Did you know about patient brokering? It’s when someone gives patient referrals for some kickbacks. The Jarryd Ageloff case can be a good case study of how such schemes work and how dangerous they can be.
I’m sharing the details of the Jarryd Ageloff case to help you people understand more:
Jarryd Ageloff: Family Duo Behind Delray Rehab Center Indicted for Patient Brokering Scheme
A Delray Beach man and his uncle, both operators of a local substance-abuse treatment center, were arrested this week after allegedly paying $20,000 in illegal kickbacks for patient referrals, according to law enforcement officials.
Jarryd Ageloff, 29, of Delray Beach, and his uncle, Roy Brian Ageloff, 59, of Boca Raton, were both taken into custody on Wednesday and booked at the Palm Beach County Jail. Each man was charged with seven counts of patient brokering and one count of conspiracy to commit patient brokering. They were released a few hours later after posting $24,000 bail each.
As of Thursday, court records did not list an attorney for either defendant. Calls to a phone number associated with Jarryd Ageloff went unanswered.
Allegations of Kickbacks in Patient Referrals
Under Florida law, it is illegal for health care providers, including drug treatment centers and laboratories, to offer or pay financial incentives—such as bonuses, commissions, or bribes—in exchange for patient referrals. These practices, known as patient brokering, are closely linked to widespread fraud in Florida’s rehab industry, where insured patients are often viewed as lucrative assets due to high reimbursement rates from drug testing and therapy.
According to arrest affidavits filed by the Delray Beach Police Department and the Palm Beach County Sheriff’s Office, the Ageloffs were operating Pride Recovery Center, a substance-abuse treatment facility located on West Atlantic Avenue in Delray Beach. Investigators allege the facility paid referral fees to the operator of a group of sober homes known collectively as House of Hope.
The sober home operator, identified only as a confidential informant, told police that the Ageloffs entered into a referral agreement in early 2016. Under this arrangement, Pride Recovery Center would pay:
- $2,000 for between one and five patient referrals
- $4,000 for six to ten referrals
The agreement stipulated that referred clients had to attend at least three intensive outpatient sessions per week to qualify for payment. These outpatient services, commonly billed to patients’ insurance providers, are a key revenue stream for treatment centers.
Between May 6 and June 17, 2016, investigators uncovered seven separate checks issued by Pride Recovery Center, each for $2,000 or $4,000, totaling $20,000. These payments, authorities allege, are direct evidence of patient brokering.
A Troubled Past for One Defendant
The charges mark the latest legal troubles for Roy Brian Ageloff, who has a history of serious financial crimes. According to prior reporting by The Palm Beach Post and The Orlando Sentinel, Ageloff pleaded guilty in August 2000 to federal racketeering charges. He was sentenced to eight years in federal prison after being implicated in a massive securities fraud scheme at a Boca Raton brokerage firm, which reportedly defrauded thousands of investors out of millions of dollars.
The fraud involved artificially inflating stock prices and misleading investors—a classic case of stock manipulation that drew national attention at the time.
Later, federal prosecutors accused Ageloff and his brother, Michael Ageloff, of conspiring to launder approximately $3.5 million by investing the stolen funds into movie productions. Despite being incarcerated at a federal prison in North Florida, Roy Ageloff allegedly continued to coordinate the movement and investment of funds. These actions resulted in additional federal charges of conspiracy to commit money laundering, for which he received an additional four-year prison sentence.
Larger Context: Florida’s Rehab Industry Under Scrutiny
Florida’s drug treatment and sober home industry has been the subject of growing scrutiny over the past decade, as reports of insurance fraud, kickback schemes, and patient exploitation have come to light. State and federal authorities have ramped up efforts to investigate and prosecute cases involving patient brokering and improper billing.
The charges against the Ageloffs reflect an ongoing push by local law enforcement to root out illegal practices in the addiction treatment sector, particularly in Palm Beach County, a region often described as the epicenter of Florida’s recovery industry.
Investigations remain ongoing, and it is not yet clear whether additional charges or defendants will be named in connection with this case.
What Is Patient Brokering?
Under Florida law, patient brokering occurs when individuals or entities provide kickbacks, bribes, or commissions in exchange for referring patients to substance-abuse treatment centers, labs, or sober homes. Penalties escalate based on volume:
- 3rd-degree felony for fewer than 10 patients
- 2nd-degree felony for 10–19 patients
- 1st-degree felony for 20 or more patients
Why It’s Dangerous
- Exploits vulnerable patients: Brokers target people struggling with addiction, often offering free travel, housing, or even drugs to ensure referrals.
- Drives fraud: Treatment centers inflate insurance billing, often for medically unnecessary services like repeated detox cycles, therapy sessions, and drug tests.
- Shuffles patients: The so-called “Florida shuffle” sees patients cycled through multiple facilities to maximize billing—over $40,000 per patient in some cases.
Scale & Statistics
- In Palm Beach County alone, law enforcement has made approximately 120 arrests since 2016, with around 110 convictions.
- In a $112 million federal fraud scheme (South Florida, 2021), operators of two treatment centers were convicted for funneling patients via brokers, billing insurers fraudulently, and paying recruiters kickbacks—including cash, flights, and illegal drugs.
- A massive $36 million patient brokering case (Central District of California) highlights that such schemes aren’t confined to Florida, though Florida remains an epicenter.
Key Prosecutions
• Palm Beach County “Medical Marketer” (August 2019 & November 2020)
- Allan Jarboe pleaded guilty to brokering at least 26 patients, receiving kickbacks totaling nearly $200,000 from a mail-order prescription pharmacy. He was sentenced to 6 years (2019) and 5 years (2020) in prison.
• South Florida Addiction Facility Conviction (2021)
- Jonathan and Daniel Markovich ran Second Chance Detox (Compass Detox) and WAR Network. A federal jury found them guilty of billing over $112 million for unnecessary services and paying recruiters kickbacks. They also faced charges of money laundering and PPP loan fraud.
Trends & Enforcement
- Florida Task Forces: Multi-agency units, especially in Palm Beach County, have led coordinated crackdowns. In one jurisdiction alone, 46 individuals were arrested early on, with 22 guilty pleas.
- Florida Shuffle awareness: Characterized by transporting insured addicts to high-billing centers via coordinated brokers, often for maximum insurance reimbursement.
- Legislative evolution: Florida strengthened its Patient Brokering Act (2019–2020), clarifying what arrangements are illegal and tightening exceptions.
Takeaways
- Major financial impact: Fraudulent schemes have seized tens to hundreds of millions, draining insurer funds, over $112 M in a single South Florida case.
- High prosecution rate: ~120 arrests and ~110 convictions in one county highlight ongoing state-level enforcement.
- Severe penalties: Offenders face up to 30 years imprisonment and half a million dollars in fines for large-scale schemes.
- Patient harm: Schemes exploit addiction, providing unnecessary or harmful treatments, and often abandoning vulnerable individuals.
Conclusion
Florida’s aggressive stance on patient brokering through statutes, joint law enforcement efforts, and high-profile prosecutions demonstrates a strong commitment to protecting vulnerable individuals and curbing insurance fraud. However, as bad actors adapt, continued vigilance and resources are essential to dismantle these exploitative networks.
