Sober-home fraud scheme doctor receives an 8-year term Judge: Dr. Mark Agresti enabled $31.3 million insurance swindle
Insurance Newsnet, May 28, 2022
With his wife and 90-year-old mother looking on, a once-respected Palm Beach County psychiatrist was handcuffed and led from a federal courtroom on Friday to begin serving an eight-year prison sentence for exploiting people struggling with addiction.
Dr. Mark Agresti's quick transformation from free man to federal prisoner was unusual. Typically, white-collar criminals are allowed to remain free, get their affairs in order and then report to prison. But U.S. District Judge Rodolfo Ruiz II rejected a request from Agresti's attorneys for the typical treatment.
"The time has come for him to serve his sentence," Ruiz said before hastily leaving the courtroom after a two-hour hearing.
Already, Ruiz had given the 59-year-old Palm Beach resident a sizable gift. The eight-year sentence he imposed was seven years less than the minimum 15 1/2-year sentence Agresti could have received after being convicted of 12 charges in connection with a $31.3 million health insurance fraud scheme.
Ruiz said the case was a difficult one. Agresti, the one-time director of psychiatry at the former Columbia Hospital in West Palm Beach, spent years building his career and reputation as a caring psychiatrist. Letters written by former patients credited him with pulling them out of devastating depression and saving their lives.
But instead of continuing to help people beat their addictions and fight their demons, Agresti instead joined forces with unscrupulous sober home owner Kenneth Bailynson, who testified against Agresti during a three-week trial in February.
While Bailynson was the mastermind of the scheme, Agresti was the lynchpin, Ruiz said.
"Dr. Agresti didn't have the nefarious approach that Bailynson had, but it couldn't have happened without him," Ruiz said. "Even Bailynson acknowledged that without a doctor willing to sign off on the standing orders, this scheme would not work."
At Bailynson's direction, Agresti ordered hundreds of expensive urine tests for insured residents of a sober home Bailynson operated out of a rundown apartment complex on Georgia Avenue in West Palm Beach, federal prosecutors said.
Instead of a simple test, Agresti ordered labs to screen the samples for 80 different types of drugs, most of which were not addictive. He did so knowing that instead of receiving about $300 for each test, insurance companies would pay at least $1,500, prosecutors said.
By testing residents at least five times a week for drugs that were not likely to be in their systems, the money piled up.
Agresti also worked as medical director, ordering similar tests, at other sober homes in the county, said Assistant U.S. Attorney James Hayes.
During the trial, an unrepentant Bailynson bragged about his business acumen. Had the FBI not raided his sober home in 2014 as part of a crackdown on the county's illicit drug treatment industry, he said he would have made $2 billion from the additional homes and labs he planned to open throughout the state.
He scoffed at Agresti's claims of innocence.
"It was always about the money and for Dr. Agresti, it was all about the money, too," he testified.
It took a jury less than three hours to convict Agresti.
On Friday, Agresti apologized. He acknowledged that he let down his patients and his family.
"I accept full and complete responsibility for my conduct," he told Ruiz. "There is really no excuse for my actions. ... I am ashamed."
While the Florida Department of Health website shows his medical license is still active, he said he closed his practice and realizes he will never again be allowed to work as a doctor.
His attorneys pleaded for leniency. Defense attorney Greg Rosenfeld pointed out that Bailynson was handed a six-year sentence and was allowed to remain free until June 22. Even though Bailynson orchestrated the scheme and made at least $15 million from it, he was rewarded for helping prosecutors bring down Agresti and others.
Rosenfeld questioned whether it was "good public policy" to let the instigators of far-reaching crimes to get off easy by turning on those they had lured into their schemes.
While acknowledging the breaks Bailynson had been given in exchange for his cooperation, Ruiz said Agresti was in a position to know better than to team up with the brash and hot-tempered New Jersey accountant.
Agresti, he said, abused the public trust by using his medical license to perpetuate a fraud. Further, he did so by taking advantage of people who were trying to beat their addictions.
"Criminals who have education and training that enable them to live comfortably are more, rather than less, culpable than their poor and destitute brethren in crime," he said.
While he acknowledged that it was unlikely Agresti would ever again engage in such activity, Ruiz said he had to send a message to other doctors and professionals. Studies have shown that those who commit economic crimes are more likely to weigh the consequences of their actions than those who commit crimes of passion, he said. Others need to know that white-collar crimes will be taken seriously.
After Agresti had been whisked from the courtroom by federal agents, Rosenfeld said he planned to appeal the physician's conviction. "Dr. Agresti has saved hundreds of thousands of lives," he said.
In addition to the appeal, Ruiz has to decide how much to order Bailynson and Agresti to pay in restitution to insurance companies. A hearing is to be held on June 22.