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Murder charged at American Addiction Centers

San Diego woman one of those indicted at AAC

Today (August 3) the stock of AAC Holdings, a Tennessee-based chain of drug and alcohol addiction treatment centers, plunged by almost 14 percent. But it landed at $32.79, which is more than double the price at which it went public last October, $15.

Murder indictment filed in Riverside

It has been a soaring stock that murder charges could put into reverse gear. On July 21, the state attorney general's office in Riverside County filed an indictment for murder against five present and former employees of the company, and companies that now have been folded into the chain of centers.

The charges relate to the alleged mistreatment of a person admitted to a facility in Murrieta. According to the company's financial filings, it has paid $7.3 million to settle with the family of the person who died right after he was admitted.

Failed to get Benefield oxygen tank

His name was Gary Benefield. According to the indictment, employees of the company, including its president, Jerrod Nathan Menz inflicted "unjustifiable physical pain and mental suffering" upon Benefield. In 2012, the California Senate Office of Oversight and Outcomes, investigating lax regulation of addiction centers, wrote that Benefield was "coughing and wheezing" when he arrived at a center that is now part of the chain. "His oxygen tank had been emptied at the airport because of flight regulations." Although he suffered from chronic obstructive pulmonary disease and emphysema, the facility "failed to get him an oxygen tank. It also gave him an anti-depressant and an anti-anxiety drug without a prescription." He died the next day.

Jerrod Menz

Meg Dean in San Diego charged

Among those charged with murder are Jerrod Nathan Menz, who has stepped down as president of the chain of centers, although he is still an employee of the company. Also charged is Mignon Hernandez (Meg) Dean of San Diego. I asked AAC about Dean. "At the time of the alleged incident, Meg Dean did not work in Murrieta," replied the company. She worked 100 miles away in San Diego. The company says it is "baffled" why she was named. She is head of operations at a San Diego facility which is part of the chain.

AAC has put out information noting that the coroner's report cited the cause of Benefield's death was hypertensive cardiac disease. "The coroner made absolutely no finding that the death had anything to do with treatment at our facility," says the company. "The California Department of Justice's case is without merit," the business said in a news release.

The attorney general's office in Riverside did not respond to my questions.

Drug testing under suspicion

Back in March, a securities industry research firm, Bleecker Street Research, sternly criticized the centers, saying that the stock would drop 50 percent. (It hasn't yet.) The report went into detail on the mishandling of cases, such as the Benefield one that resulted in death, and others that were written up by the California Senate Office of Oversight and Outcomes. The report went on to state that the centers are doing fraudulent drug testing — ordering unnecessary tests and making money on them from its own labs. AAC disputes the charges.

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Today (August 3) the stock of AAC Holdings, a Tennessee-based chain of drug and alcohol addiction treatment centers, plunged by almost 14 percent. But it landed at $32.79, which is more than double the price at which it went public last October, $15.

Murder indictment filed in Riverside

It has been a soaring stock that murder charges could put into reverse gear. On July 21, the state attorney general's office in Riverside County filed an indictment for murder against five present and former employees of the company, and companies that now have been folded into the chain of centers.

The charges relate to the alleged mistreatment of a person admitted to a facility in Murrieta. According to the company's financial filings, it has paid $7.3 million to settle with the family of the person who died right after he was admitted.

Failed to get Benefield oxygen tank

His name was Gary Benefield. According to the indictment, employees of the company, including its president, Jerrod Nathan Menz inflicted "unjustifiable physical pain and mental suffering" upon Benefield. In 2012, the California Senate Office of Oversight and Outcomes, investigating lax regulation of addiction centers, wrote that Benefield was "coughing and wheezing" when he arrived at a center that is now part of the chain. "His oxygen tank had been emptied at the airport because of flight regulations." Although he suffered from chronic obstructive pulmonary disease and emphysema, the facility "failed to get him an oxygen tank. It also gave him an anti-depressant and an anti-anxiety drug without a prescription." He died the next day.

Jerrod Menz

Meg Dean in San Diego charged

Among those charged with murder are Jerrod Nathan Menz, who has stepped down as president of the chain of centers, although he is still an employee of the company. Also charged is Mignon Hernandez (Meg) Dean of San Diego. I asked AAC about Dean. "At the time of the alleged incident, Meg Dean did not work in Murrieta," replied the company. She worked 100 miles away in San Diego. The company says it is "baffled" why she was named. She is head of operations at a San Diego facility which is part of the chain.

AAC has put out information noting that the coroner's report cited the cause of Benefield's death was hypertensive cardiac disease. "The coroner made absolutely no finding that the death had anything to do with treatment at our facility," says the company. "The California Department of Justice's case is without merit," the business said in a news release.

The attorney general's office in Riverside did not respond to my questions.

Drug testing under suspicion

Back in March, a securities industry research firm, Bleecker Street Research, sternly criticized the centers, saying that the stock would drop 50 percent. (It hasn't yet.) The report went into detail on the mishandling of cases, such as the Benefield one that resulted in death, and others that were written up by the California Senate Office of Oversight and Outcomes. The report went on to state that the centers are doing fraudulent drug testing — ordering unnecessary tests and making money on them from its own labs. AAC disputes the charges.

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Comments
16

Intake staff has to be trained and prepared or medical emergencies.

Aug. 3, 2015

shirleyberan: I think we will be hearing more of AAC Holdings and its addiction treatment centers. Best, Don Bauder

Aug. 3, 2015

Addiction treatment centers are nothing more that a scam. Their success rate is near zero and their staffing is marginal. They are all about profit and prey on well to do people who keep investing in their loser relatives.

Aug. 4, 2015

AlexClarke: If you go on the consumer complaint websites, you get exactly that story -- over and over. As I said, this will be interesting.

Incidentally, early this morning (August 4), AAC stock is down another 10.81 percent, to $29.24. Best, Don Bauder

Aug. 4, 2015

Couldn't happen to a sleazier bunch of parasites.

Aug. 4, 2015

Yes there are: Nursing home operators.

Aug. 4, 2015

AlexClarke: I can remember back in the 1960s or early 1970s when new issues (initial public offerings) of nursing homes were the hottest stocks around. Best, Don Bauder

Aug. 4, 2015

Yeah, been that route--one friend they almost killed and I had to ream a new vent and get him to the ER again, then got him into a better one. Still another friend is heading to hospice, so that is a major part of what I do these days . . . Not to mention my late, much-loved mother-in-law left lying in a pool of urine . . . but I need not go on.

Aug. 4, 2015

Twister: A nursing home may have killed someone in our family, too. It's very sad. Best, Don Bauder

Aug. 4, 2015

So sorry to hear that. Words are inadequate to express sorrow.

Dog (perhaps they spell their name backwards?) sorrow is more expressive than human sorrow sometimes. I have learned much from other species, and finally research is nibbling at the edges of the principles which drive our species too. I feel the deepest sorrow for those who love the abused or deceased ones. None of us can last forever, but some of us (present company not excepted) try to fill every minute with sixty seconds run. It's ok to smell the roses, though.

Copy the last two letters of love, spell it backwards, and add the copied last two letters to the end--evolve. A mere coincidence with no meaning, of course, so don't tell the History Channel! They'll attribute it to Nostradamus or some alien who landed in Peru.

Aug. 4, 2015

Twister: AAC stock closed down 39.34 percent to $19.89 today (Tuesday, Aug. 4). On July 31 it closed at $38.01. So it has been almost cut in half in two trading sessions. Best, Don Bauder

Aug. 4, 2015

People who are subliminally trying to kill themselves should be looked after, addicted or aged.

Aug. 4, 2015

shirleyberan: I agree. Those who unconsciously are trying to do themselves in need help. We in society have to provide that help. Best, Don Bauder

Aug. 4, 2015

Carl Johnson: I don't know a thing about the TSAs who emptied the tank. I doubt they will be held accountable. Best, Don Bauder

Aug. 5, 2015

AAC HOLDINGS'S LAWYERS KNEW ABOUT CRIMINAL INVESTIGATION IN 2013, BUT DID NOT REPORT IT TO ITS SHAREHOLDERS. Forbes Magazine is reporting today (August 5) that lawyers for AAC Holdings knew in 2013 -- before the company ever went public -- about the criminal investigation, but did not report it to shareholders. The company went public in fall of 2014. In preparation for an initial public offering, a company has to make a number of filings with the Securities and Exchange Commission (SEC). The company going public has to list risk factors. After the offering, a company has to make filings regularly with the SEC.

The source for Forbes was Bleecker Street Research, which was quoted in the Reader's Monday (Aug. 3) item on AAC. Forbes says Bleecker Street Research is run by a 21-year-old college student who sells stocks short (bets they will go down). Bleecker says that a deputy attorney general in the bureau of medi-Cal fraud and elder abuse made the revelation in court declaration in 2013. Discussing the investigation of American Addiction Centers, the deputy attorney general said in the declaration "I anticipate that criminal charges will be filed."

In a separate civil suit, former president Jerrod Menz (who has been indicted but stepped down, remaining on the payroll) admitted he knew about the criminal investigation. Company lawyers discussed the possibility that defendants including Menz might take the Fifth Amendment.

Also in 2013, California Attorney General Kamala Harris also discussed the possibility of criminal prosecution of the company and officials.

In an SEC filing Monday, the company finally conceded that the criminal case could be a risk to the company.

In today's (Wednesday's) trading, the stock rose 4.32 percent to $20.75 -- not surprisingly, in view of the huge hit it took in the two prior days of trading. Several law firms announced today that they are studying whether AAC broke securities laws. Best, Don Bauder

Aug. 5, 2015

Their treatment centers are complete scams. Nothing more than a money making system. No desire to truly help their clients. Their ads, website and call centers are full of lies and outright fraud. I would not recommend sending a loved one there. Please learn from my mistake. Their own staff/techs provide contraband. They do not allow their clients to communicate in private at all, even with family memebers because they know their deceptive practices will be found out. The staff is not very well qualified. Their success rate is pathetic. They are feeding off your desire to help your loved one. Complete and utter bottom dwellers. If you have a child at The Academy in West Palm, please look for alternate location.

Nov. 19, 2015

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