Rehab operator paid kickbacks to ‘body brokers’ in exchange for patients, prosecutors say

The scheme was simple, federal prosecutors said.

Scott Raffa needed to fill his Orange County rehabilitation centers with people struggling with addiction so he could collect from the patients’ insurers for weeks or months at a time. “Body brokers” helped him find the patients. In exchange, he paid them handsomely — to the tune of $174,600 over a year and a half — prosecutors alleged.

Raffa runs three Orange County sober living facilities — Sober Partners Waterfront Recovery Center, Sober Partners Reef House and Sober Partners Beach House.

The homes focused on “fun” for recovering drug and alcohol users.

“Make no mistake, left un-treated Alcohol and Drug Addiction is a life threatening disease and we believe that in order to ‘show’ our clients that life is better Sober, a little Sun and Fun doesn’t hurt,” Raffa’s company wrote on its website. “A key to Sober Partner’s Philosophy is to demonstrate how Sobriety can be fun or our clients won’t find value in the work it takes to stay Sober. We insist on having fun with our clients.”

But behind the scenes, Raffa sought to make sure he was filling his properties with well-insured clients.

Prosecutors alleged that he entered into “sham” contracts with so-called body brokers, who would find new patients for his businesses. He would pay the body brokers based on the prospective patient’s insurance and the length of time they were expected to stay in the rehab center, according to the indictment.

If the patient did not stay at least three weeks, Raffa refused to pay, the federal authorities said.

Raffa made 12 illegal kickbacks over the year and a half during which he was operating the scheme, prosecutors alleged. Payments of up to $34,600 went to two different businesses, according to the indictment.

Body brokers sometimes promise prospective patients money — from hundreds of dollars to a few thousand — to check into the rehabs they have chosen, an FBI agent who investigates them explained in a separate court case. Sometimes, the promised pay causes substance users to check into rehab even if they have no desire to get clean. The system of using body brokers is so common that legitimate facilities that don’t pay the brokers have had to close due to lack of patients, the agent, Kathleen Kennedy, said in court documents.

A grand jury indicted Raffa on April 10 and he was arrested Saturday. He pleaded not guilty Monday.

Federal prosecutors declared Orange County the epicenter of addiction industry fraud in 2021, when the Department of Justice promised a crackdown on bad actors in the space.

Prosecutors said the schemes assigned a value to patients based on their insurance and often placed victims in a cycle of rehabilitation and relapse.