Sovereign Health tells workers they won’t be paid; closes California drug rehab facilities

addiction recovery ebulletin sovereign health closing

Sovereign Health Shuts California Facilities –

July 11, 2018 – One of the bigger addiction treatment providers in Southern California, Sovereign Health, is closing its doors amid financial difficulties and an ongoing investigation following allegations of insurance fraud.

In a July 5 letter to employees Sovereign Chief Executive Tonmoy Sharma wrote, “While we attempted to secure funding to keep the business operating, we’ve been unsuccessful … At this point given the lack of resources to make payroll over the extended period, I cannot in good conscience, ask you to continue working for no pay.”

Sharma could not be reached for comment and no one answered the door at his home in San Clemente. In addition to Sovereign’s headquarters in San Clemente, the company has operations in Culver City, Palm Desert, El Cajon, among others. Sovereign Health, which operated centers for recovering drug addicts and the mentally ill, is among many in the addiction industry accused of abusing insurance rules while churning addicts through rehab programs with little regard for their long-term sobriety. A 2017 investigation by Southern California News Group described Sovereign as one of many players in a region described by industry insiders as Rehab Riviera for its high concentration of addiction treatment operators. Sovereign’s closure comes after a long battle with regulators and creditors.