Alsana Castlewood & Riverside Co. Face RICO Charges in Amended Federal Lawsuit.

Civil Lawsuit case # 4:22-cv-001-CDP amended on February 14, 2022 in Federal Court to include Civil Conspiracy, Racketeering and RICO charges.

Excerpts include:

Racketeer Influenced Corrupt Organizations:

Castlewood, through its own actions, along with Riverside, through its own actions, individually and through conduct constituting a conspiracy, operated and engaged in legitimate and illegitimate activities, including the racketeering activities herein alleged which such activities caused damage to Plaintiff, (hereinafter “The Alsana Enterprise.”). In creating and operating The Alsana Enterprise, Castlewood and Riverside violated 18 U.S.C. § 1962(c) because, each of them engaged in conduct which affected interstate commerce, and conducted or participated, directly or indirectly, in the conduct of The Alsana Enterprise’s affairs through a pattern of racketeering activities, e.g., violations of 18 U.S.C. § 1341 (Mail Fraud) and 18 U.S.C. § 1343 (Wire Fraud).

The Alsana Enterprise’s Scheme:

The sole reason for Riverside to exist is to generate profits for its investors. Riverside saw an opportunity in a generally unregulated industry and targeted a troubled treatment center. The treatment center would be its public face through which it could generate large profits without having to be answerable to any third parties. And so, Riverside and Castlewood, through The Alsana Enterprise engaged in acts of unethical profiteering at the expense of providing quality medical and mental health care.

The passage of the Mental Health Parity Act of 2008 and The Patient Protection Affordable Care Act (“ACA”) paved the way for Riverside to acquire Castlewood from its former private equity owner, Trinity Hunt Partners in January of 2017. At the time, Castlewood was a deeply troubled institution. After Riverside acquired Castlewood, Riverside engaged in a pattern of profiteering at the expense of providing quality medical and mental health care for persons suffering from eating disorders. Riverside became focused on developing high-end residential facilities for self-pay and commercially insured patients rather than comprehensive outpatient services for both publicly and privately insured patients. This is because the reimbursement rate from private insurers for residential treatment care is financially must greater than partial treatment care or outpatient treatment care

Riverside was able to acquire Castlewood and accomplish its scheme due to the following but not limited to factors:

A. Numerous lawsuits being prosecuted against Castlewood;

B. The ethically questionable prior leadership of Castlewood;

C. The on-going legal and administrative issues being fought by Castlewood;

D. The State of Missouri did not have a statutory Corporate Practice of Medicine Doctrine;

E. There are no generally accepted standards of care for the treatment of eating disorders;

F. There is no federal or state agency tasked with overseeing or regulating the care provided to those who suffer from eating disorders;

G. Other private equity companies had entered the eating disorder industry and purchased other residential treatment centers, and;

H. Castlewood had never been owned by medical doctors or licensed psychiatrists

Background Facts Related to Violations of RICO

In order to attempt to divest itself from Castlewood’s sordid past, in the span of six years, Castlewood changed public relations firms four times. Riverside, who acquired Castlewood in January of 2017, finally stumbled onto the idea of changing Castlewood’s public name to “Alsana.”

The Alsana Enterprise scrubbed all references to Castlewood from every website it owned and controlled. In order to make it appear to the general public that Alsana was a reputable entity with almost two decades of experience, The Alsana Enterprise substituted the fictitious name, “Alsana,” and “Alsana’s” logo in place of the Castlewood name and logo on all press releases and postings which appear on all social media platform as well as their new website.

And yet, Alsana is, and always has been a non-entity. It is merely a fictitious name. Castlewood filed a fictitious name certificate registering the Alsana name with the Missouri Secretary of State on or about March 28, 2019. The Alsana name exists for the sole purpose of allowing Castlewood to continue its business unimpeded and unconnected with Castlewood’s past disgraces, lawsuits, controversies and corruption.

The blog section on “Alsana’s website” lists 49 pages, with 12 articles on each page which laud the alleged work performed by “Alsana.” These articles go back to 2011, 8 years before Alsana’s Fictitious Name Certificate was filed. See, https://www.alsana.com/blog/

Castlewood’s name appears on none of the 588 articles published by The Alsana Enterprise.

The Alsana Enterprise Misrepresents the Type of Treatment it Provides

On its website, The Alsana Enterprise advertises that it uses “holistic, evidence-based eating disorder treatment.” The purpose of this statement is to entice patients to admit into, and then stay, at its treatment facilities. But nothing could be further from the truth.

Castlewood allegedly utilizes what it refers to as “Adaptive Care Model.” This Model allegedly reflects its “integrative approach to eating disorder treatment. We focus on the Case: 4:22-cv-00117-CDP Doc. #: 6 Filed: 02/14/22 Page: 48 of 59 PageID #: 102 PLAINTIFF’S FIRST AMENDED COMPLAINT -- Page 49 total health and well-being of each client by empowering these areas: medical, therapeutic, nutrition, movement, and relational practices.”

In order to lure patients suffering from this illness to its facilities, Castlewood represents that its “Adaptive Care Model outperforms traditional eating disorder treatment models in reducing the severity of eating disorder symptoms.” However, no university-based, governmental agency, third party, peer-reviewed, or independent agency-based research study exists indicating that Castlewood’s Adaptive Care Model is effective or appropriate in treating eating disorders. In fact, even the records kept by Castlewood reflecting the alleged treatment it claims to give its patients do not indicate the usage or manner in which the Adaptive Care Model is being applied.

Castlewood also allegedly uses treatment regimens known as “Internal Family Systems” (“IFS”) and Dissociative Identity Disorder Therapy (“DID”). Again, no reputable residential treatment program in the United States utilizes these treatment programs and in fact, IFS was originated and implemented by Castlewood’s disgraced former owner, Schwartz and his colleague Richard Schwartz.

In truth, Castlewood is basically a five-day-a-week residential program with little, if any, substantive treatment and counseling being rendered on the weekends. In addition, valuable time during group sessions is squandered in each and every group as each patient is required to discuss what “their pronouns are,” engage in art therapy, or engage in other conduct not related to the care and treatment of eating disorders.

Riverside and Castlewood engaged in, conspired to, and did in fact engage in mail and wire fraud in violation of 18 U.S.C. §1341 or §1343 by having devised the scheme described herein for the purpose of obtaining money by means of false or fraudulent pretenses and representations and by knowingly using, or causing to be used, the United States mail, interstate carriers or interstate wire communications in furtherance of and for the purposes of executing the scheme perpetrated by The Alsana Enterprise. Some of these acts and communications, which were transmitted by the United States Postal Service and through the use of interstate and foreign internet wire services are set forth in paragraphs 151 – 153, which are incorporated herein by reference as if set forth verbatim.

The entire 59 page amended lawsuit may be downloaded by clicking on the .pdf file below.