LOS ANGELES — The co-owner of a company that operated drug and alcohol treatment centers in Southern California and Colorado pleaded guilty Wednesday to all 46 felony counts against her involving a $175 million health-care billing scheme.
Superior Court Judge Charlaine Olmedo immediately sentenced Kirsten Wallace, 44, to 11 years in state prison following her plea to 28 counts of money laundering, seven counts of grand theft of personal property, six counts of identity theft and five counts of insurance fraud, according to the Los Angeles County District Attorney’s Office.
Wallace — who co-owned Community Recovery of Los Angeles with co-defendant Christopher Bathum — is awaiting a restitution hearing in a downtown Los Angeles courtroom April 17.
Her plea comes less than a month after Bathum, who is awaiting trial on the same 46 counts in the fraud case, was convicted in a separate case of 31 counts, including the sexual assault or exploitation of seven patients and offering controlled substances. Jurors acquitted Bathum, 56, of 12 similar counts and deadlocked on three other charges.
Wallace and Bathum allegedly fraudulently billed an estimated $175 million between June 2012 and December 2015, with about $44 million being paid out by five insurance companies, according to Deputy District Attorney Shaun Gipson.
The two allegedly obtained multiple health care insurance policies for their clients by using their personal identifying information and falsifying the clients’ circumstances to get the policies for patients who were unaware that policies had been issued in their names, according to the prosecutor.
The two also allegedly billed for services involving former patients after their treatment ended while the clients were working at Community Recovery of Los Angeles, according to the prosecutor.
After Wallace and Bathum were arrested in 2016, State Insurance Commissioner Dave Jones called the case “one of the largest health insurance fraud cases in California” and said the arrests coincided with the execution of search warrants at 15 locations throughout Los Angeles and Orange counties.
Bathum is due back in court April 17 for a pretrial hearing on the fraud case, in which he could face up to 45 years and four months in state prison if convicted as charged, according to the District Attorney’s Office.
A sentencing date is also scheduled to be set then for Bathum’s other case, in which he is facing a maximum possible sentence of about 65 years in state prison and lifetime sex offender registration.
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