Kirsten Wallace and Christopher Bathum Accused of Money Laundering

 

The Los Angeles County Superior Court announced that Kirsten Wallace, born 4/3/73, has pleaded guilty to 46 felony counts related to a $175 million fraudulent health care billing scheme. Wallace was immediately sentenced to 11 years in state prison, according to Deputy District Attorney Shaun Gipson of the Healthcare Fraud Division. She entered an open plea to five counts of insurance fraud, seven counts of grand theft of personal property, six counts of identiy theft and 28 counts of money laundering. The open plea indicates a sentence was not negotiated with the District Attorney’s Office. April 17th is the date scheduled for a restitution hearing, in Department 105 of the Foltz Criminal Justice Center.

 

Wallace, along with Christopher Bathum, dob 9/22/61, who co-owned the Community Recovery of Los Angeles, were charged in the billing scheme in November 2016. The company operated treatment centers located in Southern California and Colorado. According to Gipson, the two defendants allegedly obtained multiple health care insurance policies for their clients by using their personal identifying information and falsified the clients’ circumstances to obtain the policies, while the patients were unaware that policies had been issued in their name.

Both are also accused of billing former clients after their treatment had ended, while those clients were still working at Community recovery and no longer receiving treatment. Bathum and Wallace allegedly fraudulently billed an estimated $175 million between June 2012 and December 2015. The bills were sent for services allegedly never provided in most instances, and about $44 million was paid out by five insurance companies.

Christopher Bathum is also charged with the same 46 counts Wallace had faced, and his next scheduled court appearance is a pretrial conference on April 17th in Department 105. He faces up to 45 years and four months in state prison if convicted. He was also convicted of sexually assaulting seven women who were patients at his treatment center, last month in a separate case.  A sentencing setting hearing for that case, is scheduled for April 17th in Department 105. He faces a maximum possible sentence of 65 years approximately, in state prison and lifetime sex offender registration.