Dr. Howard Oliver was once a prolific rehab doctor, signing off on taxpayer-funded drug addiction treatment for more than 1,500 people without ever seeing most of them – because, as he said, even “a brick can undergo counseling.”
He was a key figure in a cesspool of fraud uncovered by The Center for Investigative Reporting and CNN in an investigation that documented rampant cheating and a glaring lack of state oversight in California’s rehab system for the poor.
Now, Oliver’s in prison, sentenced to serve more than seven years.
Fraud is rampant in California’s drug rehabilitation program for the poor, with clinics cheating taxpayers by billing for counseling that never happened.
All told, the California attorney general’s office has charged 144 people associated with 49 rehab clinics, resulting in 96 convictions and more than $4 million in restitution ordered so far, according to agency records. A few cases are still pending.
The 96 convictions don’t include any patients. Almost all were owners or employees of rehab clinics. Several of the clinic operators featured in the series have now been prosecuted and convicted. The agency declined to comment.
The convictions bar clinic operators and staff indefinitely from billing Medi-Cal, the state’s Medicaid system, though they can apply to be reinstated, according to the state Department of Health Care Services.
Oliver served as medical director for several of the clinics caught up in the sweep, but one in particular led to his downfall. Prosecutors said Oliver helped West Coast Counseling Center in Los Angeles steal $2.8 million from Medi-Cal.
Here’s how the scheme worked: The clinic bribed people with free bus passes and gift cards in exchange for copies of their Medi-Cal ID cards, according to court records. Clinic staff would then use those ID cards to manufacture fake patient charts, counseling notes and sign-in sheets for counseling sessions that never happened. Oliver signed off on all the treatment, even after staff told him repeatedly that he was approving counseling for fake patients, prosecutors said. The clinic billed the government for it all, raking in millions, instead of providing actual services to real people struggling with addiction.
In addition to Oliver, three other West Coast Counseling leaders were convicted.
“The leadership of West Coast Counseling was trusted to provide vital services to people in their community who were battling addiction,” Attorney General Rob Bonta said in a statement announcing Oliver’s sentencing in December. “Instead, they set up the facility to steal taxpayer money and diverted millions from state resources to their own gain.”
Oliver’s attorney in that case, Stephen Bolinger, said Oliver disputed that anyone had told him the clinic was billing for “ghost patients” and is appealing the conviction.
“His stance is that he was basically made a patsy,” Bolinger said. “He trusted people he shouldn’t have trusted.”
The CIR/CNN investigation, based on thousands of pages of government records, dozens of interviews and undercover surveillance, showed that the state of California had been pouring tens of millions of dollars into dozens of clinics despite blatant signs of fraud. The state allowed people who should have been barred from the system – including a man convicted of organized crime – to operate crooked taxpayer-funded clinics. Some clinics fabricated counseling notes and billed for ghost clients who never came in. Others padded client rolls by diagnosing teenagers with addictions they didn’t have or taking advantage of mentally ill residents of board-and-care homes, luring them in with cigarettes and cash.
Even when regulators caught the clinics cheating, the government kept doling out public funds.
When state officials declined interview requests, CNN approached the secretary of California’s Health and Human Services Agency outside a public meeting in June 2013, where she tried to flee from reporters and called for security. Soon after, the state launched a crackdown, which led to the convictions.
Back then, Oliver served as medical director to many of the suspect rehab clinics, despite a history of run-ins with regulators. When reporters approached Oliver about his role, he didn’t shy away. Oliver invited reporters to tour West Coast Counseling Center, which he considered a good clinic. There, when asked how he approved treatment for patients without seeing them, some of whom may not even exist, Oliver said, “Well, I don’t know that they don’t exist.”
Eight years after CIR and CNN exposed his practices, a jury convicted Oliver of felony Medi-Cal fraud, conspiracy, grand theft and tax evasion, among other charges. In December, he was sentenced to seven years and eight months in state prison. His medical license was suspended.
He’ll be eligible for parole in 2025.