A profitable ‘death trap’: Sequel youth facilities raked in millions while accused of abusing children

When Tristan was 16, he tried to run away, and when he was caught, he said, Sequel employees put him in solitary confinement as a punishment. For 72 hours, staff members left him in a small room outfitted with a thin mattress and a camera on the ceiling, he said. According to Tristan, and confirmed by state records and accounts from advocates and four former foster children, the staff regularly used seclusion, sometimes for days, at Tuskegee and Owens Cross Roads.

The first morning he woke up in the room, Tristan said, he waved his arms at the camera, pounded on the door and shouted for the staff to let him out to use the bathroom. He watched through a window as children made their way to class. “I was banging and kicking on the door, trying to get someone’s attention,” he said.

But nobody came. He was forced to go to the bathroom on his own breakfast tray, he said.

Sequel declined to comment on Laurie’s and Tristan’s cases. Birmingham said that seclusion — which the company refers to as “controlled observation” — and physical restraints are supposed to be “last resorts” and are not meant to be punitive.

After NBC News presented Sequel with a list of questions this month, Birmingham visited two of the company’s Alabama facilities, and said she found that “The kids were very happy.” She said she encourages staff members to report any concerns about misconduct to a company hotline so Sequel can ensure no child is abused in its care.

“Personally, I am enraged when I find out that people have treated my kids that way, if that allegation turns out to be substantiated,” she said.

The company later said in an email that in cases where a child’s safety is threatened, “we take all necessary actions — from employee termination, to policy and process changes, to staff-wide retraining — to ensure we live up to our high standards of care for the youth we serve.”

Records show that the problems at Sequel facilities go beyond Alabama.

In Iowa, licensing inspectors found on multiple visits over the past two years that the Woodward Academy staff had put residents in inappropriate restraints without justification. They also found the facility in disrepair, documenting missing sink handles, showers that had no hot water, moldy food, chairs with arms ripped off and nails exposed from torn upholstery on several couches. Sequel disputes the findings and the facility remains open.

At Kingston Academy in Tennessee, state inspectors found mold infestations, overflowing toilets and children sleeping on mattresses on the floor. Last year, Tennessee, which had paid Sequel up to $608 a day per child, suspended admissions to Kingston and the state’s Medicaid agency terminated its contract with Sequel. Sequel subsequently closed the facility.

“What we do is we strive every day to provide the best care we can for kids in these facilities,” Birmingham said. “And when we identify circumstances in which we are not providing care to the par that we expect it to be provided, we intervene with it. And we either make drastic improvements at the facility, or we may choose not to operate that facility anymore.”

A business funded by government money
Two dozen people sat quietly in a conference room at the University of Baltimore on Oct. 1, 2015, as Sequel co-founder Jay Ripley, dressed neatly in a blazer and tie, explained why he had built a company that largely ran on taxpayer money.

“We focused on public pay because we figured kids are always going to have issues and they’re always going to get in trouble, and again, the government has to figure out a way to take care of them,” Ripley explained, according to a video recording. The company collected over $200 million in annual revenue at the time, he said, and turned about $30 million in profit, which he attributed to keeping staffing costs low.

“You can make money in this business if you control staffing,” said Ripley, who at the time made $104,167 per month from Sequel as chairman, according to a financial disclosure.

Today, youth counselors at Sequel facilities start off making $12 to $15 per hour, depending on the location.

Ripley started Sequel in 1999 with Adam Shapiro, a lawyer, initially just to run Clarinda Academy, a youth facility in Iowa where Shapiro had been executive director. The company kept growing by taking over other youth facilities and programs, fueled by investments from a handful of private equity firms. One firm, Altamont Capital Partners, which has investments in health care companies, Alamo Drafthouse Cinema and clothing brands like Billabong, purchased a majority stake in Sequel for an undisclosed amount in 2017. Both Altamont and Sequel said the sale would help Sequel expand to serve more children.

In response to questions about allegations of abuse and negligence at Sequel facilities, Altamont said in a statement: “We conducted significant due diligence prior to our initial investment and are confident that Sequel Youth and Family Services is one of the best operators in the industry. With the goal of continuous improvement and our support, the company has consistently invested in quality and safety initiatives and in its staff to raise the bar and drive positive outcomes for thousands of individuals trusted to its care.”

Sequel declined to make Ripley available for an interview, and instead set up an interview with Birmingham, who handles compliance. She said she could not speak in detail about the company’s finances, but argued that Altamont’s support — including nearly $40 million invested over the past three years — has allowed Sequel to provide extra training for its employees, upgrade infrastructure and install additional security cameras at its facilities.

‘Lucky to have Sequel’
After acquiring a new facility, Sequel uses its marketing arm “to increase capacity and occupancy,” as Ripley put it in a 2017 call to investors. That means sending out marketing agents to get more states to send children to its facilities. Even states without a Sequel location, including California, Oregon and Washington, have done so.

Sequel is a frequent presence at conferences for probation officers, judges, social workers, school safety professionals, attorneys and others involved in court cases. The company has offered all-expenses-paid trips to state employees to tour the company’s facilities. “It’s part of what we do,” Jarrett Shoemaker, a Sequel marketing agent, wrote to a Washington state child welfare official in 2014. (Sequel said the free trips are not standard practice.)

In wooing states, Sequel has an advantage: It offers to take children with the most severe challenges, who are hardest to place.

Glenda Marshall, a program coordinator for Oregon’s state child welfare agency, wrote in a 2016 email to Shoemaker that the state had been struggling to find placements for foster youth. “We have been lucky to have Sequel programs available to serve our kids,” Marshall wrote. Two years later, Marshall sent cookies to other Sequel employees as a gift, emails show.

Those close relationships come in handy when the company faces scrutiny.

Sequel marketing agents contacted state officials in Oregon before and after a story aired on NBC’s “Nightly News” last year detailing allegations of sexual and physical abuse at Clarinda Academy. Sequel staff members shared the company’s side of the issue and discussed how to deal with concerns among state lawmakers.

On multiple occasions later in 2019, when Oregon state Sen. Sara Gelser emailed state officials demanding information about oversight of Sequel programs, government agents promptly forwarded the messages to Sequel employees for help responding. Marshall also traded messages with Sequel’s marketing staff monitoring Gelser’s social media activity when the lawmaker toured Sequel facilities that year.

Birmingham said Sequel’s marketing agents play a key role in receiving feedback from state officials and in helping the facility’s staffers get what they need to care for their residents. They may be trying to drum up business, but ultimately, Birmingham said, Sequel employees care about the children.

“Nobody joins our industry, you know, unless they’re actually here for the kids,” she said. “It’s a hard industry.”

But the marketing push could not overcome concerns several states had after Cornelius Frederick’s death this year. Michigan’s governor ordered state agencies in June to never do business with Sequel. Ohio recently revoked the license of a Sequel psychiatric facility in Columbus over multiple instances of violence. California, Maryland, Oregon and Washington have also stopped placing children in programs run by the company.

“Despite Oregon’s efforts to work with Sequel to meet our licensing and safety standards, it became abundantly clear that Sequel was unable or unwilling to meet Oregon’s mandatory reporting requirements,” said Jake Sunderland, press secretary for the Oregon Department of Human Services.

Alabama, however, is among the states that have permitted Sequel to continue operating.

‘Choked, body slammed, tortured’
At Courtland, where conditions had nauseated Johnson, state agencies received dozens of incident reports from 2018 to this summer detailing troubling allegations, including that children there had sustained injuries, such as a broken toe, a fractured ankle and a concussion, because of restraints. Children also reported being “slapped” and “choked” by staff members.

One of the children placed at Courtland in early 2018 was a 15-year-old boy named Hunter, a former foster child with post-traumatic stress disorder who’d been abused. According to Hunter’s adoptive mother, Patricia, the facility was supposed to get Hunter back on track with school, provide intensive therapy and immerse him in a “Positive Peer Culture” that teaches residents to support one another.

That’s not what happened, Patricia said.

“They come out worse than they were when they went in,” said Patricia, whose last name is being withheld to protect her son’s privacy.

Hunter was assaulted multiple times by other children, including by his roommate, in full view of Sequel’s staff, according to a lawsuit his family filed against Sequel this week. Patricia took photos during a visit showing Hunter, a thin, slight child, sitting on a couch at the facility in a Spider-Man T-shirt. Both of his eyes are black; one is swollen shut. He has a bulging, bloody laceration on his forehead. On top of those attacks, the suit states, a staff member once restrained Hunter so violently that his head hit a concrete wall and reopened an existing cut, requiring stitches.

In February 2019, Courtland employees called Patricia to tell her that Hunter had tried to hang himself, she said. Hunter is now receiving psychiatric treatment at a hospital, she said.

“I just want people to be held accountable,” Patricia said. “For what they’ve done, and what they’re not doing. We don’t want anything like this to happen to any other kids. If they can’t get qualified people to do their job, they need to shut them down.”

Sequel declined to comment on Hunter’s case and his family’s lawsuit. Sparkman, the Alabama Department of Human Resources spokesman, said the agency could not comment on individual cases.

In September 2019, Sondra Landers, director of the department’s office in Lawrence County, where Courtland is, sent an alarming email to several top agency staff members.

Landers wrote that a former Courtland employee reported that there were “40 different residents/students that are consistently choked, body slammed, tortured, emotionally abused, football tackled, held up to the wall by their neck, dragged out of their beds, punch children in face, break their glasses, and encouraged to harass and fight other residents.”

“Children are punished by not being allowed to go to the bathroom to the point where they urinate and defecate on themselves,” Landers said the employee told her. “Once the child has an accident they are then humiliated by staff members in front of the other children and made to sit in their urine or feces.”

Local police, the employee told Landers, called Courtland a “death trap.”

Landers referred questions to the Department of Human Resources. The agency declined to explain what action it took in response to the email. In a statement, Sparkman wrote that the agency investigates allegations and that “subsequent investigation records are confidential based on Alabama law.”

Records show that about two weeks later, Department of Human Resources Commissioner Nancy Buckner forwarded two new contracts with Sequel to Alabama Gov. Kay Ivey, a Republican. Those contracts, which Ivey signed, allow Sequel to continue to run Courtland through September 2022. They’re worth nearly $13 million.

‘We just lifted each other up’

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