Disgraced Palm Beach doctor claims lying sober home mastermind put him away
One-time colleagues Mark Agresti, the doctor, and Kenneth Bailynson, the sober home operator, duke it out in criminal court.
A federal judge showed no mercy last year when he sentenced Dr. Mark Agresti to eight years in prison after the once-respected psychiatrist was convicted of 12 counts of health care fraud for ordering unnecessary tests for those struggling with addiction.
Shunning favors often granted to white-collar criminals, U.S. District Judge Rodolfo Ruiz II in May 2022 ordered that Agresti be immediately taken to prison instead of allowing him to remain free on bond while he appealed his conviction for his role in a $31 million insurance scheme.
But, less than three months after the 60-year-old Agresti was sentenced, neighbors in Palm Beach reported seeing him out and about on the island. Records from the Federal Bureau of Prisons showed he was released on Aug. 19. Corrections officials declined comment, saying they just follow judicial orders.
While federal court dockets revealed a series of documents were filed on Aug. 19 in Agresti’s case, all were sealed. Typically, motions and orders to allow someone to be released on bond are available to the public. Agresti’s attorneys declined to explain why the documents were sealed or why Agresti had been released. The state never took away his medical license.
Then last month, Agresti’s attorneys filed a stunning 20-page motion, shedding light on the mystery.
The one-time director of psychiatry at the former Columbia Hospital in West Palm Beach was released while FBI agents spent months investigating claims that Agresti was the victim of an elaborate plot to convict him of a crime he insists he didn’t commit.
To win a reduced sentence for masterminding the insurance scam, notorious sober home owner Kenneth Bailynson admitted in text messages that he lied to a federal jury about Agresti’s role as medical director of his farflung operation, attorneys Richard Klugh and Greg Rosenfeld wrote.
“Bailynson’s written and verbal admission of perjury to make Agresti look like a criminal at trial … constitutes one of the most significant post-trial revelations of perjury in reported case law,” Klugh wrote in the motion, asking that Agresti be granted a new trial.
In an interview, Bailynson’s lawyer Jamie Benjamin scoffed at Klugh’s claims.
“Richard Klugh is a wonderful fiction writer,” Benjamin said of the motion that details Bailynson’s alleged misdeeds.
Bailynson cuts deal with prosecutors
Known for his ferocious temper, Bailynson took over a West Palm Beach condominium, snapping up 38 of the 84 units for his sober home, The Palm Beach Post reported. He turned the clubhouse into a urine testing center and hired armed guards to patrol the grounds. Residents said they were petrified of him. It all unraveled after an FBI raid in September 2014.
Still, despite Bailynson’s reign of terror at the complex, Benjamin insisted he didn’t lie to a federal jury.
But Bailynson had a powerful incentive to make his testimony against Agresti as gripping as possible.
Facing a 20-year prison sentence if convicted, Bailynson cut a deal with prosecutors. If he pleaded guilty to one of the 14 charges he faced and testified against Agresti, they would recommend that his sentence be capped at 10 years.
As the star witness during Agresti’s three-week trial, Bailynson’s testimony was explosive. He readily admitted he was greedy, a liar and cared little about helping people overcome their addictions. The 50-year-old certified public accountant insisted Agresti signed on to be medical director of Good Decisions Sober Living, knowing the main purpose was to rake in big bucks.
“We are all guilty — me, Dr. Agresti and the others who were charged as well,” Bailynson told the jury, referring to two underlings in the operation who were also indicted.
But, he emphasized, Agresti’s involvement was key. If Agresti didn’t order thousands of expensive urine screens for sober home residents, the insurance companies would never have paid up.
Bailynson waved off defense attorney Richard Lubin when he asked why the jury should believe an admitted liar.
“I don’t have any skin in the game if your client gets convicted or not,” Bailynson said. “My sole obligation is to tell the truth.”
$9,000 in cash payments?
However, Klugh claims evidence uncovered by the FBI after Agresti was sentenced to eight years in prison and Bailynson to six tells a different story.
Text messages Bailynson sent a felon he met in jail prove he lied, Klugh said.
In them, Bailynson brags about telling the jury that Agresti insisted on being paid $9,000 in cash to continue to order every-other-day urine tests of sober home residents. Bailynson testified that the three cash payments he made were on top of the monthly checks he sent Agresti to oversee the testing of residents of the rundown condominium complex in West Palm Beach.
The lie, Bailynson said in the texts, was necessary to ensure the psychiatrist was convicted and that Bailynson received a light sentence.
“Why do you think I said the stuff about the cash?” he texted Willie Colon, the felon turned friend. Bailynson noted that he wouldn’t have “gotten 6 (years) if (Agresti) was found not guilty.”
In an interview with FBI agents, Colon said Bailynson made similar comments during a phone conversation.
“Bailynson told Colon that he never paid the doctor in cash and that he made it up because the government did not have anything else on the doctor,” according to a report FBI agents filed, detailing their interview with Colon.
Cash rentals to immigrants
Matthew Noel, who worked at Good Decisions and spent nine months in prison after pleading guilty to a charge of conspiracy to commit healthcare fraud, was also interviewed by FBI agents, Klugh wrote.
While Noel wasn’t asked about the cash payments, he told agents that Bailynson told him he had other plans to minimize the impact of his arrest.
In a prison conversation with Bailynson, Noel said his former boss told him “he is planning an even more egregious scheme than his healthcare fraud, and that he intends to hide his assets from (the government),” Klugh wrote, referring to an FBI report of agents’ interview with Noel.
As part of his plea deal, Bailynson had to turn over to the government the fruits of his ill-gotten gains. He said he made between $13 million and $15 million.
Another one of Bailynson’s associates told the FBI that Bailynson rented apartments to undocumented immigrants and demanded they pay in cash. Renee Favor estimated she collected $300,000 in cash from Bailynson’s illegal tenants in less than two years.
Favor, who sometimes drove Bailynson to his meetings with federal prosecutors, told FBI agents that Bailynson “was focused on the doctor and wanted to ‘give it to the doctor,’” Klugh wrote.
‘We believe it’s all untrue’
Bailynson’s lawyer, Benjamin, questioned why Ruiz or anyone would believe those assembled by Agresti’s defense team to testify against Bailynson.
“They are greedy people who tried to take advantage of Mr. Bailynson while he was incarcerated,” Bailynson said.
In an interview with FBI agents, Bailynson claimed Favor and Colon stole roughly $100,000 from the rent they collected for him. He also accused Noel of “shaking” him down for money, Klugh wrote.
In prison, Noel demanded that Bailynson pay for his attorney and reimburse him for the wages he lost while he was in lockup, Benjamin said.
Bailynson falsely told Colon and others he planned to frame Agresti because he didn’t want fellow inmates to know he was cooperating with the government, Benjamin said. In addition to testifying against Agresti, he agreed to testify against others who were involved in similar healthcare fraud schemes.
“If people knew the truth about his cooperation, it would be a danger to him,” Benjamin said.
Besides, he said, as felons, Colon and Noel, are unlikely to be believed.
“We believe it’s all untrue,” Benjamin said of Klugh’s allegations. “(Bailynson) maintains that he testified truthfully — that every word of his testimony in court was true.”
Dead bagman and a Yacht Club lunch
But, Klugh said in the motion, Agresti’s defense team uncovered other evidence that raises questions about the veracity of Bailynson’s testimony.
For instance, Bailynson claimed that a month after he made the second $9,000 payment to Agresti in late May 2014, they had lunch at the Palm Beach Yacht Club, where the doctor was a member. Club records show Agresti didn’t have lunch at the club in June or July 2014, Klugh said.
Bailynson also testified that a man he knew only as “Black Fred” put at least one of the cash payments in Agresti’s car when it was parked at the doctor’s office. Bailynson claimed Fred died about two months before the trial. The death of the mysterious Fred was convenient because Agresti’s defense team couldn’t interview him to challenge Bailynson’s assertions, Klugh wrote.
But, after the trial, the defense lawyers tried to reconstruct how the payment occurred without Agresti’s staff seeing Fred.
The mysterious bagman would have had to knock on the window of Agresti’s office to signal he was there so Agresti would unlock his car. Fred would then have had to walk to the parking lot on the other side of the building to put the money under the floor mat.
Given the distance between the office and the parking lot, “it is unclear whether a key fob would have worked to unlock Agresti’s car,” Klugh wrote. “The physical layout of the office and parking made the story of drops by ‘Fred’ strained at best.”
From $1,750 a month to $9,000
One of the reasons the defense team was forced to reconstruct Bailynson’s testimony months after the trial is that they were unaware he was going to claim he had made cash payments to Agresti, Klugh said.
Federal prosecutors failed to disclose a report in which Bailynson told FBI agents about the payments. When Bailynson revealed them during his testimony, the defense team could have asked for a mistrial, claiming prosecutors failed to turn over key evidence.
The defense opted not to do so because of the “substantial costs to the parties, the jurors, and the court,” Klugh wrote.
Instead, they called Agresti to the witness stand to refute Bailynson’s testimony. Agresti insisted he never demanded — or received — cash.
Initially, he testified Bailynson paid him $1,750 a month to serve as medical director of the sober home. Later, as the number of people living at Good Decisions swelled from roughly 25 to 250, he asked that his salary be bumped to $9,000 a month.
He insisted he was never part of a conspiracy to bilk insurance companies. He ordered frequent testing of sober home residents, believing it was the only way to keep them from relapsing and possibly dying.
During the nearly three years he worked for Bailynson, he estimated he made about $50,000. His defense team argued that Agresti wouldn’t have put his medical license at risk for such a paltry sum.
Further, they pointed out, Bailynson admitted he was the biggest financial winner of the scheme. He estimated he made at least $13 million. He not only owned the sober home but the lab where the urine was tested.
But, during closing arguments, federal prosecutors insisted Bailynson had no reason to lie. Agresti, however, had every reason to do so.
“Those $9,000 in cash, those payments, happened,” prosecutors told the jury. “All of the evidence in this case backs up Mr. Bailynson, the so-called con man and liar.”
Doctor offers lie detector test
As is typical, federal prosecutors declined to comment on Klugh’s allegations. They will respond in a court filing by June 23.
But, they have not objected to Klugh’s request for a hearing. They immediately notified Agresti’s lawyers about the text messages Colon provided the FBI months after Agresti was briefly sent to prison.
Agresti’s lawyers declined to comment on their claims. To bolster their arguments about Bailynson’s deceit, they claimed Agresti had passed a polygraph test.
“The examination yielded reliable confirmation that there is not a grain of truth in Bailynson’s lies about cash payments, lies that severely prejudiced Agresti and benefitted Bailynson,” Klugh wrote.
Attorney Tama Kudman, who represented Noel, described the entire saga as bizarre.
She declined to predict what might happen. Prosecutors could argue that Bailynson lied to Colon and the others but was truthful when he testified against Agresti. Or, they could charge Bailynson, who is scheduled to be released from prison in January 2025, with perjury.
But, regardless of what happens to Bailynson, the newfound evidence will complicate any future prosecution of Agresti. While state records show his medical license is still active, it doesn’t appear he is practicing.
All agree that his conviction wouldn’t have been possible without Bailynson’s testimony.
“Without Mr. Bailynson, there was no chance of a conviction,” Assistant U.S. Attorney James Hayes said during Bailynson’s sentencing hearing.
Judge Ruiz agreed. “I don’t for a second doubt that without Mr. Bailynson’s cooperation that the trial of Dr. Agresti would not come to pass,” he said.
Ruiz on August 16 will consider the new evidence Agresti’s legal team has gathered and decide whether the doctor deserves a new trial. But, he already knows a lot about Bailynson.
Before handing Bailynson what he acknowledged might be considered a “light sentence,” Ruiz said he was stunned by Bailynson’s attitude, his avarice and his lack of empathy for others.
“There is a part of you that needs a lot of work,” Ruiz said. “It deals with that outsmarting others, that greed, and that anger which led you to do this and led you really to manipulate a lot of individuals.”