PALM SPRINGS, Fla. — Dozens of employees who were forced from their job nearly eight months ago are still waiting to be made whole.
Now, lawyers on both sides of a federal lawsuit are untangling a complicated financial web behind Retreat Behavioral Health and discovering potential fraud and other improper practices.
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On a morning in late June, people could be seen scrambling around the parking lot behind Retreat Behavioral Health, carrying belongings in boxes, laundry baskets and plastic bags.
Employees and patients at the mental health facility in Palm Springs were told that the business was out of money and closing immediately, after the CEO had ended his own life.
A few days later, a second Retreat executive died by suicide.
The weeks that followed the closure were a mix of sadness, confusion and anxiety for the roughly 200 employees at Retreat, who told WPTV at the time that they hadn’t been paid for their final three weeks of work.
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“Even now, I'm still — seven months on— struggling to catch up,” said a former Retreat employee, who spoke to WPTV on the condition of anonymity out of concern for her career.
WPTV first met this employee, along with several others, when Retreat first closed.
In January, she said she and her former coworkers received checks in late December.
“We were paid, like a base amount for approximately two weeks of work,” she said. “We are still owed half of another paycheck, all of our (unused paid time off), all of our overtime."
“Two weeks in overtime might be little to some people, but it really would make a change to a lot of our lives to just have that money back.”
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It’s why two other former Retreat employees filed a federal lawsuit against Retreat Behavioral Health, its parent company, its surviving leadership, and the estates of its two top executives: CEO Peter Schorr, who took his own life three days before Retreat closed, and and Chief Administrative Officer Scott Korogodsky, who ended his life two days after the closing.
“It is a drawn out process of fighting to try and do everything we can to help these employees,” said Ryan Barack, a Clearwater-based employment attorney who is representing the plaintiffs in the federal case. “There's a bunch of different courts and entities that are involved. It's a— it's a mess.”
Retreat’s executives oversaw mental health facilities in Florida, Pennsylvania, and Connecticut under separate business entities incorporated each state. All of the facilities closed the same day, leaving workers across all three states unpaid and unemployed.
A Pennsylvania judge appointed a receiver to sort through the finances of Retreat’s parent company in that state, NRPA.
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In an affidavit filed as evidence in the federal lawsuit receiver James Young wrote that the finances between the three separate business entities were “integrated and interdependent.”
The affidavit details millions of dollars in unpaid debt, inflated assets in Pennsylvania, And what Young called “significant and widespread practice(s)” of not pursuing patients who owed money out of pocket and incentivizing patient referrals.
“I have uncovered significant matters that may amount to healthcare fraud claims and warrant further investigation,” Young wrote.
Young also found that Korogodsky may have been using the company credit card for personal use and confessed to the practice in an apparent suicide note, which did not admit any other criminal wrongdoing.
WPTV reviewed an itemized list of business expenditures for NRPA over several years that were attached to the affidavit. The list included thousands of dollars in charges at “Hard Rock” and Guitar Center with the name “Scott K.” next to them.
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“We suffer some because we we're not in a position where we can ask the two gentlemen who were two gentlemen who were involved in the operation of the business, about those expenses," Barack said. “There are other corporate officers who are available and should be asked about those expenses, including the chief financial officer and others.”
Chief Financial Officer Alexander Hoinsky is among those listed as defendants in the lawsuit.
Shortly after Retreat closed, Hoinsky told WPTV that he never had control of the company’s finances. His name does not appear in Young’s affidavit.
“He was given the title of Chief Financial Officer, which was an honorary thing that they gave him to give him a good feeling or whatever. But he didn't actually-- he wasn't actually a chief financial officer,” said Peter Ticktin, the lead attorney representing the defendants in the federal lawsuit.
Ticktin said the surviving executives, including Hoinsky, were also not paid, and therefore they should be collecting damages — not paying them.
“If the company has assets, that's the first place the money should go— to pay those employees," Ticktin said.
Ticktin said the estates of Schorr and Korogodsky are out of money, but he believes the assets to pay employees what they’re still owed remains in the coffers of what’s left of Retreat’s parent companies.
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“There's still revenue coming in all of this,” Ticktin said. “All of these charges to insurance companies and to — you know, Medicare, Medicaid, whatever, are coming through.”
Both attorneys said the full financial picture of Retreat remains unclear, and they may never have all the answers.
“I think at the end of the day, there's a common desire to try and figure out what happened,” Barack said.
“You see, that's the thing in life. Not everything always has a happy ending. Not everything always works out," Ticktin said. “Not always is there somebody that is responsible that's still available to make good on the on their bad moves.”
In addition to any unpaid wages, the lawsuit is seeking damages related to Retreat’s alleged violation of the WARN Act, which requires that employers give workers advance notice before a mass layoffs. Barack said those damages could be in the millions.
