REPORT OF INVESTIGATION NARCONON OF GEORGIA

CASE NUMBER: OIG 1203088

DAVIDA COOK COMMISSIONER

INVESTIGATOR: KARL T REIMERS

DATE OF REPORT NOVEMBER 19, 2012

ROBERT M FINLAYSON III INSPECTOR GENERAL

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GEORGIA DEPARTMENT OF COMMUNITY HEALTH OFFICE OF INSPECTOR GENERAL

TABLE OF CONTENTS

Predication ......................................................... . Page 3

Purpose ...................................•.......•...........••....... Page 3

J . di . uns ction ........•.•.....•.•.....................................•. Page 3

Backgl-ound •..•...•••.•..••...•.•............•..•....••.•.••..•.•.•. Page 3

Case S-ynopsis ..•....•..••.•...•...•.•.......•.•..••..•..•••....•.... Page 4

Fi.ndings ...•...................•...............•..............•....•... Page 8

Subject(s ) ............................................................ . Page 9

VIII. Witn.esses...... .....•.•. ...........•.•....... ...•................•...... Page 9

IX. Appendix............................................................... Page 11

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DEPARTMENT OF COMMUNITY HEALTH OFFICE OF INSPECTOR GENERAL

Case File Number: OIG1203088 Date: November 19, 2012

Predication:

Based on a complaint filed by Matthew Hurley, a private citizen, an Internal Affairs investigation was conducted in to allegations that the Department of Community Health (DCH), and specifically Healthcare Facility Regulation Division (HFRD), is being influenced in to making regulatory decisions favorable to Narconon of Georgia, an outpatient drug rehabilitation and education program operating in Norcross Georgia.

Purpose:

To investigate an allegation that DCH employees working for Healthcare Facility Regulation Division are being influenced in to making regulatory decisions favorable to Narconon of Georgia.

Jurisdiction:

The Office of Inspector General has jurisdiction to investigate all allegations of employee misconduct committed by DCH employees. For the purposes of this investigation, the venue is the Georgia Department of Community Health, Office of Inspector General- Internal Affairs Unit.

Background:

On July 01, 2009, DCH assumed licensing responsibility from the Department of Human Resources (now known as the Department of Human Services-DRS). The Office of Regulatory Services (ORS) became Healthcare Facility Regulation Division (HFRD) with all its employees transferring to DCH.

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DEPAR1MENTOFCOMMUNITYHEALTH OFFICE OF INSPECTOR GENERAL

In April2012, the Department of Community Health-Division of Healthcare Facility Regulation received a complaint from Matthew Hurley. The complaint, addressed to Inspector General Robert M Finlayson was copied to HFRD Division Chief Brian Looby and DCH General Counsel Richard Greene. The complaint by Mr. Hurley primarily questioned why Narconon of Georgia has been allowed to continue operation of a drug treatment/rehab program despite alleged fraudulent statements to DCH, mail fraud, and theft by deception. Additionally, Mr. Hurley questioned how DCH could re-instate Narconon of Georgia's license to operate after having revoked it in 2006. Mr. Hurley also mentioned the tragic death of a client (Patrick Desmond) in 2008, and the suspected connection to the Church of Scientology. Mr. Hurley did not initially receive a response to his letter.

HFRD has responded to numerous complaints at Narconon of Georgia, some of which were made by Mr. Hurley. All the complaints were thoroughly investigated. Several of the complaints were initially reported with findings of regulatory violations. Two examples of these reports are GAoou0446 and GA00109510. In both these cases, an HFRD Surveyor responded to Narconon of Georgia, conducted an unannounced site visit, and found what he deemed to be regulatory violations. The Surveyor wrote a report outlining the regulatory violations and submitted it to his supervisor for approval. The HFRD Supervisor agreed with the findings. In the case of GAoou0446, [a complaint originated by Mr. Hurley] an HFRD Surveyor citing numerous regulatory violations filed a nine-page deficiency report. A report of the findings was mailed to Narconon of Georgia along with a request for a corrective action plan. Narconon of Georgia responded with a corrective action plan addressing the various violations. A copy of the report was made available to Mr. Hurley. A subsequent review by the Potential Enforcement Action Group (PEA) determined there was not sufficient evidence to substantiate the findings.

In response to Mr. Hurley's complaint and allegation that DCH employees are being influenced in to making regulatory decisions favorable to Narconon of Georgia, and at the direction of DCH Commissioner David Cook, an Internal Investigation began.

Case Synopsis:

On September 25, 2012, I received notification to begin an internal investigation of HFRD employee conduct regarding Narconon of Georgia. The primary focus of the investigation is to determine if DCH-HFRD employees are being influenced in to making regulatory decisions favorable to Narconon of Georgia. As part of my investigation, I researched the origins of N arconon of Georgia, and any affiliations.

Narconon of Georgia is licensed in the State of Georgia as an outpatient drug abuse treatment and education program. Narconon of Georgia is located at 5688 Peachtree Parkway# B1·, Norcross Georgia. Narconon of Georgia does not openly advertise any affiliation with the Church of Scientology, but does utilize many teachings and methods created by the Scientology religion founder L. Ron Hubbard. The Association for Better Living & Education International (A.B.L.E) is the umbrella organization for Narconon International.

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DEPARTMENT OF COMMUNITY HEALTH OFFICE OF INSPECTOR GENERAL

According to the A.B.L.E. website , they are a secular (non-religious) non-profit corporate entity with its international headquarters in Los Angeles California, and offices on each continent.

Narconon of Georgia is one of numerous drug rehabs, treatment and education centers that are a part ofNarconon International.

The Department of Community Health (DCH) assumed licensing responsibility for Narconon of Georgia on July 01, 2009. Prior to that time, the Department of Human Resources (DHR) held the licensing responsibility. The unit within DHR that enforced the rules and regulations for licensing was known as the Office of Regulatory Services (ORS). Since that time, DHR has become the Department of Human Services (DHS), and ORS changed to Healthcare Facility Regulation Division (HFRD) and became part of DCH. All HFRD employees that were a part of ORS, transferred to DCH.

I reviewed numerous Healthcare Facility Regulation documents including complaints, incident reports, summary findings, corrective actions plans etc. I have read numerous depositions, statements, memorandums, directives, letters, and emails made available as the result of a wrongful death civil suit filed in the State Court of DeKalb County Georgia (Civil Action No.1o­A-28641-2) regarding the death of Patrick Desmond. Many previously unavailable documents have been made public record due to recent court filings in the Patrick Desmond civil case.

I interviewed DCH-HFRD employees Avery Flower, Deborah Ferguson, Mark Becker, and Brian Looby.

The focus of the interviews was not to question the employees on their job performance, but rather to get a better understanding of the entire complaint process and how decisions are made, especially complaint intake, onsite investigation, reporting, and subsequent adverse action against a facility/provider.

Woody Dahmer, Office of General Counsel, was present and participated in all interviews. Interim Inspector General Toni Prine participated in the interview vvith Brian Looby per Internal Affairs protocol regarding interviewing a Division Chief.

The following summarization was derived from the interviews of HFRD staff.

Healthcare Facility Regulation routinely meets every Tuesday in a group meeting of select HFRD employees known as a Potential Enforcement Action Meeting (PEA). The group meeting convenes any time there is the potential for adverse action against a facility [stemming from an on-site inspection]. This was the case on the two previously mentioned reports (GAoo110446 and GAo0109510 ). The PEA meeting core members are HFRD Division Chief Brian Looby, Deputy Division Chief Avery Flower, and Legal Officers Stacey Hillock and Vic Mohan. HFRD's Legal Officer Stacey Hillock facilitates the meetings.

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DEPARTMENT OF COMMUNITY HEALTH OFFICE OF INSPECTOR GENERAL

**NOTE** Vic Mohan, [no longer a DCH-HFRD employee], was part of previous PEA meetings, but was not interviewed. Stacey Hillock is on maternity leave, and was not available.

In complaints that involved Narconon of Georgia, the Surveyor responsible for conducting the on-site (Mark Becker) attended, as would Director of the Specialized Care Unit Deborah Ferguson. The PEA meetings are a group discussion where upon the Program Manager presents the facts in the case, including any previous history within 24 months and citations noted during the inspection, and as a group, the members decide if adverse action should be imposed against the facility, and the severity of the sanctions. In matters involving Narconon of Georgia, Mark Becker presented his findings because Deborah Ferguson felt him to be the best source of information. If in the opinion of the group, there was not sufficient evidence to support the case through the hearing and appeals process, the violations would be unsubstantiated. In the case of GAo0110446, a decision was made based on advice of legal counsel, that the violations initially reported by Mark Becker did not have enough substantive evidence to hold up in a legal hearing.

Because there was insufficient evidence to proceed, the PEA group directed Deborah Ferguson to issue a new report with a finding of unsubstantiated. Unsubstantiated does not mean the violation did not happen, only that the department was unable to legally substantiate a regulatory violation at the time the inspection was conducted. Division Chief Brian Looby instructed his staff to continue vigorously investigating Narconon of Georgia.

Members of the PEA core group often keep individual notes during the discussion, but no formal minutes are kept and no report is written.

In all cases presented to the PEA meeting group, proper interpretation of regulatory rules is strictly adhered to. An informed decision is made based on all known facts, and equal treatment is given to all facilities.

The complainant is notified of the outcome when an inspection has been completed. A report of the findings (if applicable) is sent to the facility with any needed corrections indicated. HFRD follows the State Enforcement Matrix in accordance with DHR Rules and Regulations for Enforcement of Licensing Regulation. Essentially, the Matrix has three levels of violations, (Category I, Category II, and Category III), and is divided in to initial, subsequent, and repeat. Within the sub-categories: initial, subsequent, and repeat, are alphabetical designations indicating what sanctions can be imposed. In reviewing the different complaints and reported violations regarding Narconon of Georgia, it appears that a Category III-Level [D] violation was imposed against Narconon of Georgia. Level [D] sanctions require only a plan of correction. According to the ORS State Enforcement Matrix, Category III violations are those which indirectly or over a period of time has or is likely to have an adverse effect on the physical or emotional health and safety of a person or persons in care, or violation of administrative, reporting, or notice requirements. Additionally, multiple violations resulting from the same act, omission, incident, circumstance, or conduct, are not charged per violation, but are charged at the highest category for which a violation is cited as a result of that act, omission, incident, circumstance, or conduct.

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DEPARTMENT OF COMMUNITY HEALTH OFFICE OF INSPECTOR GENERAL

In matters where some evidence of a regulatory violation does exist but is insufficient to hold up through the legal process, the facility is not sanctioned. That was the case with incident GAoo110446 and a profit and loss statement provided to Mark Becker during his April 2012 inspection at Narconon of Georgia.

Mr. Becker requested the profit/loss statement for January through December 2012. In the initial profit/loss statement given to Mr. Becker, there was an entry for $19,545.39 under Grocery Expenses in the Program Expense category. Additionally, there was an entry for $1,012.73 under Utilities/Cable Expense. Mr. Becker noted in his report that there were no televisions at the facility. Mr. Becker questioned Narconon of Georgia Executive Director Mary Rieser about the entries in the profit/loss statement. Approximately three hours later, Mr. Becker was given an updated profit/loss statement for January 1 through April to, 2012. The new statement reflected a change in both categories. The new statement showed the grocery expense as Student Support, and the Utilities/Cable expense as Internet Expense. Narconon of Georgia wrote in its corrective action plan that "the information initially reported on the profit/loss statement was entered by a new bookkeeper not fully familiar with the Narconon operation". Additionally, Narconon of Georgia indicated the notation for "cable" represented payments to Comcast, who is the internet service provider for Narconon.

N arconon of Georgia explained this as a simple misunderstanding of arbitrary terminology and was not sanctioned, despite the questionable entries. The Surveyor, Mark Becker, did not ask for a copy of the actual Com cast cable bill, which most likely would have reflected an itemized account of the actual services, and may have disputed Narconon of Georgia's statement that the entry for internet services was just arbitrary terminology.

Mr. Becker reported in GAoo109510 that a review of facility records at Discovery Course on 03/21j2012, specifically client credit card authorization forms, revealed that charges would be discontinued when clients leave the Narconon of Georgia program. This would seem to contradict the statement by Narconon of Georgia that the Discovery Course was created as a collaborative effort developed to promote POST graduation possibilities. The mere fact that it was developed collaboratively seems to suggest a connection between the two entities. An interview with the Discovery Course Director revealed that Discovery Course does not have any clients from any other facility.

Most of the other initially reported regulatory violations related to GA00110446 were speculative. Although eight out of eight clients reported being in the "residential" program at N arconon of Georgia, and in subsequent interviews, twenty-one of twenty-eight clients reported the same thing, the students all signed documentation attesting to their understanding that housing is not part of the outpatient program.

Additionally, the internet search engines linking or referencing Narconon of Georgia as a "residential" program are legally unreliable unless a definitive link between the two entities can be established.

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DEPARTMENT OF COMMUNITY HEALTH OFFICE OF INSPECTOR GENERAL

A review of the internet website did reveal what appears to be another correlation between Discovery Course and Narconon of Georgia.

A search of N arconon of Georgia in Atlanta Georgia revealed four listings with an address on Surnmerchase Drive in Duluth Georgia. The same address is also listed for Discovery Course, when searching in the same manner. According to a representative from yello"~A<-pages.com, this is a paid advertisement. Customers of AT&T are entitled to one free listing on yellow pages; any additional listing is subject to a fee. According to yellowpages.com, a representative then calls the customer back to verify listing information prior to posting it on the site.

The apartment complex Summerchase is the predecessor complex of Berkley Landings Apartments, an apartment complex located off Peachtree Industrial Boulevard in Duluth Georgia. According to the Georgia Secretary of State's website, Discovery Course Limited lists 2310 Summerchase Drive in Duluth Georgia as its principal office address. The company website, , makes no mention of the Surnmerchase address anywhere on its site, but represents itself as a recovery residence for those, "Participating in drug treatment or who have recently graduated from treatment, and are entering back into the work force". Discovery Course deceptively lists the apartment building as the "Main Housing Complex", and calls it a "residential setting" in a beautiful wooded area just outside Atlanta.

Documents recently released due in part to the civil action lawsuit on behalf of Patrick Desmond, draw a strong correlation between Narconon of Georgia and what it calls "affiliate" housing. Discovery Course appears to be the latest example of this.

Findings:

There are many documented complaints that have been made against Narconon of Georgia. Surveyors from Healthcare Facility Regulation have conducted thorough inspections of reported complaints. There have been documented occasions when a surveyor has gone to Narconon of Georgia and found what initially appeared to be regulatory violations. In some instances, a PEA group meeting has led to initially reported violations being overturned. The basis for the unsubstantiated findings has been a group discussion of all available evidence by core members of HFRD staff. In matters where sufficient evidence of a regulatory violation did not exist, the facility was not sanctioned.

Internal Affairs interviewed all available HFRD employees involved in the regulatory oversight of N arconon of Georgia.

DCH is a non-criminal justice agency with no subpoena authority. HFRD is limited to interpretation of the DHR Rules and Regulations as they apply to established licensing requirements in the State of Georgia.

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DEPARTMENT OF COMMUNI1Y HEALTH OFFICE OF INSPECTOR GENERAL

There is no indication that HFRD employees are ignoring regulatory violations at Narconon of Georgia. Surveyors are responding to complaints, documenting violations, and seem genuinely frustrated at the outcome. Decisions regarding unsubstantiated violations were made based on sound legal judgment, and not on any internal or external influences.

Since the Internal Affairs Unit began its investigation, numerous documents, memorandums, emails, letters, etc. related to the internal operation of Narconon of Georgia, have been made available due to the Patrick Desmond civil action filed in DeKalb County Georgia-State Court. Many of these documents were previously unknown and thus unavailable to DCH/HFRD staff, and may have had a significant impact on decisions that were made with respect to regulatory oversight of Narconon of Georgia. Since this new information was made available, HFRD has opened a new investigation, and is currently in the process of reviewing documents that may assist them in future oversight of N arconon of Georgia.

There is no indication that any employee at the Department of Community Health or Healthcare Facility Regulation conducted him or herself in any manner contrary to that of the normal professional execution of their duties.

Subject:

Witnesses:

Narconon of Georgia, Inc. 5688 Peachtree Parkway # B1 Norcross, Georgia 30092 (770) 379-0208

Mark Becker Surveyor Georgia Department of Community Health Healthcare Licensing Healthcare Facility Regulation Division 2 Peachtree Street NW Atlanta, Georgia 30303 ( 404) 276-4 704

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Investigator:

DEPARTMENT OF COMMUNITY HEALTH OFFICE OF INSPECTOR GENERAL

Deborah Ferguson, MSN, RN Director~Specialized Care Unit Georgia Department of Community Health Healthcare Licensing Healthcare Facility Regulation Division 2 Peachtree Street NW Atlanta, Georgia 30303 (404) 657~5421

Avery Flower Deputy Division Chief Georgia Department of Community Health Healthcare Facility Regulation Division 2 Peachtree Street NW Atlanta, Georgia 30303 (404) 657-5852

Brian Looby Division Chief Georgia Department of Community Health Healthcare Facility Regulation Division 2 Peachtree Street NW Atlanta, Georgia 30303 (404) 657-5701

Karl T Reimers Internal Affairs Georgia Department of Community Health Office of Inspector General 2 Peachtree Street NW Atlanta, Georgia 30303 (404) 232-1656

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EXHIBITS

DEPARTMENTOFCOMMUNITYHEALTH OFFICE OF INSPECTOR GENERAL

APPENDIX

I. Original complaint from Matthew Hurley

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Robert M. Finlayson JII Office of Inspector General Department of Community Health

Dear Mr. Finlayson

OFFICS OF INBP!CTOR Gl!Niftt!. Narconon of Georgia RECEIVED •

APR 1 7 2012 Complaint# GAOO 110446

DEPAKI'UENT OF COMMUNITY HEAL~

I am writing you directly as a concerned citizen. The topic of my concern is the DCH licensed drug rehab facility known as Narconon of Georgia presently located @ 5688 Peachtree Parkway #Bl Norcross, GA 30092 .

My concern centers on HOW a state agency such as the DCH can allow the continued operation of this facility. Back in 2006 DCH did in fact revoke this organizations license to operate, only to tum around and approve said facilities licensing to operate.

Fast-forward to June of2008 and this same approved DCH licensed facility and its agents have once again lied to state agencies both within and outside the state of Georgia. Those lies having resulted in the tragic death of Patrick W Desmond.

As I write you this facility is open and operating unimpeded. I question how the DCH can allow this to transpire! Are ftaudulent statements to government agencies, mail fraud and theft by deception @ the cost of some of our most vulnerable members of society acceptable to the great state of Georgia? I dearly hope not.

For the life of me I cannot understand how a state agency (DCH) can license a drug rehab program based on pulp science fiction writer L Ron Hubbard, Founder of the so called church of Scientology.

As a concerned citizen and filmmaker here in Georgia I have in the past seen the inner working of this organization during the practice of my trade. With the knowledge gained by that experience, I would never send a loved one to this organization or it agents.

On that note I would hope you read the documents included in this letter.

Cordially, Matthew Hurley

cc. Brian Looby. Division Chief, Healthcare Facility Regulation Richard Greene. General Counsel