Sober-living Home Operators in California Charged in $176M Fraud Scheme

Former operators of a Southern California sober-living operation have been charged with fraud for allegedly keeping hundreds of people in what the state insurance commissioner calls a “never-ending cycle of treatment, addiction and fraud.”

The Insurance Department announced the arrests of Chris Bathum, former owner of Community Recovery, and executive Kirsten Wallace.

Separately, Bathum was arrested on suspicion of sexually assaulting former clients.

Community Recovery, now called Commonwealth Global, operates more than a dozen sober-living homes and outpatient facilities in Los Angeles and Orange counties. Fifteen were raided by investigators last week.

Prosecutors say the operators stole identities of drug- and alcohol-addicted people, bought health insurance policies without their knowledge and submitted $176 million in phony bills.

It wasn’t immediately known if they have attorneys.