She said she called applicants and quizzed them about their treatment philosophy. Many hung up and called back in a half-hour with answers. Others just hung up. "Those are the fly-by-nights -- those are the programs that are, in my opinion ... abusing the system," Lira said.
One of the providers she questioned was the program director at GB Medical Services, George Ilouno. Lira concluded that he had "no clue," records show.
Ilouno's problems ran much deeper than limited knowledge of addiction treatment.
State medical regulators had blocked Ilouno from becoming a physician's assistant in 2001, noting that he had been convicted of lying on student loan applications. The medical board concluded that Ilouno's "multiple acts of wrongdoing demonstrated an ongoing pattern of fraud."
As a result, the inspector general for the federal Health and Human Services Department put Ilouno on its blacklist, preventing him from billing Medicaid. State Medi-Cal authorities added him to their banned list as well.
Lira's staff vetted GB Medical Services after Ilouno and his wife, Benedicta, co-founded GB Medical in June 2006. Required paperwork filed two months later asked directly: Were any of GB Medical's owners suspended from billing Medicaid or convicted of misdemeanor government fraud?
Benedicta Ilouno indicated she was the sole owner and had a clean record.
Lira's staff, busy asking the couple for staff résumés and a detailed budget, had documents detailing George Ilouno's co-founder role. But there is no record that they followed up.
By late 2007, the Ilounos were in business, according to a letter signed by Lira staffer Allen Scott, a licensing and certification supervisor. Former staff members say George Ilouno ran day-to-day operations.
And, they say, the rehab clinic was scamming from the start.
Counselor Art Hill filed a complaint with state regulators in 2008 charging that staff paid young women $30 to $40 to sign papers saying they were getting drug counseling at GB Medical.
Hill's concerns eventually would be validated after his complaint touched off a criminal probe that led to pleas of no contest by three employees this year. But back in 2008, a state alcohol and drug program investigator deemed his claims unsubstantiated after interviewing staff and clients.
The addict-turned-counselor told CIR that clients spoke openly during his group therapy sessions about being paid to attend. Hill included their comments in his write-ups on the sessions, but he said George Ilouno ordered him to substitute made-up tales of addicts striving to get sober.
One time, Hill said, Ilouno asked him to giftwrap bottles of alcohol, including Hennessy cognac, for the rehab patients. Hill said he won't work in Drug Medi-Cal again after seeing clients exploited.
"As far as staying sober or trying to be clean," he said, "the program is not helping them."
On behalf of Ilouno, Malibu criminal defense attorney Robert Helfend denied that rehab clients were given alcohol or that session notes were changed. He did not address the claim that clients were paid, but denied that "clients demanded rising sums of money or financial favors."
Kanisha Dickerson insists she and four of her teenage children each received at least $5 whenever they attended counseling sessions at GB Medical in 2008. Ilouno would sometimes call her into his office and pay her himself, she said.
Her daughter, Darshaye Miles, 19, said she bought marijuana with the $5 she earned going to rehab. Little counseling or guidance was offered, she said, even to people who needed it.
"I really want the world to hear the story about these alcohol programs because I think that they just scam," Miles said. "They (are) just doing it to get their money."
The state's probe of GB Medical continued for half a decade, while more than $1 million in Medi-Cal funds went to the operation. In that timeframe, at least 15 state and county officials signed off on certifications, reviews and funding increases.
Once the state Department of Justice launched a formal investigation in 2008, authorities could have followed a state law calling on them to suspend Ilouno's Drug Medi-Cal operation. But they didn't.
Even after a Department of Justice investigator served Los Angeles County with a court order for the clinic's financial records in 2010, the county gave GB Medical a $90,000 annual raise. Its taxpayer funding reached $440,000 last year.
John Viernes Jr., director of Substance Abuse Prevention and Control in Los Angeles County, said he approved the raise after a Department of Justice agent said the investigation was on a back burner and might be closed.
Viernes also said he took into account the fact that his auditors didn't find anything incriminating in their own annual review.
This March, Ilouno was charged with Medi-Cal fraud, grand theft and giving kickbacks. Three counselors were charged with fraud and grand theft; a clinic driver was charged with paying kickbacks. The arrest declaration included an analysis of billing records for the fiscal year ending in 2010, which found $64,400 had been obtained fraudulently.