Psychiatrist Convicted of Exploiting Vulnerable Patients in $112 Million Addiction Treatment Fraud Scheme

Medical Justice provides consultations to doctors facing medico-legal obstacles. We have solutions for doctor-patient conflicts, unwarranted demands for refunds, online defamation (patient review mischief), meritless litigation, and a gazillion other issues. We also provide counsel specific to COVID-19. If you are navigating a medico-legal obstacle, visit our booking page to schedule a consultation – or use the tool shared below.

Our next case takes us to Miami Lakes, Florida, where a jury convicted a psychiatrist for his role in a $112 million fraud scheme. The psychiatrist, Dr. Jose Santeiro, faces 54 months in prison. And he isn’t alone -the sentences of his associates range from 13 months to 188 months. What happened? More importantly, what can the rest of us law-abiding citizens learn from their circus?   

Let’s start with their scheme. What did they do? Fraud is broad.   

Santeiro served as the medical director of two facilities – one inpatient (Compass Detox) and one outpatient (WAR Network). The twin facilities enlisted small armies of “recruiters” to sleuth the community and refer those suffering from addiction to the clinics. Recruiters incentivized patients by offering them kickbacks. According to the report published by the Department of Justice, these recruiters often went a step further by serving patients illegal drugs. Really. The recruiters wanted to leave nothing to chance. 

Patient recruiters offered kickbacks to induce patients to attend the programs and then gave them illegal drugs to ensure admittance for detox at Compass Detox. 

The medical director and his associates then rallied around a small group of “core” patients, whom they shuffled between facilities. Their goal was to keep their “patients” confined to these facilities for as long as possible, kicking them from one facility to the other to prolong the scheme. If a patient’s urinalysis indicated no drugs were present in his system, one of two things happened: The psychiatrist’s accomplices changed the test results, or the patient received drugs so that future tests declared a positive result.  

Some patients likely realized they were pawns – or they were, at the very least, not receiving proper care. How did the psychiatrist and his associates manage these individuals?  

Whenever patients expressed the desire to leave the facility, they were either medically sedated or served a mixture the courts described only as a “comfort drink”. These measures combined kept “patients” docile and under control.  

Like the Hotel California, you can check out anytime you like – but you can never leave.   

Santeiro allowed his colleagues to sign documents in his name. They used his credentials strategically to inflate the number of “patients” treated by the facility. 

Following a 15-day trial, a jury convicted Santeiro of conspiracy to commit healthcare fraud and wire fraud, as well as eight counts of healthcare fraud.  

Someone determined to violate the law will likely not be deterred by this case – considering the human collateral, 54 months seems light. But there are lessons to be learned by the 99.9% of us who would never participate. Namely, scams like this require a measure of cooperation among their participants. One dissenter would have likely compromised the operation. The medical director was complicit in this case, but there have been other cases where leadership burned because their employees perpetrated similar scams beneath their noses.   

Audit those under your direction who have the power to dispense such medications. Empower your employees to speak up if they sense something is off. And cultivate trust. If members of your team doubt your character, they may assume you are complicit in illegal behavior and say nothing, delaying your opportunity to act. 

What do you think? Let us know your thoughts below. 

Medical Justice provides consultations to doctors facing medico-legal obstacles. We have solutions for doctor-patient conflicts, unwarranted demands for refunds, online defamation (patient review mischief), meritless litigation, and a gazillion other issues. We also provide counsel specific to COVID-19. If you are navigating a medico-legal obstacle, visit our booking page to schedule a consultation – or use the tool shared below.

Jeffrey Segal, MD, JD

Chief Executive Officer and Founder

Dr. Jeffrey Segal, Chief Executive Officer and Founder of Medical Justice, is a board-certified neurosurgeon. Dr. Segal is a Fellow of the American College of Surgeons; the American College of Legal Medicine; and the American Association of Neurological Surgeons. He is also a member of the North American Spine Society. In the process of conceiving, funding, developing, and growing Medical Justice, Dr. Segal has established himself as one of the country’s leading authorities on medical malpractice issues, counterclaims, and internet-based assaults on reputation.

Dr. Segal was a practicing neurosurgeon for approximately ten years, during which time he also played an active role as a participant on various state-sanctioned medical review panels designed to decrease the incidence of meritless medical malpractice cases.

Dr. Segal holds a M.D. from Baylor College of Medicine, where he also completed a neurosurgical residency. Dr. Segal served as a Spinal Surgery Fellow at The University of South Florida Medical School. He is a member of Phi Beta Kappa as well as the AOA Medical Honor Society. Dr. Segal received his B.A. from the University of Texas and graduated with a J.D. from Concord Law School with highest honors.

In 2000, he co-founded and served as CEO of DarPharma, Inc, a biotechnology company in Chapel Hill, NC, focused on the discovery and development of first-of-class pharmaceuticals for neuropsychiatric disorders.

Dr. Segal is also a partner at Byrd Adatto, a national business and health care law firm. Byrd Adatto was selected as a Best Law Firm in the 2021 edition of the “Best Law Firms” list by U.S. News – Best Lawyers. With decades of combined experience in serving doctors, dentists, and other providers, Byrd Adatto has a national pedigree to address most legal issues that arise in the business and practice of medicine.