodily injury, the maximum is 20 years. If it results in death, a life sentence is possible. Wire fraud carries up to 20 years per count. Money laundering carries up to 20 years per count. EKRA violations carry up to 10 years and $200,000 per violation. Anti-Kickback Statute violations carry up to 10 years per violation.
In February 2025, two South Florida treatment facility operators were convicted in a $112 million scheme involving healthcare fraud, kickback conspiracy, and money laundering. Federal sentencing in sober home fraud cases is driven by the loss amount, which can reach into the tens or hundreds of millions of dollars.
What Is Patient Brokering and Why Does It Drive Sober Home Fraud Prosecutions?
Patient brokering is the practice of paying or receiving compensation for recruiting, referring, or steering patients to healthcare providers. In sober home fraud cases, patient brokers recruit individuals with insurance coverage and direct them to specific sober homes, treatment facilities, or laboratories in exchange for per-patient payments.
Patient brokering is the central enforcement theory in most sober home fraud prosecutions. The government treats any payment tied to the volume of patient referrals as strong evidence of an Anti-Kickback Statute or EKRA violation. Florida’s state patient brokering statute makes it a felony punishable by up to five years of imprisonment. Federal charges carry substantially greater exposure.
What Defenses Are Available in a Federal Sober Home Fraud Case?
The available defenses depend on the specific allegations. Common defenses include the following:
Legitimate services. Presenting evidence that treatment services were actually provided and clinically appropriate.
Safe harbor compliance. Demonstrating that compensation arrangements fell within recognized safe harbors under the AKS or EKRA.
Lack of intent. Presenting evidence of good faith, compliance programs, reliance on legal counsel, and legitimate business purposes.
Clinical justification for testing. Retaining toxicology and addiction medicine experts to establish that urine drug testing was medically necessary and consistent with applicable clinical guidelines.
Cross-examining cooperators. Attacking the credibility of cooperating witnesses, including former patients and co-conspirators with plea agreements.
Scott Armstrong and Drew Bradylyons leverage their significant federal trial experience as former prosecutors to anticipate the government’s trial strategy and develop an aggressive, evidence-based defense.
What Triggers a Federal Sober Home Fraud Investigation?
Federal sober home fraud investigations are typically triggered by insurance company referrals identifying suspicious billing patterns, qui tam whistleblower complaints filed by former employees or patients under the False Claims Act, complaints from current or former employees or patients, state regulatory or licensing actions against treatment providers, CMS or state Medicaid Fraud Control Unit referrals, and law enforcement referrals from local drug task forces or state attorneys general.
Common red flags include unusually high urine drug testing volume, billing for therapy services that exceeds staffing capacity, rapid patient turnover with short treatment episodes, and financial relationships between sober homes and treatment facilities that suggest kickback arrangements.
How Does EKRA Differ from the Anti-Kickback Statute?
EKRA and the Anti-Kickback Statute both prohibit kickbacks for patient referrals, but they differ in important ways.
Scope. The AKS applies only to federal healthcare programs. EKRA applies to all payors, including private insurance. This is EKRA’s most significant expansion.
Safe harbors. EKRA’s safe harbors are narrower. The AKS permits commission-based compensation to bona fide employees in many circumstances. EKRA prohibits compensation that varies with the volume of referrals, even to employees.
Penalties. EKRA carries up to 10 years and $200,000 per violation. The AKS carries up to 10 years and $100,000 per violation.
Arrangements that complied with the AKS may violate EKRA. This creates significant exposure for sober homes and treatment facilities that structured compensation arrangements before EKRA was enacted.
Can a Sober Home Owner Be Charged Even If the Treatment Facility Submitted the Claims?
Yes. The sober home owner does not need to have directly submitted claims to Medicare, Medicaid, or private insurance to face federal charges. The government uses theories of conspiracy and aiding and abetting to reach individuals who participated in the overall scheme.
If a sober home owner received kickbacks for patient referrals, steered patients to specific treatment facilities, or facilitated access to patients for billing purposes, that conduct supports federal charges. The conspiracy charge captures every participant in the referral chain.
What Is the “Florida Shuffle” and How Does It Create Federal Exposure?
The “Florida Shuffle” refers to a fraud model in which patients with insurance coverage are cycled through networks of sober homes, treatment facilities, and laboratories. Patients are moved between facilities not for clinical reasons but to maximize billable services. Brokers recruit patients from out of state, and facilities generate revenue through repeated admissions, excessive urine drug testing, and duplicative billing for therapy services.
Federal prosecutors have charged operators of Florida Shuffle networks with healthcare fraud, wire fraud, kickback violations, EKRA violations, and money laundering. The Southern District of Florida has been the epicenter of these prosecutions.
Does Armstrong & Bradylyons Handle Sober Home Fraud Cases Nationwide?
Yes. Armstrong & Bradylyons PLLC defends individuals in federal sober home fraud investigations and prosecutions nationwide. The firm can practice in every federal district court in the country.
Sober home fraud enforcement is concentrated in the Southern District of Florida, the District of Arizona, the Central District of California, the Eastern District of New York, and federal courts in states with active substance abuse treatment industries. DOJ’s Sober Homes Initiative operates nationwide through the National Rapid Response Strike Force.
Scott Armstrong and Drew Bradylyons have tried healthcare fraud cases and handled investigations in federal courts throughout the country during their combined 25-year DOJ career. The firm is based in Washington, D.C. and represents clients in every jurisdiction where DOJ, HHS-OIG, and state law enforcement investigate and prosecute sober home fraud cases.