Rehab Mogul Accused of Sexual Assault, Massive Embezzlement Scheme

Rehab Mogul Accused of Sexual Assault, Massive Embezzlement Scheme

By Zachary Siegel and Allison McCabe 11/14/16

Several days ago the Los Angeles County Sheriff’s Department released an advisory asking for the public’s help in finding other potential victims of Bathum’s.

Image: 
Chris Bathum wearing a tee-shirt saying "Rehab Mogul" and giving the finger to the camera.
Image courtesy of LA Weekly

A self-described California “rehab mogul” and his colleague were arrested on suspicion of skimming $176 million from the insurance policies of clients trying to recover from addiction, authorities said.

A felony complaint filed against Christopher Bathum and Kristen Wallace listed 50 counts ranging from money laundering to identity theft. Bathum stepped down as operator of Community Recovery Los Angeles last June, at which time the company changed its name to “Commonwealth Global.” According to a Squarespace page for the company, Kristen Wallace is the CEO.

The defendants, Bathum and Wallace, are accused of using Community Recovery Los Angeles—a network of some 20 outpatient clinics and sober living homes also known as CRLA—for their own financial gain, according to the complaint.

The duo is accused of stealing their clients' identities to buy health insurance policies without their knowledge, according to the California Department of Insurance. Bathum and Wallace continued to bill insurance companies for recovery services long after the treatments were completed, the department alleged in a press release.

In addition, Bathum was arrested on suspicion of sexually assaulting multiple women clients.

In most states, treatment centers require licenses, staff and physicians to operate. But sober homes and outpatient clinics in California—the type Bathum ran—have few regulatory checks, creating a climate for potential bad actors to profit on the backs of suffering clients.

“Bathum and Wallace's alleged conspiracy victimized hundreds of people addicted to drugs and alcohol by keeping them in a never-ending cycle of treatment, addiction, and fraud — all the while lining their pockets with millions of dollars from allegedly fraudulent insurance claims,” said Insurance Commissioner Dave Jones in a news release.

Along with numerous insurance companies listed in the complaint, there are also many former CRLA and Commonwealth clients.

Bathum and CRLA were the subject of a scathing expose aired by ABC’s 20/20. In that episode a woman named Amanda Jester, who appears in the complaint, alleged Bathum sexually assaulted her in a sweat lodge.

“I have no credit card, no money, no cellphone — I felt like I had no choice,” Jester said during a 20/20 interview.

Jester and two other women filed a lawsuit earlier this year alleging:

Bathum specializes in targeting young women who have suffered childhood traumas or sexual abuse and who are particularly vulnerable. Bathum used offers of "scholarships," "internships" and other rewards and inducements to young women to encourage them to trust Bathum and to permit Bathum and CRLA to misappropriate insurance money by billing for services which Bathum masqueraded as "treatment" but which involved him engaging in sexual and drug abuse toward Plaintiffs and other clients.

Several days ago the Los Angeles County Sheriff’s Department released an advisory asking for the public’s help in finding other potential victims of Bathum’s. “Detectives believe it is possible other former clients of Mr. Bathum were sexually assaulted.”

Bail is set for both defendants at $2,000,000. If convicted, they face up to 35 years apiece in prison. They are expected to be arraigned today.

Bathum and Wallace vigorously deny any wrongdoing.

Anyone with information about Christopher Bathum should contact the Los Angeles County Sheriff's Department's Special Victims Bureau at 877-710-5273. Anonymous tips can be left via Crime Stoppers at 800-222-8477, or online via lacrimestoppers.org.

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