A 61-year-old Laguna Beach man accused of involvement in a $3.2 million kickback scheme involving a sober-living facility pleaded not guilty Friday to felony charges.

Steven Lomonaco is charged along with Mahyar “Christian” Mohases, 37, of Santa Ana, Robert Williams, 41, of Murrieta, Nocholas Reeves, 42, of Aliso Viejo, and James Frageau, 29, of Temecula, with multiple insurance fraud and money laundering charges.

Lomonaco’s attorney, Jack Earley, said his client had been involved in civil litigation, which was settled.

“His position has been these were referral fees, which are fairly common in that industry,” Earley said.

Prosecutors allege that Mohases, Frageau, Williams and Reeves recruited nationwide for patients with addictions to sober up at Casa Bella International Inc., which Lomonaco owned and operated.

Lomonaco is accused of paying up to $10,000 per patient if they stayed at the sober living facility for more than a month.

“Instead of helping these patients, these individuals preyed on extremely susceptible people and exploited their addictions for profit,” Orange County District Attorney Todd Spitzer alleged.

Spitzer said his prosecutors and the state’s Department of Insurance were “cracking down on these criminals and their predatory operations in order to protect substance abuse patients from unknowingly being trafficked, as well as protect their loved ones and insurance companies from these unscrupulous operators.”

Prosecutors allege the defendants used a nonprofit to launder money used to pay insurance premiums.

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