Murder charged at American Addiction Centers

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.

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.