Sovereign Health closes facilities

Embattled Southern California addiction treatment provider Sovereign Health is closing its facilities, according to a report published on Wednesday by the Orange County Register.

The Register obtained a letter from CEO Tonmoy Sharma to Sovereign employees in which the executive informed staff of the decision, citing a lack of funding to continue business operations and an inability to make payroll.

Sovereign has come under fire on several fronts in recent years. In 2017, federal officials executed search warrants at several of the company’s treatment centers and its office in San Clemente, Calif. Sovereign later alleged in a motion filed with the U.S. District Court of the Central California District that the sealed affidavit authorizing the raid contained false and misleading information, as well as information regarding a civil lawsuit between Sovereign and insurer Health Net, Inc. Sharma called the raid “ridiculous” and the way it was executed “a disgrace” in a statement.

In 2016, Sovereign and its affiliates filed a $55 million lawsuit against Health Net, claiming the insurance company failed to pay for medical services rendered. Health Net filed a countersuit in 2017, alleging that Sovereign engaged in massive fraud, a claim denied by Sovereign.