Orange County Register
Federal agents searching Sovereign Health rehab in San Clemente, elsewhere
By Scott Schwebke and Teri Sforza
June 13, 2017

The FBI, along with state and local officials, executed multiple sealed search warrants at several Sovereign Health locations on Tuesday, including the company’s offices in San Clemente.

No immediate arrests were expected to be made in conjunction with the raids, said Thom Mrozek, spokesman for the U.S. Dept. of Justice. There’s no timetable for when the warrants might become public, and Mrozek would not comment on what information officials were seeking.

Sovereign has addiction treatment centers in San Clemente, Culver City, Palm Desert and El Cajon as well as Arizona, Texas, Utah and Florida.

FBI spokeswoman Laura Eimiller said multiple warrants were served in Culver City, Palm Desert, San Clemente and San Juan Capistrano. Officials entered a house on Silver Leaf Drive in San Juan Capistrano, owned by Sovereign’s CEO, and appeared to inspect a car in the garage.

Haroon Ahmad, spokesman for Sovereign, said he would be able to comment later Tuesday.

Several Sovereign employees in the parking lot of the San Clemente office building declined to answer questions.

The recovery industry has come under fire of late for widespread insurance fraud, patient dumping and poor quality of care. Though many legitimate operators remain in the industry, long-time rehab consultants complain that recent changes in federal health care and lack of oversight by state and federal agencies are making it tougher for rehab companies to turn an honest profit. They say “body brokering,” in which drug addicted patients are wooed to specific rehab centers with promises of cash payments, free health care and luxurious accommodations, has become increasingly common.

An investigation by The Southern California News Group recently found that the Los Angeles and Orange County is known in the industry as Rehab Riviera, and is a key part of the national problem.

Sovereign has not been accused of illegal practices revealed in the SCNG investigation.

In addition to illegal practices, the SCNG investigation found widespread disagreement between insurance companies and rehab centers over billing. Insurance companies say many rehab centers own or control drug testing companies, and use their dual role in providing medical care to drive up testing revenue. Rehab centers disagree, saying insurance companies sometimes fail to pay legitimate bills.

Records show that Sovereign sued several patients who failed to settle their accounts, lawsuits that revealed some billing details in court. Those show that Sovereign charged $3,410 per day for residential mental health treatment; $2,640 per day for partial mental health treatment; $1,980 per day for intensive outpatient mental health; and $1,200 per urine analysis. One residential patient had 15 urine tests in a single month, resulting in a bill that exceeded $100,000.

Sovereign CEO Tonmoy Sharma was a psychiatrist in the United Kingdom until his license was revoked for conduct deemed dishonest, unprofessional and misleading, according to documents from the General Medical Council of the UK, which licenses physicians there.

Sharma was found to have launched research studies on patients without the required approval of an ethics panel and to have submitted “incorrect and potentially misleading information to a number of ethics committees,” according to documents from the GMC’s proceedings against him. He employed titles that he did not possess – “Ph.D.” and “professor” among them – and “fell significantly short of the standards to be expected of a medical practitioner undertaking medical research on human subjects,” the documents say.

Sharma argued that he believed he had obtained proper ethics clearances when he did his research, and that his course of study was equivalent to a Ph.D. so he was justified in using the title. The GMC was not convinced, however, and his license was “erased” in 2008.

Ahmad, Sovereign’s spokesman, said that Sharma is no longer practicing. Though Sharma did have his license pulled in the U.K., he still has his license in India, he said.

“He’s now the CEO of a one of the more successful leading national provider of behavioral health treatment services in the U.S. with 9 locations in 5 different states,” Ahmad told the Southern California News Group before Tuesday’s raids. “Since then, Dr. Sharma has been recognized with numerous awards, honors and grants for his work in advancing mental health and its treatment in the United States, Europe and Southeast Asia. He is a prolific researcher and scientist as well as the author or co-author of more than 200 peer-reviewed articles and five books on schizophrenia and mental illness. Dr. Sharma has served on numerous editorial boards, acted as peer reviewer for 14 international medical journals, and has been on various advisory boards governing the development of antipsychotics.’

Sharma co-hosts KABC 790 AM (Los Angeles) and KSTAR 92.3 FM (Phoenix) “In Your Right Mind,” a weekly radio show covering behavioral health issues, and serves on the board of directors of the National Alliance on Mental Illness Orange County.

“He’s become a thought leader in the industry and presents at several conferences across the U.S.” Ahmad said.

Many inside the addiction treatment industry were watching Tuesday’s events unfold with awe and unease.

“I’m heartened at the idea that the feds are taking a look at the potential for wrongdoing,” said David Skonezny, a critic of questionable practices who has worked as an addiction counselor, served on the board of directors for California Consortium of Addiction Programs and Professionals, and is now a consultant in the treatment industry.

“If Sovereign Health has been committing any of the offenses that have been talked about, I hope the feds get to the bottom of it. That will put the industry on notice, and hopefully curb some of the practices going on. But it also creates a sense of concern and fear for me. If outside enforcement comes and begins to punish the wrongdoers, the industry is going to lose the autonomy it needs to do its job well.”

Skonezny is working on a uniform code of ethics that he’d like to see embraced industry-wide, which would forbid brokering as well as other questionable practices.

Tonmoy Sharma