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Owners of Morehead addiction recovery center face controlled substance-related charges

Samantha Morrill

The owners of Edgewater Recovery, based in Morehead, were arrested over the weekend. The arrests come just days after the Department of Justice announced they’d reached a multi-million-dollar settlement agreement with Edgewater over False Claims Act violations.

John and Myra Elam were arrested Saturday in Bath County. John Elam is charged with operating a motor vehicle under the influence of a controlled substance. Myra Elam faces a charge of public intoxication of a controlled substance, excluding alcohol.

Officers with the Owingsville Police Department said a caller made a complaint about a vehicle driving recklessly on Interstate 64. Officers reported when they caught up to the car, it was stopped at a gas station and John Elam was standing in the middle of the road. According to an arrest citation, both John and Myra Elam were showing signs of intoxication, including slurred speech and stumbling movements.

On Tuesday, January 30, the United States District Court for the Eastern District of Kentucky announced Edgewater Recovery Center LLC agreed to pay the government $2.2 million to resolve its liability under the False Claims Act. According to the agreement, Edgewater ordered complex urine drug tests for all its patients on a weekly basis without considering if they were needed and in many cases not using the results. The expensive tests were then billed to Medicare and Medicaid.

In a statement to WMKY, counsel for Edgewater Recovery Center clarified that the company did not admit False Claims Act liability, but decided to settle to reduce the cost and time associated with litigation. Further, counsel said Edgewater has stepped up compliance and professionalism in the last year to continue providing service.

In response to the arrest of owners John and Myra Elam, counsel for Edgewater said the two have not been actively involved in the day-to-day operations of the company for some time and they are prepared to continue providing service to their patients in spite of the recent arrest.