For Ken Daniels, the longtime play-by-play voice of the Detroit Red Wings, it was a moment of elation.
“F—, yeah! Finally,” he thought to himself.
Ken’s ex-wife, Lisa, says she started “shaking and crying” when she heard.
Their emotional reaction came after hearing the news last week that Michael Ligotti, a Delray Beach, Florida, doctor, had been arrested by the FBI for his alleged role in a massive insurance fraud scheme.
Jamie Daniels, Ken and Lisa’s son, had been one of Ligotti’s patients. On Dec. 7, 2016, Ken was the first person in the family to receive the devastating news that Jamie had died of an overdose in a South Florida home where he had been trying to stay sober. Jamie was 23. He left behind Ken, Lisa and younger sister Arlyn, his “best friend,” as Ken describes her.
Ligotti, 46, an osteopathic physician, was charged July 29 with conspiracy to commit health care fraud and wire fraud. A criminal complaint, unsealed last week, alleges that from May 2011 through March 2020, Ligotti billed private insurance companies and Medicare approximately $681 million for laboratory testing claims and other services as part of a fraudulent scheme, for which he was paid approximately $121 million.
Ligotti “generated millions of dollars by preying on patients seeking substance abuse treatment,” Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division said in a statement about the charges.
“Health care providers who allow greed to take precedence over their Hippocratic Oath and participate in these schemes are criminals and will be held accountable,” Ariana Fajardo Orshan, U.S. attorney for the Southern District of Florida, said in the statement.
Ligotti, who has been released on bond, “looks forward to establishing his innocence,” his attorney, Ben Curtis, told ESPN. “We do not believe the U.S. Department of Justice’s claims — and that is exactly what they are at this point, just one-sided claims.”
Ken and Lisa Daniels say they believe Jamie was one of the patients Ligotti used to bill for fraudulent claims.
In the eight months prior to his death, Jamie had been in and out of drug rehabilitation facilities in South Florida, battling an addiction to prescription opioids such as Vicodin and the anti-anxiety medication Xanax. He died of an overdose of heroin that had been laced with fentanyl, a synthetic and far more potent form of the drug, according to an autopsy report and death certificate.
As E:60 first reported in April 2018, Jamie’s death revealed to his parents something they had never considered when they sent him to Florida to get help for his addiction — a corrupt side to the billion-dollar rehabilitation industry in South Florida, where federal laws are exploited by people who actually have no interest in keeping recovering addicts clean. Jamie had been caught in an alleged insurance scam known as the “Florida Shuffle.”
By April 2016, when Jamie first sought treatment in South Florida, Palm Beach County was the epicenter of the state’s opioid crisis; 571 people died from overdoses that year alone, the most of any county in the state and a 110% increase from the previous year, according to an analysis of state data at the time by the Palm Beach Post.
After detoxing at an in-patient facility, Jamie moved to different recovery centers before eventually moving, in late November 2016, into what’s known as a “sober home” in the middle of a residential street in Boynton Beach.
“The whole concept of having kids in a sober house, to mutually support each other and keep each other honest and struggle together for sobriety, is pretty good — done right. Done wrong, the results are much worse,” Marc Woods, a code enforcement officer for the city of Delray Beach, told ESPN in a 2018 interview.
Woods spent 30 years working as a police officer in Delray Beach before retiring in 2009.
In 2014, when he was working as a code enforcement officer, Woods said he noticed a shift in the character of the sober homes that dotted residential neighborhoods in his area. Shortly after the federal Affordable Care Act kicked in, Woods said, insurance companies lifted the limits on policies for drug treatment, essentially giving treatment centers a blank check. Around that same time, Woods said, many sober home operators realized urine samples could be liquid gold, because the insurance companies would be required to reimburse them for the tests.
“The recovery industry took a turn for the worse when people found out that the urine testing billing was lucrative, and the wrong people got in the industry to enrich themselves,” Woods says.
It was the perfect storm. Sober homes, by then estimated to number in the hundreds, opened in neighborhoods across Palm Beach County, and because of the privacy protections afforded addicts under federal laws, local governments could do little about what was happening in them.
“You have sober home owners who are using that law designed to protect individuals in recovery, so they can prey upon people in recovery,” Dave Aronberg, state attorney for Palm Beach County, told ESPN in a 2018 interview.
“In the Florida Shuffle, you go in and out of recovery, in and out of rehab centers, in and out of sober homes, milking the individual for their insurance until that person dies. Our current system isn’t really a recovery model, it’s a relapse model, where the big money is in relapse,” Aronberg said.
When contacted this week, Aronberg said his county has had success in recent years cleaning up the corrupt side of the rehab industry. He said there have been 109 arrests since October 2016 and called Ligotti’s arrest “the most significant of its kind since Kenny Chatman.” Chatman, who once ran several treatment centers and sober homes in Palm Beach County, was sentenced in May 2017 to more than 27 years in federal prison for defrauding insurance companies of an estimated $24 million between 2013 and 2016.
“Our investigators have spoken to thousands of individuals with substance use disorder, as well as many parents of children who have died of opioid overdoses. Nearly all of them have been touched by Dr. Ligotti’s medical practice. In addition, most of the individuals we have prosecuted for operating rogue sober homes or corrupted treatment facilities have also had dealings with Dr. Ligotti,” Aronberg said in a statement released to ESPN.
Ultimately, Ken Daniels’ insurance provider determined it had been billed for roughly $60,000 in fraudulent charges from various facilities that claimed to house and treat Jamie. Most of those charges were for urine tests, completed over a two-month period in the fall of 2016.
The allegations in last week’s criminal complaint against Ligotti detail how he became the “medical director” for more than 50 addiction treatment facilities or sober homes, and that he repeatedly authorized “bogus” tests and treatments — billing for urine tests, blood tests, office visits and therapy sessions whether they were needed or not, and, in some cases, whether or not they actually happened.
“Numerous former patients, employees, and associates working with Ligotti have provided information to law enforcement regarding fraudulent activity,” the criminal complaint states.
In Jamie’s case, medical records reviewed by ESPN revealed that specimens for three urine tests authorized by Ligotti were collected in Florida in late November 2016, yet Jamie wasn’t actually in Florida on those dates to give the urine samples. He was visiting his family in Michigan over Thanksgiving, something ESPN was able to confirm after reviewing plane tickets and date-stamped photographs.
When asked in 2018 why he would order drug tests on dates when a patient wasn’t even physically present to provide a sample, Ligotti told ESPN that such a request “would absolutely be fraudulent.”
“If that specimen was ordered on a day where the patient wasn’t in the state of Florida, that would absolutely be a fraudulent specimen, and I wouldn’t have ordered it. I couldn’t have ordered it,” Ligotti said at the time.
Ligotti explained that he was the victim of identity theft. In 2013, he wrote a letter to Florida’s Department of Children and Families, the state agency that regulates medical care at substance abuse treatment facilities, notifying the agency that somebody had stolen the ID number he uses to authorize drug treatment.
“He’s lying,” Ken Daniels says now of Ligotti’s 2018 explanation, adding, “[Ligotti] was a so-called addiction specialist, but he was addicted to getting as much money as he could. He didn’t care about his patients.”
Curtis, Ligotti’s attorney, declined to discuss specifics of the case.
Lisa Daniels says she turned documentation relating to Jamie’s case over to a task force in Palm Beach County, which includes a representative of the FBI and investigates health care fraud in the county’s rehab industry. It’s not clear whether evidence from Jamie’s case was used to charge Ligotti.
In the spring of 2018, after first telling Jamie’s story to The Athletic and later E:60, Ken Daniels began speaking publicly about his son’s struggles with addiction and the insurance scam that hindered Jamie’s recovery and ultimately contributed to his death. Lisa Daniels has since told Jamie’s story to a congressional subcommittee.
Through the Jamie Daniels Foundation, they’ve raised money for an 80-unit facility, which Ken says they plan to build in southeast Michigan, to house people suffering from substance use disorder.
While buoyed by the news of Ligotti’s arrest, Ken and Lisa realize that their work honoring Jamie’s life is far from over.
“I’m elated that he was charged,” Lisa says of Ligotti’s arrest. “We got one. And this was a big fish. But there are thousands more out there.”
The FBI is asking potential victims or those with information related to Ligotti or his former Delray Beach clinic, Whole Health, to email ReportML@FBI.GOV and use the title “Ligotti Whole Health” in the subject line of the email.
John Barr is an investigative reporter for ESPN’s Investigative and News Enterprise Unit, and Mike Farrell is a producer with E:60.