Rehab Racket

Number 26105
Subject Fraud
Source CNN
State Calif.
Year 2013
Publication Date July 29, 30, 31 2013; Aug. 2, 2013; Sept. 25, 2013; Sept. 26, 2013
Summary Taxpayers spend tens of millions of dollars each year in California on drug rehab centers designed to help low-income addicts. The clinics make their money billing for every client counseled. But CNN and The Center for Investigative Reporting exposed glaring and systemic failures in the program, including pervasive fraud – reporting that led to scores of clinics getting shut down. In coverage rolled out over several months, the team showed that taxpayers had spent at least $94 million over two years on Los Angeles-area clinics with clear signs of fraud or questionable billing. Regulators who could have stopped the abuses instead let misdeeds multiply. As a result of "Rehab Racket," the official overseeing the program apologized for the poor oversight and the state shut down a total of 177 clinic locations. Officials referred 69 clinics to the state Department of Justice, which opened criminal investigations.
Category Contest Entry
Keywords drugs; rehab; taxes; fraud
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