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GAO Testimony before US House Subcommittees Re Residential Programs Cases of Death & Abuse, GAO, 2008

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United States Government Accountability Office

GAO

Testimony
Before the Committee on Education and
Labor, House of Representatives

For Release on Delivery
Expected at 10:00 a.m. EDT
Thursday, April 24, 2008

RESIDENTIAL PROGRAMS
Selected Cases of Death,
Abuse, and Deceptive
Marketing
Statement of Gregory D. Kutz, Managing Director
Forensic Audits and Special Investigations

GAO-08-713T

April 24, 2008

RESIDENTIAL PROGRAMS
Accountability Integrity Reliability

Highlights

Selected Cases of Death, Abuse, and Deceptive
Marketing

Highlights of GAO-08-713T, a testimony
before the Committee on Education and
Labor, House of Representatives

Why GAO Did This Study

What GAO Found

In October 2007, GAO testified
before the Committee regarding
allegations of abuse and death in
private residential programs across
the country such as wilderness
therapy programs, boot camps, and
boarding schools. GAO also
examined selected closed cases
where a youth died while enrolled
in one of these private programs.

In the eight closed cases GAO examined, ineffective management and
operating practices, in addition to untrained staff, contributed to the death
and abuse of youth enrolled in selected programs. The practice of physical
restraint also figured prominently in three of the cases. The restraint used for
these cases primarily involved one or more staff members physically holding
down a youth. See the table below for detailed information related to three of
the case studies.

Many cite positive outcomes
associated with specific types of
residential programs. However, due
to continuing concerns about the
safety and well-being of youth
enrolled in private programs, the
Committee requested that GAO
(1) identify and examine the facts
and circumstances surrounding
additional closed cases where a
teenager died, was abused, or both,
while enrolled in a private program;
and (2) identify cases of deceptive
marketing or questionable
practices in the private residential
program industry.
To develop case studies of death
and abuse, GAO conducted
numerous interviews and examined
documents from eight closed cases
from 1994 to 2006. GAO used
covert testing along with other
investigative techniques to identify,
for selected cases, deceptive
marketing or questionable
practices. Specifically, posing as
fictitious parents with fictitious
troubled teenagers, GAO called 14
programs and related services.
GAO did not attempt to evaluate
the benefits of private residential
programs and its results cannot be
projected beyond the specific
programs and services that GAO
reviewed.
To view the full product, including the scope
and methodology, click on GAO-08-713T.
For more information, contact Gregory Kutz at
(202) 512-6722 or kutzg@gao.gov.

Examples of Case Studies GAO Examined
Sex/age
Date of
Case details
death/abuse
Male,
1994 to 1998 •
Victim was restrained over 250 times while attending the program;
14–18
in at least two cases, restraint lasted over 12 hours
•
One method of restraint included wrapping the victim in a blanket
and tying him up
•
Was required to attend the program for 4 years and was held
th
against his will after his 18 birthday
Male, 16
Mar. 1998
•
For several weeks, victim complained of chest pain and difficulty
breathing
•
Staff forced him to do push-ups and carry cinder blocks as
punishment for refusing an assigned task
•
Victim died from an accumulation of infectious pus in his chest
•
Autopsy found more than 70 injuries on his body, including some
from blunt force
Male, 16
Feb. 2006
•
Three staff members held the victim facedown to restrain him
•
After 10 minutes of restraint, victim said he could not breathe and
was eventually taken to the hospital
•
School was aware victim suffered from asthma, but staff members
who restrained him said they were not
•
Victim died of abnormal heartbeat
Source: Records including police reports, legal documents, and state investigative documents.

Posing as fictitious parents with fictitious troubled teenagers, GAO found
examples of deceptive marketing and questionable practices in certain
industry programs and services. For example, one Montana boarding school
told GAO’s fictitious parents that their child must apply using an application
form before they are admitted. But after a separate call, a program
representative e-mailed an acceptance letter for GAO’s fictitious child even
though an application was never submitted. In another example, the Web site
for one referral service states: “We will look at your special situation and help
you select the best school for your teen with individual attention.” However,
GAO called this service three times using three different scenarios related to
different fictitious children, and each time the referral agent recommended a
Missouri boot camp. Investigative work revealed that the owner of the referral
service is married to the owner of the boot camp. GAO also called a program
established as a 501(c)(3) charity that advocated a potentially fraudulent tax
scheme. The scheme involves the friends and family of a child making taxdeductible “donations” to the charity, which are then credited to an account in
the program the child is enrolled in. GAO referred this charity to the Internal
Revenue Service for criminal investigation.
United States Government Accountability Office

Mr. Chairman and Members of the Committee:
Thank you for the opportunity to continue the discussion of private
residential programs for troubled youth that we began last fall.1 In the
context of this and our prior testimony, we are using the term residential
program to refer to those private entities across the country and abroad
that call themselves wilderness therapy programs, therapeutic boarding
schools, academies, behavioral modification facilities, ranches, and boot
camps, among other names. Many of these programs are privately owned
and operated. Private residential programs typically market their services
to the parents of troubled teenagers—boys and girls with a variety of
addiction, behavioral, and emotional problems—and provide a range of
services, including drug and alcohol treatment, confidence building, and
psychological counseling for illnesses such as depression and attention
deficit disorder. Parents trying to help their troubled child may also seek
help from referral services and educational consultants, which generally
purport to assess the needs of the child and recommend an appropriate
program.
Many cite positive outcomes associated with specific types of residential
programs. However, in our previous testimony, we identified thousands of
allegations of abuse, some of which resulted in death, at residential
programs across the country and in American-owned and Americanoperated facilities abroad. We also examined 10 closed civil or criminal
cases where a teenager died while enrolled in a private program and found
significant evidence of ineffective management in most of the 10 cases,
with program leaders neglecting the needs of program participants and
staff. This ineffective management compounded the negative
consequences of (and sometimes directly resulted in) the hiring of
untrained staff; a lack of adequate nourishment for enrolled children; and
reckless or negligent operating practices, including a lack of adequate
equipment.
Due to your continuing concern about the safety and well-being of youth
enrolled in private residential programs, and to assist the Committee in its
consideration of the need for federal legislation in this area, you requested
that we (1) identify and examine the facts and circumstances surrounding
additional closed cases where a teenager died, was abused, or both, while

1

GAO, Residential Treatment Programs: Concerns Regarding Abuse and Death in
Certain Programs for Troubled Youth, GAO-08-146T (Washington, D.C.: Oct. 10, 2007).

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GAO-08-713T

enrolled in a private program; and (2) identify cases of deceptive
marketing or other questionable practices in the private residential
program industry.
To identify case studies, we reviewed numerous closed criminal or civil
cases in which a court or state agency was asked to decide whether a
private residential program was responsible for the death or abuse of an
enrolled teenager. We also reviewed administrative cases where state
agencies made rulings regarding the death or abuse of a teenager. When
identifying cases, we specifically excluded public programs such as statesponsored foster programs, juvenile justice programs for delinquent youth,
or programs that exclusively treat psychological disorders or substance
abuse in a hospital setting. We also excluded cases related to the programs
we examined for our October 10, 2007, testimony. We focused on deaths
or instances of abuse between the years 1994 and 2006 to illustrate the
long-standing issues presented by private residential programs. We limited
our cases to closed criminal cases and, thus, did not include ongoing cases
from the last several years. We selected eight cases—four cases of death
and four cases of abuse—based on several factors including the victim’s
age, the program location, the type of program the victim attended, and
the date of death or abuse. We then examined, in more detail, the facts and
circumstances of the case. To validate the facts and circumstances, and to
the extent possible, we conducted interviews with related parties,
including current and former program staff and officials, attorneys and law
enforcement officials involved in the cases, and the parents of the victims.
Further, we reviewed available documentation to support the facts of each
case including, but not limited to, marketing materials, police reports,
autopsy reports, and state agency oversight reviews and investigations.
To identify cases of deceptive marketing or other questionable practices in
the private residential program industry, we used a variety of approaches
and investigative techniques. Posing as fictitious parents with fictitious
troubled children, our undercover investigators made telephone calls to a
nonrepresentative selection of 10 private residential programs and 4
referral services. Like legitimate parents with troubled teenagers, we
identified these programs and referral services through Internet searches
and magazine advertisements. To assess the accuracy and reasonableness
of the information we obtained during each undercover call, we performed
additional follow-up work that included, but was not limited to, making
additional undercover calls; comparing the information we received with
other marketing information provided by the program; reviewing relevant
laws, regulations, and trade organization statements; performing
announced, agreed upon site visits (i.e., not undercover); and speaking
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with cognizant state and federal officials, including the Internal Revenue
Service (IRS).
We performed our work from November 2007 through April 2008 in
accordance with the quality standards for investigations set forth by the
President’s Council on Integrity and Efficiency. As we noted in our prior
testimony, it is important to emphasize that residential programs are
intended to help youth with serious problems, including life-threatening
addictions and diseases. We did not attempt to evaluate the benefits of
residential programs in dealing with these serious problems. In addition, it
is not possible to generalize the results of our investigation as applying to
all residential programs, whether privately or publicly funded, or referral
services and educational consultants and others in the residential program
industry. Moreover, it is difficult to develop a picture of the overall
industry, its practices, and efforts to oversee it. For example, while states
often regulate publicly funded programs, a number of states do not license
or otherwise regulate certain types of private programs. GAO is
completing a more comprehensive review of state and federal oversight of
residential programs and expects to issue a report soon.

Summary of
Investigation

In the eight closed cases we examined, ineffective management and
operating practices, in addition to untrained staff, contributed to the death
and abuse of youth enrolled in selected programs. In the most egregious
cases of death and abuse, the cases exposed problems with the entire
operation of the program. The practice of physical restraint also figured
prominently in three of the cases. The restraint used for these cases
primarily involved one or more staff members physically holding down a
youth. Examples of some case studies follow:
•

A 16 year-old male who suffered from asthma and chronic bronchitis
complained of chest pain and had difficulty breathing for several
weeks. Staff at the Arizona boot camp he was attending punished him
for refusing to do an assigned task and forced him to do push-ups and
carry cinder blocks; meanwhile, a program nurse told him the
breathing problems were “in your head.” In March 1998, the victim died
from an accumulation of infectious pus in his chest, and an autopsy
found more than 70 injuries, including blunt-force injuries, on his
body—indicating he had been physically abused before his death.

•

A teenage male was required to attend a behavior modification
program in New Jersey for 4 years, and was held against his will after
he turned 18. Records show that the victim was restrained more than

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250 times while attending the program. Incident reports filed by
program staff document that after he had turned 18, the victim was
restrained on 26 separate days, with at least two restraints lasting more
than 12 hours. Restraints were imposed any time he showed reluctance
to participate in the program, and for other reasons; on one occasion,
he said he was wrapped in a blanket and tied up after attempting to
escape the program.
•

In February 2006, a 16-year-old male with a history of asthma became
unresponsive while being restrained at a Pennsylvania treatment
facility. He died 3 hours later in a hospital. An investigation into the
death found that the facility had documentation of the victim’s history
of asthma, and that its training manual for restraint procedures
cautioned against the risk of decreased oxygen intake during restraints
for youth with asthma. However, all three staff members involved in
the restraint that led to the victim’s death told investigators that they
were unaware of any medical conditions that needed to be considered
when restraining the victim.

In three of the eight cases we examined, the victim was placed in the
program by the state or in consultation with state authorities.
Posing as fictitious parents with fictitious troubled teenagers, we also
found examples of deceptive marketing and questionable practices in the
private residential program industry. Deceptive marketing included
potential fraud, false statements, and misleading representations related to
a range of issues including tax deductions, education, and admissions
policies. We also found undisclosed conflicts of interest. Examples of
deceptive marketing included the following:
•

One Montana boarding school told us that parents must submit an
application form in order for their child to be considered for admission
in the program. However, after a separate call by a fictitious parent, a
program representative e-mailed us that our fictitious daughter had
been approved for admission into the program and subsequently sent
an acceptance letter. This acceptance into the school was based on a
30-minute telephone conversation. We did not fill out any application
form.

•

The Web site for one referral service we called says: “We will look at
your special situation and help you select the best school for your teen
with individual attention.” However, we called this service three times
using three different scenarios related to different fictitious children,
and each time the referral agent recommended a Missouri boot camp.

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Investigative work revealed that the owner of the referral service is
married to the owner of the boot camp, but this relationship was never
disclosed during the call, raising the issue of conflict of interest.
•

The representative for a 501(c)(3) foundation suggested our fictitious
parents take advantage of a fund-raising approach that is potentially a
fraudulent tax scheme. The representative said that this “popular”
option would allow friends, family, business acquaintances, churches,
and other organizations to make tax-deductible donations that would
then be credited to our fictitious child’s tuition in a private program.
After we briefed an IRS official on the representation by this
foundation, he told us that the foundation is potentially committing tax
fraud and that those who obtain tax benefits for donations in the
suggested manner may be responsible for back taxes, as well as
penalties and interest.

A link to selected audio clips from these calls is available at:
http://www.gao.gov/media/video/gao-08-713t/

Background

Since the early 1990s, state agencies and private companies have set up
hundreds of residential programs and facilities in the United States. Many
of these programs are intended to provide a less restrictive alternative to
incarceration or hospitalization for youth who may require intervention to
address emotional or behavioral challenges. A wide array of government
or private entities, including government agencies and faith-based
organizations, operate these programs. Some residential programs
advertise themselves as focusing on a specific client type, such as those
with substance abuse disorders or suicidal tendencies.
As we reported in our October 2007 testimony, no federal laws define what
constitutes a residential program, nor are there any standard, commonly
recognized definitions for specific types of programs. For our purposes,
we define programs based on the characteristics we have identified during
our work. For example:
•

Wilderness therapy programs place youth in different natural
environments, including forests, mountains, and deserts. According to
wilderness therapy program material, these settings are intended to
remove the “distractions” and “temptations” of modern life from teens,
forcing them to focus on themselves and their relationships. These
programs are typically 28 days in length at a minimum, but parents can
continue to enroll their child for longer at an additional cost.

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•

Boot camps are residential programs in which strict discipline and
regime are dominant principles. Many boot camps emphasize
behavioral modification elements, and some military-style boot camps
also emphasize uniformity and austere living conditions. Boot camps
might be included as part of a wilderness therapy school or therapeutic
boarding, but many boot camps exist independently. These programs
are offered year-round and some summer programs last up to 3
months.

•

Boarding schools (also called academies) are generally advertised as
providing academic education beyond the survival skills a wilderness
therapy program might teach. These programs frequently enroll youth
whose parents force them to attend against their will. The schools can
include fences and other security measures to ensure that youth do not
leave without permission. While these programs advertise year-round
education, the length of stay varies for each student; contracts can
require stays of up to 21 months or more.

•

Ranch programs typically emphasize remoteness and large, open
spaces available on program property. Many ranch programs advertise
the therapeutic value of ranch-related work. These programs also
generally provide an opportunity for youth to help care for horses and
other animals. Although we could not determine the length of a typical
stay at ranch programs, they operate year-round and take students for
as long as 18 months.

See appendix I for further information about the location of various types
of residential programs across the United States. In addition to these
programs, the industry includes a variety of ancillary services. These
include referral services and educational consultants to assist parents in
selecting a program, along with transport services to pick up a youth and
bring him or her to the program location. Parents frequently use a
transport service if their child is unwilling to attend the program.
Private programs generally charge high tuition costs. For example, one
wilderness program stated that their program costs over $13,000 for 28
days. In addition to tuition costs, these programs frequently charge
additional fees for enrollment, uniforms, medical care, supplemental
therapy, and other services—all of which vary by program and can add up
to thousands of extra dollars. Costs for ancillary services vary. The cost
for transport services depends on a number of factors, including distance
traveled and the means of transportation. Referral services do not charge
parents fees, but educational consultants do and typically charge
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thousands of dollars. Financial and loan services are also available to
assist parents in covering the expense of residential programs and are
often advertised by programs and referral services. See appendix II for
further information about the cost of residential programs across the
United States.
There are no federal oversight laws—including reporting requirements—
pertaining specifically to private residential programs, referral services,
educational consultants, or transportation services, with one limited
exception. The U.S. Department of Health and Human Services oversees
psychiatric residential treatment facilities (PRTFs) receiving Medicaid
funds. In order to be eligible to receive funds under Medicaid, PRTFs must
abide by regulations that govern the use of restraint and seclusion
techniques on patients. They are also required to report serious incidents
to both state Medicaid agencies and, unless prohibited by state law, state
Protection and Advocacy agencies. In addition, the regulations require
PRTFs to report patient deaths to the Centers for Medicare and Medicaid
Services Regional Office.2

Cases of Death and
Abuse at Selected
Residential Programs

In the eight closed cases we examined, ineffective management and
operating practices, in addition to untrained staff, contributed to the death
and abuse of youth enrolled in selected programs. Furthermore, two cases
of death were very similar to cases from our October 2007 testimony, in
that staff ignored the serious medical complaints of youth until it was too
late. The practice of physical restraint figured prominently in three of the
cases. The restraint used for these cases primarily involved one or more
staff members physically holding down a youth. Ineffective operating
practices led to the most egregious cases of death and abuse, as the cases
exposed problems with the entire operation of the program. Specifically,
the failure of program leaders to ensure that appropriate policies and
procedures were in place to deal with the serious problems of youth;
ineffective management practices that led to questionable therapeutic or
operational practices; and the failure of the program to share information
about enrolled youth with the staff members who were attending to them
created the environments that resulted in abuse and death. Moreover, in
cases involving abuse, the abuse was systemic in the program and not
limited to the incident discussed in our case studies. In three of the eight

2

42 C.F.R. §§ 483.350 - .376.

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cases we examined, the victim was placed in the program by the state or in
consultation with state authorities.3
See table 1 for a summary of the cases of death we examined.
Table 1: Summary of Eight Closed Cases (Four Deaths)
Case
1

Victim
information

Program
Attended

Date
of death

Cause
of death

Male, 16,
California
resident

Arizona boot
camp

March 1998

Empyema
(accumulation of
infectious pus in the
chest)

Case details
•
•

•

•

•
•

2

Male, 14, Texas
resident

Texas wilderness Sept. 2004
therapy program

Cardiopulmonary
Arrest

•

•

•
•
•
•
•

Victim suffered from asthma and chronic
bronchitis
For a period of several weeks, victim
complained of chest pain and difficulty
breathing, but a program nurse said that his
breathing problems were in his head
Staff punished him for refusing an assigned
task, and forced him to do push-ups and
carry cinder blocks
Victim eventually became unresponsive, at
which point staff finally realized that his
condition required medical attention
Victim was declared dead at a hospital
Autopsy found more than 70 injuries,
including some from blunt force, on his
body, indicating that the victim had been
physically abused before his death
Victim’s hiking group became lost and spent
several unforeseen hours in temperatures
that reached 98 degrees (a reported heat
index of near 105 degrees)
During the hike, victim stopped and
complained that he was too hot and tired
and refused to go on, but he was
encouraged to continue
Victim said he didn’t feel well and was dizzy,
then stumbled and fell
Staff thought he was “faking”
When victim began to vomit, staff rolled him
on his side
Victim stopped breathing and was later
pronounced dead
Died on federal land

3
For an illustration showing the states where victims resided and the location of the
programs they attended, both for this testimony and our October 2007 testimony, see
app. I.

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Victim
information

Program
Attended

Date
of death

Cause
of death

3

Male, 12, Texas
resident

Texas residential
treatment center

Dec. 2005

Suffocation

4

Male, 16,
Pennsylvania
resident

Pennsylvania
psychiatric
residential
treatment center

Feb. 2006

Abnormal heartbeat

Case

Case details
• Victim was angry and started banging his
head against the ground
• A 5 feet 10 inch, muscular staff member
placed the 87-pound victim into a facedown
restraint
• Several witnesses claimed they saw the
staff member lying across the back of the
victim
• Victim complained he couldn’t breathe and
eventually became unresponsive, at which
point the staff member removed the restraint
• After the victim had lain unresponsive for
about a minute, the staff member rolled him
over and found that he was pale
• Attempts to revive victim failed
• Victim was placed under “intense
observation” for attempting to run away from
the program
• Victim was ordered to put the hood of his
sweatshirt down so that staff could see his
face, but victim refused
• Three staff members brought the victim to
another room and placed him in restraint
face down
• After 10 minutes of the restraint, victim
complained that he couldn’t breathe
• Despite staff attempts to make the victim
more comfortable, victim became
unresponsive
• Victim died at the hospital 3 hours later from
an abnormal heartbeat
• Program was aware victim suffered from
asthma, but staff members who restrained
the victim claimed they were not aware of
this

Source: Records including police reports, legal documents, and state investigative documents.

See table 2 for a summary of the cases of abuse we examined. For
reporting purposes, we continue the numbering of case studies in this
table, starting with five.

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Table 2: Summary of Eight Closed Cases (Four Abuse)
Case

Victim information

Program attended

Date(s) of abuse

5

Male, 14-18, New York
resident

New Jersey residential
behavior modification
program

1994 to 1998

6

Male, 17, Washington
resident

Mississippi faith-based
academy and boot camp

April 1999

7

Male, 15, California
resident

Utah boarding school

Nov. 2004

Case details
• Victim and parents were interviewed
separately by staff during his first visit to the
program
• Victim encountered 6 hours of intense
questioning during which he felt forced to
confess to activities he says he did not take
part in, such as illegal drug use and sex
• Victim was restrained more than 250 times
while attending the program; in at least two
cases restraint lasted longer than 12 hours
• One method of restraint included wrapping the
victim in a blanket and tying him up
• Victim was required to attend the program for
4 years and was held against his will after his
18th birthday
• Victim jumped off a building and broke his left
arm; the bone of his arm was exposed, but he
was not given medical attention for 2 weeks
• Students and staff harassed the victim, with
some boys subjecting him to physical abuse
• On one occasion, victim was beaten
unconscious by staff and other students
• On another occasion, a staff member’s pit bull
bit the victim in the crotch
• Victim had previously attended boarding
school in case 7
•

•
•

8

Male, 14, California
resident

Colorado boarding
school

May 2006

•

•
•

Victim was verbally abused and punched,
kicked, and slapped by other students, under
direction of one of the school’s owners
Victim was hit and pushed down stairs by the
same school owner
On multiple occasions throughout his stay in
the school, victim was locked in a bathroom
and a closet and forced to sleep on a shelf as
punishment
Staff member assaulted victim by grabbing
him by the arm, pushing him into a stairwell,
and slamming his face into a wall
Victim’s face was visibly bruised, including a
black eye
Victim was forced to kneel on the floor for
hours with his knees at the point where the
floor meets the wall and his nose touching the
wall

Source: Records including police reports, legal documents, and state investigative documents.

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The following three narratives describe selected cases in further detail.

Case 3 (Death)

The victim, who died in 2005, was a 12-year-old male. Documents obtained
from the Texas Department of Family and Protective Services indicate that
the victim had a troubled family background. He was taken into state care
along with his siblings at the age of 6. According to child protective service
workers who visited the family’s home, the victim and his siblings were
found unsupervised and without electricity, water, or food. Some of the
children were huddled over a space heater, which was connected to a
neighbor’s house by extension cord, in order to keep warm. As a ward of
the state, the victim spent several years in various foster placements and
youth programs before being placed in a private residential treatment
center in August 2005. The program advertised itself as a “unique facility”
that specialized in services for boys with learning disabilities and
behavioral or emotional issues. The victim’s caretakers chose to place him
in this program because he was emotionally disturbed. Records indicate
that he was covered by Medicaid.
On the evening of his death, the victim refused to take a shower and was
ordered to sit on an outside porch. According to police reports, the victim
began to bang his head repeatedly against the concrete floor of the porch,
leading a staff member to drag him away from the porch and place him in
a “lying basket restraint” for his own protection. During this restraint, the 4
feet 9½ inch tall, 87-pound boy was forced to lie on his stomach with his
arms crossed under him as the staff member, a muscular male 5 feet 10
inches tall, held him still. Some of the children who witnessed the restraint
said they saw the staff member lying across the victim’s back. During the
restraint, the victim fought against the staff member and yelled at him to
stop. The staff member told police that the victim complained that he
could not breathe, but added that children “always say that they cannot
breathe during a restraint.” According to police reports, after about 10
minutes of forced restraint, the staff member observed that the victim had
calmed down and was no longer fighting back. The staff member slowly
released the restraint and asked the victim if he wanted a jacket. The
victim did not respond. The staff member told police he interpreted the
victim’s silence as an unwillingness to talk due to anger about the
restraint. He said he waited for a minute while the victim lay silently on
the ground. When the victim did not respond to his question a second time,
he tapped the victim on the shoulder and rolled him over. The staff
member observed that the victim was pale and could not detect a pulse.
All efforts to revive the victim failed, and he was declared dead at a nearby
hospital.
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When the staff member demonstrated his restraint technique for the
police, they found that his technique violated the restraint policies of the
program. These policies prohibited staff from placing any pressure on the
back of a person being restrained. The report added that this staff member
was reprimanded for injuring a youth in 2002 as a result of improper
restraint. After this incident, program administrators banned the staff
member from participating in restraints for 1 month. The reprimand issued
by program administrators over this incident noted that the staff member
had actually trained other staff members in performing restraints, making
the matter more serious. The police reports also cite one of the staff
member’s performance evaluations that noted that he had problems with
his temper. According to the reports, one of the youth in the program said
the staff member could become agitated when putting youth in restraint.
Although the Texas Department of Family and Protective Services alleged
that the victim’s death was due to physical abuse, the official certificate of
death stated that it was an accident and a grand jury declined to press
charges against the staff member performing the restraint. However, the
victim’s siblings obtained a civil settlement against the program and the
staff member for an undisclosed amount. The program remained open
until May 2006, when a 12-year-old boy drowned on a bike outing with the
program. According to records from law enforcement, child protection
workers, and the program, the boy fell into the water of a rain-swollen
creek and was sucked into a culvert. He died after several weeks on life
support. The Texas Department of Family and Protective Services cited
negligent staff supervision in its review of this second death and revoked
the program’s license to operate as a residential treatment center.
However, the program’s directors also ran a summer camp for children
with learning disabilities and social disorders licensed by the Texas
Department of State Health Services, until they resigned from their
positions in March 2008.

Case 4 (Death)

The victim was 16 years old when he died, in February 2006, at a private
psychiatric residential treatment facility in Pennsylvania for boys with
behavioral or emotional problems. He was a large boy—6 feet 1 inch in
height and weighing about 250 pounds—and suffered from bipolar
disorder and asthma. The cost for placement in this facility was primarily
paid for by Medicaid.
According to state investigative documents we obtained, the victim was
placed in intensive observation after he attempted to run away. As part of
the intensive observation, he was forced to sit in a chair in the hallway of
the facility and was restricted from participating in some activities with
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other residents. On the day of his death, staff allowed the victim to
participate in arts, crafts, and games with the other youth, but would not
let him leave the living area to attend other recreational activities. Instead,
staff told the victim that he would have to return to his chair in the
hallway. In addition, staff told him that he would have to move his chair so
that he could not see the television in another room. The victim complied,
moving his chair out of view of the television, but put up the hood of his
sweatshirt and turned his back toward the staff. The staff ordered him to
take down his hood but he refused. When one of the staff walked up to
him and pulled his hood down, the victim jumped out of his chair and
made a threatening posture with his fists, saying he did not want to be
touched. The staff member and two coworkers then brought the victim to
another room and held him facedown on the floor with his arms pulled up
behind his back. The victim struggled against the restraint, yelling and
trying to kick the three staff members holding him down. After about 10
minutes, the victim became limp and started breathing heavily. He
complained that he was having difficulties breathing. One staff member
unzipped his sweatshirt and loosened the collar of his shirt, but rather
than improve, the victim became unresponsive. The staff called emergency
services and began CPR. The victim was taken by ambulance to a hospital,
where he died a little more than 3 hours later. In the victim’s autopsy
report his death was ruled accidental, as caused by asphyxia and an
abnormal heartbeat (cardiac dysrhythmia).
Following the victim’s death, an investigation by the Pennsylvania
Department of Health found that the policies and procedures for youth
under intense observation do not prohibit them from watching television,
nor do they require that youth keep their face visible to staff at all times.
The investigation also found that the facility had documentation of the
victim’s history of asthma, and that its training manual for restraint
procedures cautioned against the risk of decreased oxygen intake during
restraints for children with asthma. However, all three staff members
involved in the restraint told investigators that they were unaware of any
medical conditions that needed to be considered when restraining the
victim. In addition, the investigation found that the facility did not provide
timely training on the appropriate and safe use of restraint. The state’s
Protection and Advocacy organization, Pennsylvania Protection &
Advocacy, Inc. (PP&A), conducted its own investigation of the facility and
found that staff members inappropriately restrained children in lieu of
appropriate behavioral interventions, which resulted in neglect and abuse.
Of the 45 residents interviewed by PP&A investigators, 29 said that staff at
the facility subjected them to restraints. The residents reported that the
restraints could last as long as 90 minutes and caused breathing
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difficulties. They also stated that staff often placed their knees on
residents’ backs and necks during restraints. One resident reported that
the blood vessels in his eyes “popped” during a restraint. Another resident
said that his nose hit the ground during the restraint, causing him to choke
on his own blood. Further, some of the residents reported that staff
provoked them and that staff did not make any effort to de-escalate the
provocations before implementing a restraint.
No criminal charges were filed in regard to the victim’s death. The victim’s
mother filed a civil suit over her son’s death against the facility, which is
currently pending. Her son’s death was not the only fatal incident at this
facility. Only 2 months before the victim’s death, in December 2005, a 17year-old boy collapsed at the facility after a physical education class, and
later died at a nearby hospital. His death was attributed to an enlarged
heart. This facility remains open.

Case 5 (Abuse)

This abuse victim was sent to a private drug and addiction treatment
program in July 1994 at the age of 14. He was attending public school in
the major metropolitan area where his family lived. The abuse victim told
us that he had problems at school, including poor grades, truancy, a fight
with other students, and that he had been suspended. After the victim was
questioned by police about an assault on a girl at his school, a family
friend with ties to the behavior modification program recommended the
program to the victim’s parents. According to the victim, his first visit to
the school turned into an intense intake session where he was interviewed
by two program patients. Although the victim denied using drugs, the
interviewers insisted that he was not being honest. After about 6 hours of
questioning, the victim told the interviewers what he thought they wanted
to hear—that he was smoking pot, did cocaine, and cut school to get
high—so that he could end the interview. The interviewers used these
statements to convince the victim’s parents to sign him into the program
for immediate intervention and treatment. He ended up staying in the
program for the next 4 years—even after he turned 18 and was held
against his will.
According to program records, the program’s part-time psychiatrist did not
examine or diagnose him until he had been in the program for 14 days.
This lack of psychological care continued, as program records indicate he
was examined by the psychiatrist only four times during his entire stay. He
was restrained more than 250 times while in the program, with at least 46
restraints lasting one hour or longer. The victim said some restraints were
applied by a group of four or five staff members and fellow patients.
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According to the victim, they held him on his back, with one person
holding his head and one person holding each limb. These restraints were
imposed whenever the victim showed any reluctance to do what he was
told, or, the victim told us, for doing some things without first obtaining
permission from program staff. On one occasion, while he was staying
with a host family and other patients, he attempted to escape from the
program. The victim claims that they restrained him by wrapping him in a
blanket and tying him up. According to the victim, when he turned 18, he
submitted a request to leave the program but his request was denied
because he had not followed the proper procedure and was a danger to
himself. For expressing his desire to leave the program, he was stripped of
all progress he had made to that point, and was prevented from further
advancing until the program director decided he was be eligible. Incident
reports filed by program staff document that after he had turned 18, the
victim was restrained on 26 separate days, with at least two restraints
lasting more than 12 hours.
According to program rules, failure of the parents to follow program rules
and fully support and participate in the program would jeopardize their
son’s treatment and progress and put him at risk of expulsion. Having been
led to believe that the program was the only way to help him overcome his
alleged addictions and problems, his family complied with the program’s
demands. Moreover, the program required parents and siblings over age 8
to attend twice weekly group therapy meetings. According to the victim,
these meetings lasted for many hours, sometimes stretching into the early
morning. He added that when the victim’s father refused to attend the
therapy meetings for fear of losing his job, the program told him to quit.
When he would not quit his job or miss work to attend the meetings, the
victim said that the program convinced his mother to leave her husband.
After his parents separated, the program would not allow the victim to
have contact with his father. The victim said that the program never told
the victim’s family that all the drug tests they performed on him returned
negative results, including the initial tests done when he entered the
program.
In February 1998, the State of New Jersey terminated the program’s
participation in the Medicaid program, holding that the program did not
qualify as a children’s partial care mental health program because of its
noncompliance with client rights standards and its failure to meet various
staff requirements, such as staff-to-client ratios and requisite education
and experience levels for staff. The program subsequently closed in
November 1998, citing financial problems. About a year later, in
September 1999, an administrative law judge rejected an appeal by the
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program to overrule the state’s termination of its Medicaid participation.
The judge noted in his decision that the program effectively operated as a
full-time residential facility. Moreover, he noted that all group staff at the
program were either current or former patients, and only two members of
the program staff met the educational requirements to qualify as directcare professionals.
The victim filed a civil lawsuit against the program, director, and a
psychiatrist, which resulted in a $3.75 million settlement. Other civil suits
filed by former patients included one patient who was committed to the
program at the age of 13 and spent 13 years in the program. This patient
reached a similar settlement against the program, director, and
psychiatrists for the sum of $6.5 million. In addition, a third former patient
secured a $4.5 million settlement against the program, director, and
psychiatrists.

Deceptive Marketing
and Questionable
Practices in Selected
Programs and
Services

Posing as fictitious parents with fictitious troubled teenagers, we found
examples of deceptive marketing and questionable practices related to 10
private residential programs and 4 referral services. The most egregious
deceptive marketing practices related to tax incentives and health
insurance reimbursement, and were intended to make the high price of the
programs appear more manageable for our fictitious parents. We also
found examples of false statements and misleading representations related
to a range of issues including education and admissions, as well as
undisclosed conflicts of interest. In addition, we identified examples of
questionable practices related to the health of youth enrolled in programs
and the method of convincing reluctant parents to enroll their children.
Although general consumer protection laws apply to these programs and
services, there are no federal laws or regulations on marketing content
and practices specific to the residential program industry.
A link to selected audio clips from these calls is available at:
http://www.gao.gov/media/video/gao-08-713t/. See table 3 for a selection of
representations made by programs and referral agents.

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Table 3: Cases of Deceptive Marketing and Questionable Practices
Source

Representation

Comments

1. 501(c)(3) charity
foundation

Foundation representative described a funding
mechanism whereby (1) parents solicit friends,
relatives, and others to make financial
donations to the foundation and have them
specify on their donation checks a numbered
code representing the child; (2) the foundation
tracks the donation amount on behalf of the
child, then deducts an administrative fee and
pays the program the remaining donation
amount on behalf of that child; and (3) friends
and family deduct the charitable donations on
their tax return

An IRS official told us that the foundation is
potentially committing tax fraud and that individuals
who follow the program’s recommendation may be
responsible for back taxes, as well as penalties and
interest for taking an improper charitable deduction

2. Montana boarding school

Program representatives told one fictitious
parent that an application form must be filled
out before a child is admitted to the boarding
school

After a call to this program by a different fictitious
parent, we received an acceptance letter for our
fictitious child even though we never applied for
admission

3. Texas wilderness program

Program representative stated that earth
Education credits can be denied by schools for any
science credits earned in the program are “fully reason and are not intrinsically transferable
transferable” and that other institutions “can’t
deny” the credit

4. Texas wilderness program
(same as case
no. 3)

Program representative said that the program
will provide parents with a detailed bill after
their child completes the program and that
health insurance companies will reimburse
expenses

5. Texas wilderness program
(same as case nos. 3 and 4)

Program representative said a trade
NATSAP does not perform inspections of its member
organization, the National Association of
programs
Therapeutic Schools and Programs (NATSAP),
“absolutely” performs inspections of the
program

6. Referral service “A”

Referral agent stated that behavioral
modification schools are “specialty schools”
and that tuition costs are tax deductible under
Section 213 of the Internal Revenue Tax code

7. Referral service “A”

The referral agent warned our fictitious parent In order to secure the business of our fictitious
parent, the referral agent gave us questionable
that his wife might “freak out” about sending
her daughter to a boarding school, and stated: ethical advice
“I want you to tell her it’s a college prep
boarding school… if she thinks that you want to
send her daughter to a place where there are
drug addicts and people that are all screwed
up, she will look at you and say ‘no way’”

Page 17

Representatives for both a health care insurer and a
behavioral health company told us that parents who
follow this advice run a real risk of not being
reimbursed, especially if the health insurance
company requires pre-approval of counseling or other
mental health services

The two programs recommended by the referral
agent do not appear to meet the requirements of IRS
regulations for special schools; according to an IRS
authority on Section 213 with whom we spoke, this is
questionable tax advice and parents should consult a
tax advisor

GAO-08-713T

Source

Representation

Comments

8. Referral service “B”

Referral agent stated that the program he
recommended “feed[s] the child a whole-grain
diet” and that along with exercise and rest, “the
bipolar, the depression, those kind of things,
they just go away after awhile”

Although diet and sleep may be beneficial, there was
no discussion during the call for a health care
provider to confirm the child’s diagnosis of bipolar
disorder or depression and whether to continue
medication

9. Referral service “B”

Web site for this referral service states: “We
will look at your special situation and help you
select the best school for your teen with
individual attention”

Referral agents recommended the same Missouri
boot camp to three different fictitious parents with
three fictitious children having very different
problems; the referral service is owned by the
husband of the woman who owns the Missouri boot
camp, but the conflict of interest was not disclosed

10. Referral services “A” and
“C”

When investigators called the phone number of Referral services “A” and “C” represent themselves
referral service “A” the receptionist answered
as separate entities, with separate names, Web sites,
the call using the name of referral service “C”
phone numbers, and magazine advertisements,
suggesting that they provide objective advice
Source: GAO.

Case 1: One of our fictitious parents called this foundation pretending to
be a parent who could not afford the cost of a residential program for his
child. A representative of the foundation explained that their “most
popular” method of fund-raising involved the friends and relatives of the
enrolled youth making tax-deductible donations to the foundation, which
in turn credited 90 percent of these “donations” specifically to pay for
tuition in a program the child was attending. The foundation assigns a
code number to each child, which parents ensure is listed on the donation
checks. The representative also provided a fund-raising packet by mail
that instructs the parents of troubled teens: “You are able to contact
family, friends, business acquaintances, affiliates, churches, and
professional/fraternal organizations that you know. Don’t forget corporate
matching funds opportunities from your employer too.” The packet also
included two template letters to send in soliciting the funds. According to
an IRS official with the Tax Exempt and Governmental Entities Division,
this practice is inappropriate and represents potential tax fraud on the part
of the foundation. Furthermore, those who claim inappropriate deductions
in this fashion would be responsible for back taxes, as well as penalties
and interest. Based on this information, we referred this nonprofit
foundation to the IRS for criminal investigation.
Case 2: The program representative at a Montana boarding school told
our fictitious parent that they must submit an application form before their
child can be accepted to the school. However, after a separate undercover
call made to this school by one of our fictitious parents, the program
representative e-mailed us stating that our fictitious daughter had been
approved for admission into the program and subsequently sent an
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acceptance letter. The acceptance letter stated that our fictitious child
“has been approved for our school here in Montana.” This admission was
based entirely on one 30-minute telephone conversation, in which our
fictitious parent described his daughter as a 13-year-old who takes the
psychotropic medication Risperdal, attends weekly therapy sessions, has
bipolar disorder, and been diagnosed with Reactive Attachment Disorder.
We did not fill out an application form for the school. Moreover, this
program had previously recommended that our fictitious parents seek
advice from the 501(c)(3)foundation discussed in Case 1 to help finance
the cost of the program. It appears that parents do not have assurance
about the integrity of the admissions process at this boarding school.
Case 4: One fictitious parent asked the representative for a Texas
wilderness therapy program whether there was any possibility that a
health insurance company would cover the cost of the program. The
representative replied that, at the completion of the program, the
bookkeeper for the program would generate an itemized statement of
billable charges that could be submitted to an insurance company for
reimbursement. She emphasized that we should not call ahead of time to
seek pre-approval, because then we would be “up the creek.” She added
that this was “just the way insurance companies like it” and stated that
health insurance companies reimburse “quite a bit.” She gave an example
of one insurance company that reimbursed for over $11,000—almost the
entire cost of the 28-day wilderness program. Representatives for both a
health care insurer and a behavioral health company told us that parents
who follow this advice run a real risk of not being reimbursed, especially if
the health insurance company requires pre-approval of counseling or other
mental health services. In this case, our fictitious parent was being led into
believing that a large portion of the tuition for the program would be
covered by health insurance even if pre-approval for the charges was not
obtained in writing in advance of the services.
Case 6: One referral agent we called stated that behavioral modification
schools are “specialty schools” and that tuition costs are tax deductible
under Section 213 of the Internal Revenue Tax code. The referral agent
also stated that transportation costs related to bringing our fictitious child
to and from the school were tax deductible under this section. However,
the two programs recommended by the referral service do not appear to
meet the requirements of IRS regulations for special schools. Our review
of Section 213 of the Internal Revenue Tax code shows that it relates to
medical expenses and specifies that, if medical expenses and
transportation for treatment exceed 7.5 percent of a taxpayer’s adjusted
gross income, the excess costs can be deducted on Schedule A of IRS
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Form 1040. Even if these expenses were deductible under this section,
only expenses above 7.5 percent of the adjusted gross income would be
deductible, rather than the full amount as suggested by the referral agent.
An IRS authority on Section 213 with whom we spoke stated that the
referral service provided us with questionable tax advice and that parents
should consult a tax advisor before attempting to claim a deduction under
this section. Parents improperly taking this deduction could be
responsible for back taxes, as well as penalties and interest.
Case 9: On its Web site, referral service “B” invites parents to call a tollfree number and states: “We will look at your special situation and help
you select the best school for your teen with individual attention.” Our
undercover investigators called this referral service pretending to be three
separate fictitious parents and described three separate fictitious children
to the agents who answered the phone. Despite these three different
scenarios, we found the referral service recommended the same
residential program all three times—a Missouri boot camp. Our
investigation into this referral service revealed that the owner of the
referral service is the husband of the boot camp owner. This relationship,
was not disclosed to our fictitious parents during our telephone calls,
which raises the issue of a potential conflict of interest. It appears that
parents who call this referral service will not receive the objective advice
they expect based on marketing information on the Web site.

Mr. Chairman and Members of the Committee, this concludes my
statement. We would be pleased to answer any questions that you may
have at this time.

Contacts and
Acknowledgments

For further information about this testimony, please contact Gregory D.
Kutz at (202) 512-6722 or kutzg@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this testimony.

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Appendix I: Private Residential Program
Locations
In our examination of case studies for this testimony and our prior
testimony, we found that the victims of death and abuse came from across
the country and attended programs that were similarly located in
numerous states. Figure 1 contains a map indicating where victims lived
and the location of the program they attended.
Figure 1: Map of Case Study Victims from October 2007 Testimony and This Testimony

State of residence (male/female)
Location of residential program
Source: GAO.

Note: The icons in figure 1 represent the state of residence for each case study victim and the state in
which each residential program is located. The icons do not reflect specific geographic locations
within states.

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Private residential programs are located nationwide and rely heavily on
the Internet for their marketing. Although Web sites list 48 of the 50 states
where parents can find various types of programs, we found that they do
not list programs in Nebraska and South Dakota, nor do they indicate the
existence of programs in the District of Columbia. Notably, we did not find
Web sites that list states with boot camps but instead instruct parents to
call for locations and details. Figure 2 illustrates the types of programs and
the states in which they are located, excluding boot camps.

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Figure 2: Private Residential Programs Nationwide
ME

WA
MT
ND

MN

OR

WY

WI

SD

NY

MI

MA

ID

CA

VT
NH

NV

PA

IA

NE

UT

IL
IN

RI
CT

OH

NJ

CO
MO

DE

KS

MD

KY

DC

AZ
NM
TX

TN

OK

AR
MS

AL

GA

WV
SC

NC

VA
SC

LA
AK

FL

HI

One or more boarding schools located in state
One or more therapeutic boarding schools located in state
One or more wilderness programs located in state
One or more ranch programs located in state
Source: GAO analysis of information available on referral service Web sites.

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Appendix II: Cost of Private Residential
Programs
Our undercover calls to selected programs revealed that most private
programs charge a high tuition for their services. Table 4 contains
information related to the high cost of these programs based these phone
calls.
Table 4: Basic Monthly Costs of Programs
No.

Type of program

Location

Source of information

Basic monthly cost

1

Boarding school

Georgia

Referral service

2

Boot camp

Missouri

Referral service

4,500

3

Boarding school

North Carolina

Referral service

4,500

4

Boarding school

South Carolina

Referral service

3,166

5

Boarding school

South Carolina

Referral service

6

Boarding school

Colorado

Program

2,795 - 2,995

7

Boarding school

Georgia

Program

8,120a

8

Boarding school

Montana

Program

3,495

9

Boarding school

New York

Program

5,160

10

Boarding school

Tennessee

Program

8,700b

11

Boarding school

Utah

Program

6,500b

12

Wilderness program

Georgia

Program

12,600

13

Wilderness program

North Carolina

Program

13,020

14

Wilderness program

Texas

Program

13,020

$3,166

2,795

Source: GAO analysis of information obtained during undercover calls to programs and referral services.
a

This is for the first 90 days; the cost drops afterwards.

b

This includes therapy.

According to program and service representatives with whom we spoke,
the basic cost could be discounted. For example, one program told us if
parents paid for a full year upfront, they would be given a $200-per-month
discount. This does not include fees by transport services for taking a
child to a program. Moreover, although program and service
representatives quoted these as basic program costs, they also mentioned
additional one-time charges, such as an enrollment fee that can be as
much as $4,600, uniform costs, or other items such as supplies. In addition,
some programs charge extra for therapy, including one-on-one therapy.

(192273)

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