December 1, 2023

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Bal Harbour brothers get long prison terms in ‘sober homes’ scheme

Miami Herald

Bal Harbour brothers Jonathan and Daniel Markovich have been sentenced to lengthy prison terms after a federal jury found them guilty of bilking $112 million out of private insurance companies for addiction treatment services that prosecutors say were either not provided or were unnecessary.

Jonathan Markovich received about 16 years and Daniel Markovich eight years at sentencing hearings earlier this week before U.S. District Judge William Dimitrouleas in Fort Lauderdale federal court. The brothers, who operated two substance treatment facilities in South Florida, were convicted in November of a healthcare fraud scheme built upon a network of recruiters who enticed patients with free airline tickets, illegal drugs and cash payments, according to evidence at their trial.

The brothers, both in their 30s, are the latest defendants to be sent to prison for enriching themselves off substance abuse programs dubbed “sober homes” in a region that has long been considered the nation’s capital of healthcare fraud. Experts estimate fraud in South Florida and other regions of the country costs private and public health insurance providers billions of dollars annually.

The Fort Lauderdale jury found that the brothers shuffled patients between Compass Detox in Pembroke Pines and WAR Network LLC in Hallandale Beach to bill millions of dollars for purported treatments to major private insurers, including Aetna, Blue Cross/Blue Shield and Magellan Health. Among the fraudulent practices: detox services, therapy sessions and urinalysis tests.

Compass Detox patients were given a “comfort drink” to sedate them so they would keep coming back to the facility, according to Justice Department prosecutors James Hayes and Jamie de Boer. Patients were also given large amounts of controlled substances to keep them compliant so they could be repeatedly cycled through Compass Detox and WAR Network to generate maximum billing and revenue, the prosecutors said.

In February, three other defendants accused of conspiring with the Bal Harbour brothers struck plea deals in the same insurance fraud case: a lawyer who partly owned the two South Florida addiction treatment centers with Jonathan Markovich, a physician who worked as the medical director of one of the facilities, and a patient recruiter. All three defendants face sentencing in April.

Richard Waserstein, a Bay Harbor Islands attorney and co-owner of Compass Detox and WAR Network, pleaded guilty to a single charge of conspiring to launder money from fraudulent healthcare proceeds. He now faces from 41 to 51 months in prison. As part of his plea deal, Waserstein also must pay restitution of $2.7 million to the private insurance companies that were fleeced by his substance-abuse clinics and pay a forfeiture fine of $5.8 million to the U.S. government, records show.

Drew Lieberman, a Miami-Dade physician who was the chief medical officer of Compass Detox, pleaded guilty to a single charge of conspiring to commit healthcare fraud for admitting patients and submitting false medical claims. Now he faces 10 years in prison and must pay restitution of $18.5 million to the private insurers and a forfeiture fine of $390,000 to the government.

Recruiter Frank Bosch Jr., an employee and contractor of Compass Detox, pleaded guilty to a conspiracy to offer and pay kickbacks to patients and now faces from 46 to 57 months in prison. As part of his plea deal, Bosch, who lives in Miami-Dade County, must pay restitution of $2.88 million to the private insurers but a forfeiture fine of only $7,331 to the government.

This story was originally published March 24, 2022 10:25 AM.

Profile Image of Jay Weaver

Jay Weaver writes about federal crime at the crossroads of South Florida and Latin America. Since joining the Miami Herald in 1999, he’s covered the federal courts nonstop, from Elian’s custody battle to A-Rod’s steroid abuse. He was part of the Herald team that won the 2001 Pulitzer Prize for breaking news on Elian’s seizure by federal agents. He and three Herald colleagues were 2019 Pulitzer Prize finalists for explanatory reporting for a series on gold smuggling between South America and Miami.