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The Heroin Crisis in Trump’s Backyard

PALM BEACH COUNTY, Fla.—Across the bridge from Palm Beach’s oceanfront mansions and Mar-a-Lago, the private club owned by President Trump where he spent seven weekends this past winter golfing and entertaining visiting heads of state, it’s not uncommon to see teenage junkies nodding off on coffee shop couches or to come upon them shooting up in supermarket bathrooms. Palm Beach heroin addicts like to get high in public places because if they accidentally overdose, there’s somebody around to call an ambulance. Heroin’s cocoon-like embrace is a national affliction, but here, in the shadow of some of Florida’s priciest real estate, paramedics responded to 5,000 overdose calls last year, nearly 600 of them fatal.

On the campaign trail, as he traversed small towns from Appalachia to the Midwest ravaged by heroin and prescription painkillers, then-candidate Donald Trump promised to build a wall that would block drugs from entering the country. In March, as president, Trump pledgedto help those who have become so badly addicted.” The “total epidemic” that Trump says is “probably almost untalked about” is now in his backyard. Palm Beach County’s heroin crisis is both identical to the misery that has gripped economically ruined communities throughout the Rust Belt and also notably different. Here, the cure is the disease.

Palm Beach County is dubbed “the recovery capital of America” because it’s home to so many drug treatment centers, and has been for at least three decades. But in recent years its reputation as a balmy locale to get well has been particularly hard hit because of the proliferation of corrupt “sober homes,” communal houses for addicts who arrive from around the country, lured by offers of free rent, airplane tickets and even gym memberships. Unregulated, the operators, many of whom lack any professional training, either ignore the rampant drug use at their facilities or even supply their clients with heroin so they can funnel them to outpatient drug treatment centers in exchange for bribes, an illegal practice known as “body brokering.” The owners keep them for as long as their insurance lasts and then they kick them out, broke and still addicted. Local residents have taken to calling them “walkers,” a reference to the stumbling zombies in the TV show “The Walking Dead”: forlorn-looking kids wandering around in a daze, dragging suitcases or toting plastic bags, who often end up sleeping in the park.

One notorious sober home owner, Kenneth Chatman, who was sentenced last month to 27 years, ran a facility where investigators found bloody carpets and clients shooting up in their rooms. A female resident told the judge that she had been kidnapped off the street, drugged and gang-raped.

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Nobody knows just how many sober homes there are because they don’t need permits to open. But one Palm Beach city, Lake Worth—with a population of 38,000—is home to at least 200 sober homes, according to Lake Worth City Commissioner Andy Amoroso. Amoroso is a member of the Palm Beach County Sober Homes Task Force, which was formed last year to crack down on rogue sober home operators. “There’s probably a lot more,” he said.

Local politicians and police blame a troubling surge in heroin overdoses in part on bad sober homes. Lake Worth saw 53 overdose cases in March, up from 17 cases in the previous month. Five of the cases were fatal. Last year in Palm Beach County overall, there were 590 opioid overdose deaths, due not just to heroin but also the prescription painkiller fentanyl and the elephant tranquilizer carfentanil, according to figures released by the Palm Beach County Medical Examiner. That’s more people than were killed in homicides and nearly twice as many deaths from heroin as there were fatal car crashes. Drug dealers often cut heroin with fentanyl or carfentanil, which can be purchased in bulk over the internet from Chinese factories, because it’s cheaper and stronger than heroin.

“These are not even the true numbers,” said Amoroso. Because sober homes stock up on Narcan, a drug that instantly reverses the effect of heroin, many overdoses are not reported, he said.

Even more troubling, alleged Amoroso, is the possibility that some sober home owners instead of calling the police are covering up fatal overdoses that occur on their premises. “We can’t prove it because we never catch them in the act but the Palm Beach County Sheriff’s Department strongly suspect that some of the bad sober homes are dumping dead bodies,” Amoroso said. “You can tell by the way a body is found lying on the ground that somebody pushed the body out of a car.”

The problem is about to get both better and worse. The health care repeal bill now before Congress would cut off insurance money guaranteed under Obamacare that these sober homes have used as an ATM. But the loss of treatment money will be felt by the reputable homes and treatment centers as well, leaving thousands of addicts vulnerable.

In the meantime, the flow of young addicts into the county has not eased. It’s impossible to estimate just exactly how many patients live at these sober homes, but it’s easily in the thousands, 90 percent of whom are from out of state, and many of them barely college age, according to Amoroso. Amoroso has taken to pleading directly with the parents across the country who are sending their children here for help that too often doesn’t come:

“Stop sending your kids to South Florida because we’re sending them home in body bags.”

***

Sober homes are not a new phenomenon. Researchers trace the beginning of sober housing to the “dry hotels” of the 1830’s which were run by religious organizations involved in the temperance movement. In the 1940’s, members of Alcoholics Anonymous opened sober living lodgings in California to provide safe and supportive environments for alcoholics who might otherwise become homeless.

The best known sober homes are the Oxford Houses that began in the 1970’s as not-for-profit, democratically run residences for recovering addicts. Oxford House, which operated dozens of residences around the country, made headlines when it sued a number of cities for housing discrimination under the Fair Housing Act, and the cities counter-sued. One of the cases from Washington state, City of Edmonds v Oxford House, made it all the way to the Supreme Court. In May 1995, the court ruled that municipalities couldn’t use zoning regulations to limit the number of residents who lived in sober homes.
“Anybody can open a sober house,” said Marc Woods, a code enforcement officer for Delray Beach, an upscale resort dotted with fancy restaurants and expensive boutiques about 15 minutes drive from Lake Worth. A leathery ex-cop, Woods was hired by the city to inspect sober homes for code violations in response to complaints from irate neighbors and who has kept a close eye on the recovery industry in South Florida since his days as a police lieutenant. “There are no oversight agencies that hold them accountable because drug addicts are considered disabled by the Fair Housing Act.”

Sober homes sprang up in Palm Beach County in the 1970’s, places where alcoholic husbands and pill-popping housewives could get better, said Woods. Until recently, there was little or no money to be made from sober homes. Many of them struggled to survive.

Woods points to two factors that spurred the rise of corrupt sober living residences in Palm Beach County. The first was the collapse of the housing market in South Florida. People gobbled up houses that were selling for half of what they had been worth months before and filling them with addicts. The other factor was the advent of Obamacare. Not that long ago, many health insurance policies didn’t cover drug treatment, and the ones that did placed limits on how much money could be spent. In most cases, an addict would get one or two shots at treatment, but there was no help if they relapsed again, as is often the case. Obamacare changed that: Not only could children remain on their parents’ insurance until the age of 26, the new law mandated drug addiction should be covered like any other illness, effectively lifting the caps on the amount of money insurance companies were required to pay for treatment.

“Before Obamacare, a typical policy would be $ 80,000 for addiction therapy,” Woods said. “Detox alone cost about $ 30,000, so responsible sober home operators were careful to portion out the benefits. Well, when the Affordable Care Act came in, that took away the maximums.”

Unscrupulous owners soon realized that urine testing was a particularly lucrative way to run up insurance payments. Sober homes and their affiliated laboratories can charge anywhere from $ 1,500-$ 5,000 per screening, depending on the sophistication of the analysis and the number of drugs tested for. Some sober homes, which typically house six to 12 people, test the residents every single day. The Palm Beach Post discovered a 23-year-old man from out-of-state whose parents received a bill for nine months of drug testing totaling over $ 300,000.

“The bottom line is that if you don’t care about the kids, you can make a lot of money,” said Woods. “And if the kid is getting high, you can make even more money. It breaks my heart to see these kids being milked for their insurance cards like dairy cows.”

Soon, sober homes discovered another source of revenue. Sober living facilities don’t provide treatment on site. But that didn’t prevent greedy owners from brokering their clients to intensive outpatient treatment programs in exchange for illegal kickbacks.

Steve Brigante, a recovering heroin addict from Staten Island who moved to Lake Worth to live at one of these sober homes, explained the scam to me as we sat in a Starbucks. “You spend 40 bucks on heroin and you give it to one of the people who lives at your sober home. Then the next day, you send them to detox and get a $ 500 kickback from the detox center. You just made $ 460. That’s how it works down here.”

A fleet of unmarked white vans—nicknamed “druggie buggies”—ferry patients from sober homes to outpatient treatment centers usually located in drab strip malls on the outskirts of town.

“When the kids show up in the druggy buggy at the [treatment center], the first thing they do is check in and then pee in a cup,” explained Woods, the code enforcement officer. “Then they go into group therapy. Ten minutes into group therapy, a lady comes out of a side room and says: ‘You, you, you and you come here’. And then they go into the massage room and get rubbed on for a bit. And then they go into the acupuncture room and get stuck with pins. And then they go back into the group therapy for the last minutes. That crooked [treatment center] will bill for peeing in a cup for about $ 1,500 per client, bill another $ 250 for the group session, bill $ 150 bucks for the massage therapy and another $ 125 for the acupuncture session. After the group session ends, they all leave in the white van and then the next druggy buggy pulls up.”

Woods paused for breath: “That’s insurance fraud.”

***

Fraud is so endemic in Palm Beach County’s billion-dollar-a-year drug treatment industry that in 2015 health insurance provider Cigna pulled out of the Obamacare marketplace in Florida, citing overbilling for urine tests by drug treatment centers as the reason. Cigna is suing Sky Technology, a Texas-based firm that runs a string of drug-testing labs in South Florida to try and claw back some of the sky-high fees that the company has reimbursed.

The American Health Care Act, the Republicans’ Obamacare replacement bill that passed the House, a less “mean” version of which was recently unveiled in the Senate, allows states to cut coverage for addiction treatment, just at the time opioid overdose deaths have reached record levels across America. What’s bad news for shady sober home operators, who feed on a steady supply of insured clients, is even worse news for tens of thousands of heroin addicts who could be denied access to treatment that was previously covered under the Affordable Care Act if the bill passes in its current form.

“I hope our Senators ask themselves—what will happen to the Americans grappling with opioid addiction who suddenly lose their coverage?” former President Barack Obama posted recently on Facebook.

Trump tweeted his support for the Senate’s bill, but he declined to address it in detail, specifically whether he considered its Medicaid cuts at odds with his commitment to combat America’s opioid nightmare with more treatment. But he recently established the Commission on Combating Drug Addiction and the Opioid Crisis, headed by New Jersey Governor Chris Christie, whose mission is “to study the scope and effectiveness of the Federal response to drug addiction and the opioid crisis…and to make recommendations to the President for improving that response,” according to the executive order that Trump signed. The commission, which also includes Trump’s son-in-law and chief adviser Jared Kushner, met on June 16 for the first time. Few of the politicians and drug experts who testified were shy about voicing their opposition to the Republican’s attempt to repeal and replace Obamacare, especially the deep cuts to Medicaid, the biggest payer of addiction treatment in America. North Carolina governor Roy Cooper—a Democrat who sits on the commission and whose state has seen a near five-fold increase in fatal heroin overdoses since 2010—pointedly complained: “If we make it harder for people to get health care coverage, it’s going to make this crisis worse.”

But even the owners of reputable sober homes—and there are some—question the unfettered dollars that Obamacare funneled toward treatment. Tim Schnellenberger, who owns Healing Properties Sober Living in Delray Beach, says the Affordable Care Act not only provided a perverse incentive for corrupt sober home owners to keep their clients high so as to continue fleecing the insurance companies, it also inadvertently encouraged recovering addicts to relapse. And the more they relapsed, the longer they got to prolong what many of them regard as an extended spring break.

“You’ve got kids who come down here from up north who think their parent’s insurance card is a credit card,” he told me. “They’re the kids I don’t want because they’re not here to get clean, they’re here to have a vacation.”

Recently, Schnellenberger—who Marc Woods described as “one of the good guys”—gave me a tour of his facility, which caters to men only. It was the beginning of the hurricane season, and dark clouds loomed in the sky above. Compared to high-end sober homes, some of which cost as much as $ 20,000 a month and feature swimming pools, jacuzzis and saunas, the accommodations were clean but spartan, consisting of low-slung barracks-like bungalows surrounding a courtyard with wooden picnic tables. Schnellenberger charges $ 800 a month to share a bedroom. Stay clean long enough and residents can graduate to a private room.

Well-run sober homes like Schnellenberger’s are highly structured environments with strict curfews and a zero-tolerance policy for drugs and alcohol. On-site behavioral technicians supervise the residents to make sure the rules are enforced.

“I have to kick kids out sometimes because they bring drugs on to the property,” he said. “I don’t let anybody live here who has hot urine.”

A club kid-turned-realtor, the soft-spoken Schnellenberger is a recovering addict himself. He opened Healing Properties Sober Living in 2002 as a halfway house with a mere five beds. Since then, he’s expanded his sober home to include treatment facility. In the intervening years, Schnellenberger has witnessed first-hand the changing face of drug addiction in America.

“When I first started, my demographic was 25-35, guys with kids and good jobs who were addicted to alcohol, cocaine or heroin,” he said. “Now it’s kids from 18-22, almost exclusively heroin addicts. So basically, I have to teach these kids life skills, how to shop, how to make their beds, how to do laundry, all the stuff their parents used to do for them.”

By contrast, badly run sober homes are often little more than flop houses for junkies. The worst of the worst were the notorious residences run by Kenneth Chatman, an ex-convict who owned a number of sober homes in Lake Worth and West Palm Beach. After his arrest last year, it came out that Chatman was not only taking bribes from outpatient treatment facilities, he was also supplying heroin to female clients and then selling them as prostitutes. One young woman wrote a letter to the judge in which she described being kidnapped off the street by Chatman, taken to one of his sober homes where she was drugged with an unknown sedative, tied to a bed, and then repeatedly raped by a parade of strangers. Last month, Kenneth Chatman was sentenced to 27 and a half years in federal prison after pleading guilty to patient brokering, money laundering and human trafficking.

Chatman’s sentencing comes amidst a major crack-down on corrupt sober homes in Palm Beach County, at the same time America is going through its worst heroin crisis since the 1970’s. In collaboration with the Federal Bureau of Investigation, the Palm Beach County Sober Homes Task Force has so far arrested 27 owners and employees in the last ten months on charges of body brokering and other crimes. In May, after months of criticism for his tardy response, Florida governor Rick Scott finally declared the state’s opioid crisis a public health emergency, freeing up $ 27million of federal grant money from the Department of Health and Human Services to combat the crisis.

“In politics, if you admit there’s a problem, it’s up to you to solve it,” said Justin Kunzelman, a harm reduction advocate who co-founded Rebel Recovery, a local non-profit dedicated to minimizing the negative effects of drug use even if addicts don’t quit their habit. “It’s easier to stick your head in the sand. But the damage caused by heroin in Florida is so undeniable, Rick Scott can’t ignore it anymore.

The real solution to Palm Beach County’s sober homes problem is not just to shut down the bad ones or more federal dollars to combat the heroin crisis in the state, but to cut off the blight at its source by stemming the flow of out-of-state addicts, said Kunzelman.

“We’re overburdened with the rest of the nation’s drug addicts,” Kunzelman said. “I don’t have a problem with sober homes as long as they’re serving the local community. The services that are meant for our local kids are over-used by addicts who are not from here. I need them to go home so we can take care of our own kids, who are dying.”

He added: “Sorry, America, we’re full down here.”

Additional reporting by Mira Silver.

Frank Owen is the author of No Speed Limit: The Highs and Lows of Meth and Clubland: The Fabulous Rise and Murderous Fall of Club Culture. His work has appeared in Playboy, the New York Times, Washington Post and the Village Voice. Additional reporting by Mira Silver.

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