Fraud Magazine examines abusive and fraudulent practices widespread in the troubled teen industry and how greater oversight and regulation of the industry can reign in some of its worst actors.
Nestled in the serene southwestern landscape of Mayer, Arizona, is the now-shuttered Spring Ridge Academy, a therapeutic boarding school that marketed itself as a sanctuary for troubled teenage girls. But the school’s placid setting belied a much darker
reality according to many of its former students. In an AZ Mirror story published in July, former students, many of them now adults, recounted stories of abuse and trauma they suffered while attending the school. (See “‘It was a cult’: Traumatizing
troubled teens,” by Jerod MacDonald-Evoy, AZ Mirror, July 15, 2024.)
One former student, Katie Farran, vividly detailed her experience at Spring Ridge Academy as akin to being in a cult. Farran told the AZ Mirror how staff at the school used isolation, emotional manipulation and punitive measures described as “therapy”
to control and traumatize its students. Her experience, along with those of others, painted a grim picture of life at the academy where the promise of therapeutic support was overshadowed by abuse and neglect. (See “‘It was a cult’: Traumatizing
troubled teens.”)
A flurry of recent news reports, documentaries such as a Netflix’s, “The Program: Cons, Cults and Kidnapping,” and “Hell Camp,” and advocacy by celebrities like Paris Hilton, have put purveyors of youth behavioral programs like Spring Ridge Academy in
an uncomfortable spotlight. These stories have drawn attention to the industry’s therapeutic practices, which are often sold to desperate parents as solutions to their children’s behavioral and substance use problems. But along with the stories of
abuse are accusations of deceptive marketing and other fraudulent practices. A recent lawsuit brought by a parent of a former Spring Ridge Academy student and a report by the U.S. Senate Finance Committee reveal how many of these programs charge exorbitant
fees for their services without delivering the high-quality care and effective treatment they claim to provide. (See “Senate Investigation Slams Residential Treatment Centers for Children as ‘Warehouses of Neglect’,”
by Michael Fitzgerald and Sara Tiano, The Imprint, June 12, 2024; “Warehouses of Neglect: How Taxpayers Are Funding Systemic Abuse in Youth Residential Treatment Facilities,” A Senate Committee
on Finance Staff Report, 2024; and “As ‘troubled
teen’ industry scrutiny builds, litigation follows,” by Jenna Greene, Reuters, July 12, 2024.)
The ‘troubled teen’ industry
Spring Ridge Academy, which officially closed its doors in 2023, was just one of many youth behavioral and residential therapy programs collectively known as the “troubled teen” industry (TTI). According to Breaking Code Silence, an advocacy group for
people who’ve attended TTI programs, there are thousands of such facilities operating throughout the U.S. (See “The Troubled Teen Industry.”) The American Bar Association reported in 2021
that anywhere from 120,000–200,000 children in the U.S. attend a TTI-type program. (See “Five Facts About the Troubled Teen Industry,” by Catherine E. Krebs, Oct. 22, 2021.)
The industry has its roots in a Santa Monica, California, drug rehabilitation program called Synanon, founded by Charles Dederich in 1958. Dederich’s group therapy method, known as the “The Game,” consisted of patients humiliating one another and calling
out one another’s flaws. Synanon gained popularity in the 1960s and even inspired a Hollywood movie. But Synanon’s methods would soon fall out of favor. Studies found that Dederich’s style of therapy, aptly named “attack therapy,” could cause psychological
damage in patients. Synanon also came to be seen as a cult because of its use of isolation, sleep deprivation and manual labor tactics — abuse many former troubled teen program attendees say they experienced. (See “‘It was a cult’: Traumatizing
troubled teens.”)
Synanon shut down in 1991 but not before it inspired others to start programs using its “tough love” methods. Many of these programs gained traction in the 1980s and were directed at troubled teenagers, who, advocates said, needed strict discipline to
reform their behaviors. Over the decades, the troubled teen industry evolved into a money-making powerhouse, raking in billions of dollars a year with facilities promising to cure a raft of behavioral and psychological problems. These programs often
operate in remote locations, far from the watchful eyes of regulators and the public. (See “‘It was a cult’: Traumatizing
troubled teens”; “‘I Was Forced To Sculpt My Rape’: What Is Happening Inside The Troubled Teen Industry?” by Elizabeth Gulino, Refinery 29, June 29, 2021; and “Breaking Code Silence Takes On the Troubled Teen Industry,” by Olivia Wagner, Treatment Magazine, March 28, 2022.)
Different types of programs fall under the troubled-teen-industry umbrella. Boarding schools like Spring Ridge Academy market their facilities as structured environments where teens receive education and therapy. Wilderness programs take a different approach,
using nature and survival skills to instill discipline and self-reliance in young people. Hilton attended one of these programs in Utah when she was 17. Boot camps, modeled after military training, focus on rigorous physical activity and strict discipline.
Despite their varied approaches, many of these programs share common problems: lack of transparency, insufficient staff training and minimal regulatory oversight. (See “How Troubled Teens Became a Billion-Dollar Industry,”
by CT Jones, Rolling Stone, Jan. 7, 2024 and “Troubled US teens left traumatised by tough love camps,” by Kelly-Leigh Cooper, BBC News, June 18, 2021.)
A history of lawsuits
TTI programs rely on parents who’ve exhausted other resources looking for help for their children struggling with substance use, mental health and behavioral problems. According to society magazine Town & Country, published in August 2024, many of these
programs target wealthy families who have the deep pockets to pay thousands of dollars a month for the facilities and inpatient treatments. As Hilton described in her memoir “Paris,” an educational consultant advised her parents to send her to an
emotional growth boarding school. “They were shown these beautiful brochures with kids smiling and on horses with rainbows in the background. They thought I was going to these amazing boarding schools, because that’s what they were told.” Instead,
Hilton says she suffered extreme abuse and trauma. (See “Into the Woods: How the Troubled-Teen Industry Preys on the One Percent,” by Ian Frisch, Aug. 18, 2024.)
Even as these programs entice the well-off, many families still go into debt paying the tuition without the results they were promised. Instead of helping teens with specialized care and support, lawsuits reveal horrific accounts of abuse — isolation,
corporal punishment, sexual assaults and even deaths. Spring Ridge Academy is the latest in a string of high-profile lawsuits over the years that have put into sharp relief the types of abuses — financial and otherwise — common in these programs.
(See “As ‘troubled teen’ industry scrutiny builds, litigation follows,” by Jenna Greene, Reuters, July 12, 2024 and “Warehouses of Neglect: How Taxpayers Are Funding Systemic Abuse in Youth Residential Treatment Facilities.”)
Lawsuits over the years include those against the Utah-based Worldwide Association of Specialty Programs (WWASP) and the notorious Élan School. Founded in the 1990s, WWASP operated a network of facilities worldwide. All those programs were eventually
shut down due to lawsuits and investigations that revealed systemic abuse. Former students reported being subjected to physical punishment, solitary confinement and psychological torture. Notable closures include Casa by the Sea in Mexico, which Mexican
authorities raided in 2004, and Tranquility Bay in Jamaica, which closed in 2009 after numerous abuse allegations came to light. (See “2 Foreign Units of Troubled U.S. Academy Are Closed,”
by Tim Weiner, The New York Times, Sept. 13, 2004; “Teen program in Mexico forced to close,” by Nancy Perkins, Deseret News, Sept. 14, 2004, tinyurl.com/2s3umpwp; and “‘I’d rather die than go back’: Jamaica’s school for troubled US boys,”
by Decca Aitkenhead, The Sunday Times, July 13, 2024.)
The Élan School, located in Maine, is often considered one of the most notorious troubled teen facilities. It eventually closed in 2011 after years of allegations of abuse and mistreatment of students stretching back to the 1970s. The school, which operated
for more than four decades, was known for its harsh tactics, including forced boxing matches between students that resulted in one student’s death. Numerous investigations, a murder trial and an online campaign by a Reddit user claiming to be a former
student revealed a culture of cruelty and neglect, ultimately leading to the school’s demise. (See “The Controversial Story Of The Élan School, The ‘Last Stop’ For Troubled Teens In Maine,”
by Kaleena Fraga, ATI, Jan. 12, 2022.)
According to legal experts, the suit against Spring Ridge Academy represents an important shift in how allegations of abuse and other forms of mistreatment at troubled teen programs are being addressed — through claims of fraud. While it’s rare for plaintiffs
to actually win judgments against troubled teen programs unless a fatality is involved, suing for fraud appears to be a formidable strategy. (See “As ‘troubled
teen’ industry scrutiny builds, litigation follows” and “‘They tried everything ... to break me’: Boarding school students describe
harsh treatment,” by Hannah Dreyfus and Madeleine Parrish, AZ Republic, July 19, 2024.) Kimberly Sweidy, the parent who sued Spring Ridge Academy, claimed that when she enrolled her then 17-year-old daughter in the school in 2019, she was told
that her daughter would receive tailored-to-her mental health treatment and therapy. But, as Sweidy said in the lawsuit, she paid $9,000 a month for unqualified employees who “manipulated, coerced and abused” her daughter and denied her food and bathroom
privileges. In June 2024, a federal jury in Phoenix, Arizona, awarded Sweidy $50,000 in consequential damages and $2.5 million for two fraud claims. (See “As ‘troubled
teen’ industry scrutiny builds, litigation follows” and “‘They tried everything ... to break me’: Boarding school students describe
harsh treatment.”) In the complaint, Sweidy claimed Spring Ridge attracted parents “through fraudulent emails, literature and advertisements about their specialty services” such as evidence-based family therapy and a college preparatory education.
She also argued in the suit that the school engaged in a “pattern of isolating students from their parents to aid in concealing their deceit and fraud.” (See “‘They tried everything ... to break me’: Boarding school students describe
harsh treatment.”)
Deceptive marketing practices and misuse of government funds
In 2008, a U.S. Government Accountability Office (GAO) investigation found that a number of troubled teen facilities engaged in aggressive marketing strategies, making grandiose claims about their success rates and therapeutic methodologies without any
empirical evidence to support their practices. According to the GAO report, facilities often advertised state-of-the-art facilities and highly qualified staff, but operated under substandard conditions and employed staff members with inadequate training
or the necessary qualifications to provide effective care. The GAO reported that deceptive marketing practices involved potential fraud, false statements and misleading claims regarding tax deductions, educational services and admissions policies
alongside undisclosed conflicts of interest. (See “Residential Programs: Selected Cases of Death, Abuse, and Deceptive Marketing,” GAO, April 24, 2008.)
A June 2024 report from the U.S. Senate Finance Committee concluded that TTI programs often misuse government funding to increase their profits. Some facilities in the U.S. receive government funding for their programs through Medicaid — a program that
pays for the health care of low-income Americans, including children — and the Social Security Act. The government often pays TTI providers per diems for many of the children in their care. Amid its findings of physical, sexual and emotional abuse
by staff members, improper use of restraints and seclusion, and inadequate treatment and supervision of children in their charge, the committee found that providers often maximize the per diems for profit by filling their facilities to capacity and
reducing the number and quality of the staff they employ. According to the committee, “The harms children in RTFs [residential treatment facilities] experienced are the direct, causal result of an operating model that incentivizes providers to optimize
revenues and operating and profit margins.” (See “Warehouses of Neglect: How Taxpayers Are Funding Systemic Abuse in Youth Residential Treatment Facilities,” A Senate Committee on Finance
Staff Report, 2024.)
Echoing the 2008 GAO report, the Senate Finance Committee found that children in TTI programs don’t get the intensive and individualized care often marketed to parents. The committee noted instances of programs failing to individualize treatment plans
and provide therapeutic treatments they say they’ll administer, despite being reimbursed by the government for those therapeutic treatments.
The U.S. Department of Justice (DOJ) has taken behavioral treatment programs to task in recent history. In 2020, the DOJ sued Universal Health Services, Inc. (UHS) under the False Claims Act for allegations that the company billed for medically unnecessary
behavioral health services and didn’t provide the level of care it advertised. According to the DOJ, UHS induced patients to seek treatment at the site by providing free transportation. UHS settled with the U.S. government for $117 million. It also
paid an almost $30 million settlement to resolve 18 cases across numerous jurisdictions. (See “Warehouses of Neglect: How Taxpayers Are Funding Systemic Abuse in Youth Residential Treatment Facilities”
and “Universal Health Services, Inc. to Pay $117 Million to Settle False Claims Act Allegations,” U.S. Attorney’s Office, Eastern District of Pennsylvania, press release, July 10, 2020.)
The role of regulatory efforts
The Arizona Department of Health Services investigated Spring Ridge Academy several times during the boarding school’s 16-year existence, citing the facility for lacking critical documentation and not preventing a teen from attempting suicide. But even
with some oversight, the school was still able to operate for many years with little recourse for the teens who say they were traumatized during their time there. (See “‘It was a cult’: Traumatizing
troubled teens.”) Indeed, regulatory oversight of the troubled teen industry is inconsistent at best. In some states, robust regulations and regular inspections help ensure a minimum standard of care. In many others, facilities operate with little
to no oversight, exploiting regulatory loopholes to avoid scrutiny. In some states, facilities operated by religious organizations aren’t required to be licensed. This patchwork regulatory framework allows abusive practices to continue unchecked in
many parts of the U.S. Compounding the oversight conundrum is the fact that many facilities are in remote areas, which can make regular inspections logistically difficult. Furthermore, the industry’s powerful lobbying presence has successfully resisted
many regulatory efforts, arguing that stricter regulations would stifle their ability to operate and help troubled teens. (See “The Cult That Spawned the Tough-Love Teen Industry,” by Maia
Szalavitz, Mother Jones, September/October 2007.) According to the U.S. Senate Finance Committee report, some facilities have evaded oversight by exploiting corporate structures. The committee highlighted the example of Jay Ripley, CEO of Sequel Youth
and Family, who sold a majority stake in the company to a private equity firm in 2017. Ripley subsequently sold 13 of Sequel’s facilities to a new company that the CEO created in 2021 after numerous allegations of abuse and neglect. (See “Warehouses of Neglect: How Taxpayers Are Funding Systemic Abuse in Youth Residential Treatment Facilities.”)
However, advocates, survivors and lawmakers are calling for a unified approach to regulate the troubled teen industry. They argue that a federal standard is necessary to ensure consistent and effective oversight. This includes standardized staff training,
regular and unannounced inspections and a transparent reporting system for incidents of abuse and neglect. (See “Troubled US teens left traumatised by tough love camps” and “‘I Was Forced To Sculpt My Rape’: What Is Happening Inside The Troubled Teen Industry?”) In its report, the U.S. Senate Finance Committee recommends that government payers increase their scrutiny of these facilities and that states
improve their oversight activities so that programs must raise their standards. The committee report also advises that regulators refer all suspected Medicaid fraud to the appropriate fraud control unit. According to the committee, states need to
revamp their reporting requirements for youth behavioral programs, increase the frequency of unannounced site visits and determine ways to gather information from staff and residents of the facilities on their experiences of abuses. The report also
recommends that federal agencies require more robust data reporting from programs, with detailed information about facility ownership and payment methods along with their reporting of treatments, serious incident reporting and other information related
to youth in their programs. Accrediting bodies should continue to closely monitor facilities that have been found to be noncompliant with regulations. (See “Warehouses of Neglect: How Taxpayers Are Funding Systemic Abuse in Youth Residential Treatment Facilities.”)
Lawmakers in the U.S. have introduced legislation aimed at regulating the troubled teen industry. The Stop Child Abuse in Residential Programs for Teens Act is one example, seeking
to establish nationwide standards and accountability measures. The bill, first introduced in U.S. Congress in 2023, proposes mandatory background checks for staff, regular inspections and strict reporting requirements for incidents of abuse. Despite
bipartisan support, the bill has faced delays and opposition from industry lobbyists.
In addition to federal efforts, some states have taken steps to regulate these facilities. For instance, California lawmakers are pushing for Senate Bill 1043, a bipartisan effort aiming to protect youth in short-term residential therapeutic programs
licensed by the California Department of Social Services. The bill mandates the creation of a public dashboard by 2026 to report on the use of restraint and seclusion rooms, especially when resulting in serious injuries or death. (See “Paris Hilton
Backs California Bill Requiring Sunshine on ‘Troubled Teen Industry’,” by Molly Castle Work, California Healthline, April 16, 2024.) Additionally, it requires foster parents and guardians to be notified when such measures are used on minors. Utah,
where many troubled teen programs have proliferated over the decades, has recently enacted laws to crack down on the industry in the state. (See “Utah increased its oversight of its troubled-teen industry. Has it worked?”
by Jessica Miller and Will Craft, The Salt Lake Tribune, April 12, 2022.)
Remaining vigilant
Widespread reports of abuse in the troubled teen industry along with lawsuits against individual programs have exposed deceptive practices and the need for greater industry oversight. The practices of the worst actors in the industry overshadow the legitimate
therapeutic programs that strive to help at-risk youth, fueling negative perceptions of the industry and making it harder for families in need to feel safe trusting their children with licensed professionals and care facilities that are equipped to
help.
Abusive programs with fraudulent practices can take an enormous toll on society. Children experience life-long trauma from the mistreatment they experience at these facilities, and their families are saddled by the monetary costs of sending them to these
programs. Taxpayers are often left shouldering the enormous losses when programs misuse government funds. These expenses accumulate rapidly as authorities work to uncover the extent of abuse and fraud, requiring extensive resources to conduct thorough
investigations and ensure justice is served. Legal proceedings can be prolonged and complex, involving multiple parties and jurisdictions, thereby increasing the financial burden on the judicial system.
The economic burden on families can be so substantial that parents deplete their savings and incur debt to afford these programs. The financial strain on families can even exacerbate the very issues that led them to seek help in the first place. For instance,
the average cost of these programs can range from $3,000 to $5,000 per month, depending on the facility and the services offered. Many families take out loans or refinance their homes to cover these expenses, only to find that their children emerge
from the programs more traumatized than when they entered. (See “Troubled Teen Industry Statistics Revealed: Alarming Facts and Figures,” by Alexander Eser, Worldmetrics.org, July 23, 2024.)
It’s crucial to remain vigilant and proactive in addressing the systemic fraud and abuse rampant in the troubled teen industry. The stories emerging from institutions like Spring Ridge Academy serve as a stark reminder of the consequences when regulatory
oversight is lacking and financial gain is prioritized over the well-being of vulnerable youth.
Rihonna
Scoggins is the content
manager for the ACFE. Contact her at rscoggins@ACFE.com.