UPDATE, Nov. 14 at 3 p.m.: Christopher Bathum has been charged with forcible rape, rape of an intoxicated person and more than 40 other charges relating to sexual misconduct and giving out illegal drugs. If convicted, he faces up to life in prison. See below. (Original post published Nov. 11.)
After more than a year of investigations by the FBI, Sheriff's Department, LAPD, California Department of Health and insurance companies, Chris Bathum — aka the Rehab Mogul — has been arrested on multiple charges of fraud, money laundering, grand theft and sexual assault.
Bathum is the owner and former operator of the company previously known as Community Recovery Los Angeles (CRLA), a chain of more than 20 sober-living houses and outpatient clinics dedicated to treating alcoholism and drug addiction. Bathum has been accused by multiple female clients of giving them drugs in exchange for sex and in some cases of sexually assaulting them. He and his facility also have been accused of engaging in numerous acts of insurance fraud.
L.A. Weekly first wrote about Bathum in December 2015. Since then, five former female clients have come forward and accused him of sexual harassment, sexual assault and rape. Some of those accusations were further laid out in an episode of ABC's 20/20, which aired in June. Soon after that, Bathum was arrested on a minor drug charge.
A lawsuit filed by three former female CRLA clients alleged Bathum “isolated and targeted [the] plaintiffs and other women to prey on their addictions by using and supplying drugs around them, moving them around to isolated hotel rooms and remote locations, encouraging them to use drugs with him, and sexually molesting them when they were high and/or incapable of consent.”
In June, Bathum publicly stepped down as head of his own company, which then changed its name to Commonwealth Global. But Bathum retained ownership of the company and, according to former employees, maintained a presence there.
On Thursday morning, officers from the California Department of Insurance Fraud Division raided 15 sober-living houses under the Commonwealth umbrella throughout Los Angeles and Orange counties. L.A. Weekly obtained screenshots of security camera footage showing the raids from two of those sober-living homes:
L.A. County Sheriff's Deputies arrested Bathum on several counts of sexual assault, according to a department press release.
According to the release, “Detectives from the Sheriff’s Department Special Victims Bureau are seeking the public’s assistance in identifying potential additional victims in a sexual-assault case involving Mr. Christopher Bathum.”
In addition to sexual assault, Bathum is being charged, by the State of California, with more than 50 counts of fraud, grand theft and money laundering.
Authorities also arrested Kirsten Wallace, president of Commonwealth Recovery. She, too, is being charged with more than 50 counts of fraud, grand theft and money laundering.
“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,” state insurance commissioner Dave Jones said in a press release.
The release goes on to state:
Bathum and Wallace billed health insurance companies more than $176 million in fraudulent claims. The insurers, including Anthem Blue Cross, Blue Shield, Cigna, Health Net and Humana, paid approximately $44 million in total before discovering the suspected fraud and stopping claim payments to CRLA.
In the statement, Jones also said: “This is likely the first wave of indictments and charges in an ongoing investigation into one of the largest health insurance fraud cases in California.”
If convicted, Bathum and Wallace face up to 35 years apiece in prison. They are expected to be arraigned on Monday.
Deb Herzog, a former prosecutor for the U.S. Attorney's office, was an investigator for the insurance company Anthem until late last year. She's retired now, living in Montana and working as a substitute teacher. She spent her last year at Anthem investigating Chris Bathum. She calls him “one of the most despicable criminals I have ever come across.”
“He preyed upon one of the most vulnerable classes of people that exist, and that’s a drug addict,” Herzog says. “Unfortunately, this is one of hundreds of situations like this, where there are amoral people who run disreputable programs.”
The Bathum saga cast a light on an industry in desperate need of oversight and regulation, according to Herzog and multiple other industry experts. Sober-living homes currently do not need a license to operate in California, nor do outpatient clinics.
Herzog adds: “The fact that this industry is not regulated is criminal in itself, as far as I’m concerned.”
UPDATE, Nov. 14 at 3 p.m.: In addition to being charged with 50 counts of fraud, grand theft and money laundering, Bathum has also been charged with one count each of forcible rape and rape of an intoxicated person, as well as three counts of sexual penetration by a foreign object, two counts of forcible oral copulation, 27 counts of sexual exploitation and 12 counts of furnishing controlled substances.
According to a press release by the L.A. County District Attorney’s office:
“Between 2013 and 2016, Bathum is accused of sexually assaulting female patients, and in some cases, providing them with drugs as they struggled to overcome their addiction. Several of the assaults happened at the facilities that he ran, prosecutors allege.
“The ages of the victims range from their 20s to their early 30s.”
Bathum and Wallace each face up to 53 years in state prison if convicted of the healthcare fraud charges. Bathum faces up to life in prison for the sexual assault charges.
UPDATE, Nov. 14 at 5:15 p.m.: Bathum and Wallace both pled not guilty to all counts at their arraignment today. Bathum’s bail is currently set at $9.6 million; Wallace’s bail is $2 million.