Multi-Million Dollar Fines Insufficient to Curb Fraud & Patient Sexual & Other Abuses in For-Profit Behavioral Health Industry

There should be more effective and accountable oversight for the for-profit behavioral industry. This requires much stronger penalties than a few million dollars in fines should systemic patient abuse and/or fraud be established. Increased safeguards are needed including jail penalties.

By Jan Eastgate
President CCHR International
The Mental Health Industry Watchdog
August 27, 2019

Universal Health Services (UHS), which owns a chain of for-profit psychiatric facilities in the U.S. and the United Kingdom, recently agreed to pay $127 million to settle a U.S. Department of Justice (DOJ) civil probe into alleged fraud. The settlement is subject to approval.[1] But the proposed settlement is insufficient to send an adequate warning to other for-profit behavioral facilities accused of patient abuse and healthcare fraud.

Media reports on the UHS payment said the company “has been dogged by the DOJ investigation into false claims allegedly submitted by its behavioral health facilities.” While under investigation, adverse reports persisted and in 2017, Senator Charles Grassley called for a Federal probe into UHS’s psychiatric hospital sector stating, “The continued reporting on UHS facilities shows a disturbing trend of behavior,” pointing to the then recent allegations that “cause significant concern about whether UHS has the ability to adequately manage the facilities under its control.”[2]

Another psychiatric hospital chain, Acadia Healthcare, was also under Federal investigation.  Modern Healthcare reported, “The federal government alleged that a subsidiary [CRC Health, L.L.C.] of the publicly traded Acadia Healthcare Co., which owns seven drug addiction treatment centers in West Virginia, defrauded Medicaid over several years through false claims for laboratory tests related to the opioid epidemic.”[3] In May 2019, Acadia agreed to pay the federal government $17 million to settle allegations it defrauded Medicaid in West Virginia. [4]

Former U.S. Rep. Bart Stupak, writing in The Hill in 2017, pointed to the waste, fraud and abuse of government funds associated with the treatment of opioid addiction. The examples he used of potential fraud were psychiatric chains: Psychiatric Solutions Inc. (PSI), bought by UHS, with PSI executives moving to take over Acadia Healthcare. Rep. Stupak said PSI put “profit ahead of care and was surely a questionable recipient of taxpayer funds,” further stating that as Chairman of the House Energy and Commerce Committee’s Oversight Subcommittee, “I would have immediately launched an investigation into Acadia, or at a minimum, would have encouraged the Centers for Medicare and Medicaid Services to review the Medicare and Medicaid charges made by UHS and Acadia.”[5]

Two years later Acadia closed 10 of its childcare facilities in Arkansas, claiming budgetary reasons, but this followed manslaughter charges being filed against several of its staff for leaving a five-year-old boy strapped in a van that reached temperatures of 141-degrees that killed him.[6]

Another behavioral chain, Sundance Behavioral Healthcare System (SAS Healthcare Inc.), also closed three of its facilities in Texas in December of 2018. SAS Healthcare Inc. was indicted on nine criminal counts of violating the Texas Mental Health Code, accused of holding four patients involuntarily and illegally at its Arlington facility.[7]

For decades Citizens Commission on Human Rights (CCHR) has investigated allegations of abuse and potential fraud in for-profit psychiatric facilities. Since 2015 alone, over 18,000 official complaints have been filed with Federal and State authorities and legislators. A CCHR International report on the issue published in December 2018 highlighted how companies like UHS and Acadia Healthcare get billions of dollars in Medicaid and Medicare funding.

Allegations of sexual abuse of patients in the for-profit behavioral hospital industry are rife.  Last year, UHS closed its Timberlawn psychiatric hospital in Texas in the wake of allegations that a 13-year-old girl was raped at the facility.[8]

In April 2019, Acadia-owned Desert Hills of New Mexico was “shut down amid egregious abuse allegations, multiple lawsuits and losing its certification from state regulators,” as reported by Nashville Post. Seven lawsuits had been filed against the facility and its parent company alleging the company failed to protect its clients from physical and sexual abuse from its workers and other patients. “The suits cite internal fight clubs instigated by facility staff members, sex between staff and young patients, the unchecked spread of HIV among patients and excessive use of restraints on children—more than 30 times in 60 days, according to filings.”[9]

Sequel: More Psychiatric Abuse

Sequel Youth and Family Services (Sequel), which is privately owned and operates 44 behavioral healthcare programs in about 20 states,[10] has also come under scrutiny over patient sexual abuse allegations regarding some of its facilities. There are serious concerns in that there are 60 Oregon foster youth placed in out-of-state facilities, the majority of which are in facilities owned by Sequel.[11] According to its 2017 report to investors, it had 2,600 residential bed capacity and over 6,500 community based programs. Services focus on at risk adolescents, aged 12-18.[12]

Sequel reported in its investor presentation that youth behavioral health was worth $11 billion while there is an estimated $35 billion market for substance use disorder.

Allegations against Sequel facilities include:

  • In July 23, 2019, WBNS 10 News in Columbus, Ohio reported its investigation of “Sequel Pomegranate,” the parent company of this is Sequel Youth and Family Services. Staffers and teens were found to have been exposed to repeated incidents of violence and sexual abuse. The investigation determined there “have been allegations of violence and sexual abuse at psychiatric and behavioral health facilities across the U.S.” The state Department of Mental Health and Addiction Services claimed on inspection, the environment was “clean, safe, therapeutic, and consistent with our regulations.”[13]
  • May 2019: Utah’s Department of Human Services threatened the license of a Sequel-owned facility over “understaffing” that had “negatively impacted the program’s ability to address violence and sexual misconduct within the program.” In 2016, just five months prior to Sequel’s purchase of Mount Pleasant Academy in Central Utah, police investigated allegations of sexual abuse and obstruction of justice at the facility.[14] ProPublica had investigated and reported allegations of sexual abuses at the facility in 2016 after police raided it in response to an employee reported sex among residents and misconduct by staff.[15]  The state of Oregon was sending foster care children to this facility.[16] On July 16, 2019, Sequel announced that it was closing Mount Pleasant Academy in Central Utah, claiming it would “repurpose” it.[17]
  • January 2018: A 38-year-old staffer at Northern Illinois Academy was charged with three counts of criminal sexual assault on an adolescent, over whom he held a position of trust or authority. The staffer pleaded guilty and was sentenced to 10 years in prison.[18]
  • August 2018: Amanda Renee McCool, a staffer at Lakeside Academy in Kansas was arrested on three counts of unlawful sexual relations involving a juvenile. The facility is a residential youth center that provides programming for boys ages 13 and older.[19] The alleged crimes involved a 16-year-old boy and took place at Lakeside Academy.[20]
  • July 2017: Police arrested a youth counselor with Sequel TSI of Madison, Alabama, on charges that she engaged in sex with a student less than 19 years of age. She was indicted in September 2018 for sex acts involving multiple students under the age of 19.[21]
  • In February 2019, the Tennessee Department of Children’s Services (DCS) had removed 18 youth from Sequel’s Kingston Academy and announced that it had suspended admissions to the facility. DCS’ concern was the Academy’s physical condition.[22]

Clarinda Academy, Iowa

  • 2018: In Iowa, a youth advocacy group from Washington State stopped sending children to Sequel’s Clarinda Academy after concerns were raised about the use of restraints. Sequel has a management and administrative contract with Clarinda.[23] Disability Rights Washington, an advocacy group, issued a scathing report on the facility in October 2018, saying foster youth placed there “have suffered additional emotional and psychological harm.” The report also argued for the state of Washington to end the practice of sending hard-to-place foster youth, many with acute mental health and behavioral issues, to out-of-state facilities.[24]
  • An NBC News investigation in March 2019 reported that some of the former residents of Clarinda claimed they suffered physical and sexual abuse.[25]
  • In February 2018, mother of a 15-year-old student at Iowa’s Clarinda Academy told police that a staff member assaulted her daughter. The girl fell and hit her face on the floor, causing bruising, after the facility’s director tried to restrain her, according to a police report. [26]
  • August 2017: A 37-year-old Clarinda staffer was accused of forcible sodomy and lascivious conduct with a minor.[27]
  • 2016: Antonio Aranda, a 40-year-old night staff member at Clarinda was arrested and charged with three felony sex charges regarding a 17-year-old student. The staffer pleaded guilty to sexual misconduct and was sentenced to ten years’ probation.[28] As NBC News reported, the victim filed a lawsuit against the facility, contending that it acted negligently by hiring Aranda because he had been previously convicted of a felony. Sequel told NBC News that Aranda had disclosed a conviction for felony petty theft in California—a misdemeanor in Iowa—on his employment application, and that the conviction occurred nearly 15 years before he applied to work at the facility. Former students told NBC News that some staff improperly used physical restraints to control children, sometimes to the point of injury. Those injuries, according to interviews and documents obtained from state agencies, include broken bones, bruises, and loss of consciousness. One student alleged that a male staff member sexually abused her during a physical restraint.[29]

After a report showed that Clarinda was causing harm to the youth who were placed there, Washington State stopped sending children in their custody to the facility.[30] Woodward Academy, also owned by Sequel in Iowa also came under scrutiny when the Des Moines Register investigated both schools.[31]  In interviews with students, in an investigation by Disability Rights Washington in early 2018, there were consistent allegations of verbal and physical abuse.[32]

Red Rock Canyon School (RRCS), St. George, Utah

Red Rock Canyon School (RRCS) in St. George, Utah was already in trouble before Sequel acquired it and three other facilities in Iowa in 2016. In 2012, Diarra Niccole Fields, a staffer from RRCS was arrested and charged with sexually abusing three male students.[33] Fields pleaded guilty to felony forcible sexual abuse and was sentenced to 210 days in jail and 36 months supervised probation.[34]

Recent controversy over RRCS led to Sequel’s decision to close the facility.  On April 28, 2019, a two-hour riot erupted at the facility, with police, medical and SWAT forced to respond. 25 students were injured, of which five were transported to the hospital for more serious treatment, including one student who required staples to close a gash on the back of his head.[36] The Salt Lake Tribune reported that, since 2017, the police had been called to the St. George School 72 times and 24 staffers were investigated for child abuse.[37]

The state Department of Human Services found the school to be in violation of more than 10 rules and regulations following an investigation prompted by a “riot” reported in April.  According to the DHS, the facility had not provided the required ratio of staff members to students and allowed some staff members’ background screenings to expire, among other violations.[38]

The state of Oregon was sending foster care children to this facility, as did Washington State, but Washington removed their children in light of the allegations.[39]

In May, Oregon Child Welfare officials visited RRCS, which is in a former hotel, and issued a positive report. However, “as soon as the Oregon assessment was issued, a much more damning report came to light. It highlighted severe understaffing at Red Rock Canyon, which it said led to violence, sexual misconduct and both staff and residents feeling unsafe,” reported OBP radio.[40]

In July, Sequel announced it was closing the facility after the reports of sexual abuse and violence between students and staffers surfaced.[41]

It was not the first riot on a facility contracted with Sequel.  In September 2018, a riot broke out at Palm Beach Youth Academy in Florida. Six boys, one of whom had turned 18 in June, were arrested on charges of battery on detention-center staff.  The facility houses boys ages 15 to 21 who are considered to by the Florida Department of Juvenile Justice to be high-risk and in need either of mental-health or substance-abuse treatment. The facility, previously called the Palm Beach County Juvenile Correctional Facility, switched hands in 2016 after a slew of allegations involving deplorable living conditions, sexual abuse and violence surfaced.[42]


Sequel operates about nine facilities in Florida. In St. Petersburg and surrounding areas, offers “Foster homes to provide services for sibling groups, children with severe mental health disorders and/or severe behavioral problems.”[43]

  • July 2019: the Florida Department of Juvenile Justice issued a statement that it was removing all youth immediately from Union Juvenile Residential Facility, which was contracted with Sequel, due to a serious incident and the failure to provide a safe and secure environment for youths. The 22 boys at the facility were moved temporarily to four North Florida detention centers. The Union County Sheriff’s Office said deputies were called out to facility in Raiford by the Florida Department of Children and Families on July 10. 4 News Gainesville reported that a child battery investigation closed the facility.[44]
  • On 12 February 2015, a Marion Youth Academy Facility Administrator reported an incident to the Department of Juvenile Justice (DJJ) Office of Inspector General (OIG) concerning a Youth Counselor who struck a resident on his head with a portable radio when the youth refused to stop throwing paper. The counselor continued hitting the youth with his fist until another youth stopped him and staff intervened. A youth sustained a laceration to his head requiring three staples to close the wound. The counselor, Curtis Thornton, was terminated by Marion.[45] The facility was owned by Youth International Services at the time. Thornton was charged with Aggravated Child Abuse.[46] Sheriff’s detectives described what happened next—which was captured on video: “He suddenly and without warning turned around and struck the victim full force, knocking him backward out of his chair, with what appeared to be a punch to the head. As the victim lay on the ground, [Thornton] straddled the victim and began striking him repeatedly until other juveniles separated the two. “For his first strike, Thorton wielded a portable radio, which broke into pieces. The video recorded “a minimum” of seven additional blows, a report said. The 16-year-old fainted as blood poured from the left side of his forehead. [47]

Since 2015, CCHR International and its Florida Chapter have worked together investigating and exposing alleged abuses in for-profit behavioral chains that have been accused of abused the Baker Act to involuntarily commit patients and detained them for their insurance.[48] UHS has some 16 behavioral facilities in Florida,[49] while Acadia has at least five mental health and substance abuse facilities.[50]

Allegations have also been made about patient sexual abuse. UHS closed its National Deaf Academy in 2014 following scrutiny of abuses reported to police, including three alleging sexual abuse. Allegations also included a patient being punched by a staff member.[51]

In 2017, UHS’s Okaloosa Youth Development Center in Crestview, Florida was closed after state authorities terminated its contract over serious deficiencies that potentially could threaten the health and safety of the youth placed at the program.[52]

In 2012, UHS’ Milton Girls Juvenile Residential Facility in Florida was closed following incidents of a security video showing a staff member slamming a girl against a wall and a staff member arrested for sexually abusing six girls at the facility.[53]  The mental health technician was sentenced to 25 years prison.[54]

There should be more effective and accountable oversight for the for-profit behavioral industry. This requires much stronger penalties than a few million dollars in fines should systemic patient abuse and/or fraud be established. Increased safeguards are needed including jail penalties.

West Palm Beach County, Florida State Attorney Dave Aronberg’s comments last year mirror our concerns about the abuses being regularly uncovered in psychiatric-behavioral facilities: “This is an entire industry that’s been corrupted by easy money. Unscrupulous actors have taken advantage of well-intended federal law and a lack of any good law at the state level, to profit off people at the lowest stages of their lives.”[55]

Report psychiatric abuses here.


[1] Samantha Liss, “UHS to pay $127M in DOJ settlement, says criminal probe closed,” Healthcare Dive, 26 July 2016,

[2] “Sen. Chuck Grassley Calls For New Probe Into UHS,” BuzzFeed News, 18 Dec. 2017,

[3] “W.Va. opioid addiction centers to pay $17 million fraud settlement,” Modern Healthcare, 6 May 2019,

[4] “United States Attorney Announces $17 Million Healthcare Fraud Settlement,” Press Release, Attorney’s Office Southern District of West Virginia, 6 May 2019,

[5] Fmr Rep. Bart Stupak, “Eliminating fraud is key to adequate funding for opioid treatment,” The Hill, 13 July 2017,

[6] “5-year-old dies after being left in van at children’s health clinic,” WMC5 News, 12 Jun. 2017, “

[7] Deanna Boyd, “North Texas hospital corporation accused of holding patients illegally is indicted,” Star-Telegram, 15 Nov. 2018,

[8] Sue Ambrose, Sarah Mervosh, Miles Moffeit ,”Timberlawn psychiatric hospital to close Feb. 16 after safety violations,” 18 Jan. 2018, Dallas Morning News,; “Dallas police investigating sexual assault of 13-year-old girl at Timberlawn hospital,” Dallas Morning News, 13 Oct. 2017,

[9] Kara Hartnett, “Acadia facility closes amid abuse allegations,” Nashville Post, 5 Apr. 2019,

[10] “’They told me it was going to be a good place’: Allegations of abuse at home for at-risk kids,” NBC News, 26 Mar. 2019,

[11] “2nd Utah Facility Housing Oregon Foster Youth To Close,” OPB, 12 July 2019,



[14] Pat Reavy, “Police investigating allegations of unreported abuse at boys ranch,” Deseret News, 16 Mar 2016,

[15] “Yet Another Scandal Rocks Utah Home for Vulnerable Children: Police raided the home after an employee reported sex among residents and misconduct by staff,” ProPublica, 21 Mar. 2016, 

[16] “2nd Utah Facility Housing Oregon Foster Youth To Close,” OPB, 12 July 2019,

[17] “Second Utah facility for troubled teens to close in a month,” 2KUTV, 16 July 2019,

[18] “Mental health facility worker pleads guilty to assaulting child,” Daily Herald, 22 Feb 2019,; “Aurora residential facility employee charged with sex assault of minor staying at center,” Aurora Beacon-News, 9 Jan 2018,

[19] “Employee of facility for troubled youth arrested for sex crimes,” KTEN NBC 10, 22 Aug 2018,

[20] “She had sex with boy, 16, at Kansas home for at-risk youth and was arrested, cops say,” The Wichita Eagle, 22 Aug. 2018,

[21] Jonathan Grass, “Madison youth counselor charged with sex with students,” WAFF48, 21 Jul 2017,; “Former Counselor Re-Indicted On Student Sex Charges,” WAAY31 ABC, 8 Oct 2018,

[22] “DCS: 18 children removed from Kingston Academy in Roane County,” NBC 10 News, 22 Feb, 2019,

[23] “Violence, sexual abuse reported at other Sequel properties across the U.S.,” WBNS 10 News, 23 July 2019,

[24] “Report describes ‘abusive restraint practices’ for Washington foster youth sent out of state,” NW News Network, 17 Oct. 2018,

[25] “NBC News investigation looks at allegations of abuse at residential facility for at-risk kids,” NBC News, 26 Mar. 2019,

[26] “Police reports detail fights, sex crime at Iowa academy for troubled youth,” Des Moines Register, 26 Nov 2018,

[27] “Police reports detail fights, sex crime at Iowa academy for troubled youth,” Des Moines Register, 26 Nov 2018,

[28] “For-profit Iowa academy for troubled youth hired felon who raped student,” Des Moines Register, 28 Nov. 2018,

[29] “’They told me it was going to be a good place’: Allegations of abuse at home for at-risk kids,” NBC News, 26 Mar. 2019,

[30] “As Washington Pulls Foster Kids From Facility, Oregon Children Remain,” OPB, 4 Jun. 2019,

[31] “State probing abuse allegations at home for troubled youths,” Des Moines Register, 28 Nov. 2018,

[32] “Report: Washington foster kids abused at out-of-state group home,” Investigate West, 17 Oct. 2018,

[33] “Embattled company to close a second Utah treatment center for troubled teens,” The Salt Lake Tribune, 15 Jul. 2019,; “St. George man accused of sexual abuse of three teens,” Fox 13, 3 Aug 2012,

[34] “Former youth worker sentenced in sex abuse case,” St. George News, 5 June 2014,

[35] “Yet Another Scandal Rocks Utah Home for Vulnerable Children: Police raided the home after an employee reported sex among residents and misconduct by staff,” ProPublica, 21 Mar. 2016,

[36] “Police arrest 5 after riot at St. George treatment center results in 25 injured students,” St. George News, 29 Apr. 2019,

[37] Jessica Miller, “After a riot, increasing violence and now sex abuse allegations, Red Rock Canyon school will close,” The Salt Lake Tribune, 10 Jul 2019,

[38] Christian Martinez, “Red Rock Canyon School to close after multiple abuse allegations,” St. George Spectrum & Daily News, 10 July 2019,

[39] “2nd Utah Facility Housing Oregon Foster Youth To Close,” OPB, 12 July 2019,, -pleasant-academy-closing-oregon-foster-care/; “As Washington Pulls Foster Kids From Facility, Oregon Children Remain,” OPB, 4 Jun. 2019,

[40] “Utah Facility Housing Oregon Foster Youth To Close After Reports Of Abuse,” OPB, 11 Jul. 2019,

[41] “Second Utah facility for troubled teens to close in a month,” 2KUTV, 16 July 2019,

[42] “NEW: Six arrested after riot at Palm Beach juvenile detention center,” The Palm Beach Post, 1 Oct. 2018,


[44]“Child battery investigation closes Union Juvenile Residential Facility, officials say,” 4 Gainsville News, 17 July 2019,



[47] “How small rebellions by Florida delinquents snowball into bigger beatings by staff,” Miami Herald, 22 Dec. 2018,




[51] “’Mom, Please Help’: FBI Probing Alleged Abuse of Deaf, Autistic Kids,” NBC News, 14 Sept. 2015,

[52], citing “DJJ terminated contract due to failure to correct “deficiencies,” Daily News, 24 June 2017,;

 [53] citing “Teen Girls Molested at Youth Prison,” Health News Florida, 12 Feb. 2013,

[54] citing “Former med tech gets 25 years in sex case,” Pensacola News Journal, 16 Apr. 2014,

[55] Penn Little, “Acadia Healthcare: Very Scary Findings from A 14-Month Investigation,” Seeking Alpha, 16 Nov. 2018,