A father-son duo running drug and sober living facilities in Los Angeles has been charged with drugging patients to keep them dependent on treatment, thereby benefiting financially from insurance billings.
David Young, 71, and Nathan Young, 39, are facing serious allegations of healthcare fraud. They allegedly collaborated with “body brokers” nationwide to lure homeless individuals seeking sobriety, bring them to their facilities, and keep them institutionalized to exploit their insurance coverage, as reported by the Los Angeles Times. The federal indictment of the Youngs is part of a broader case involving fifteen defendants, labeled by the Department of Justice (DOJ) as the “largest substance abuse treatment fraud scheme” they have encountered.
According to the criminal complaint, the Youngs devised policies to prevent patients from leaving their care. They supposedly drugged patients, cut off their communication with family, kept their belongings from them, and physically restrained them from exiting the facilities.
The details of the alleged misconduct were highlighted in an affidavit by FBI Special Agent Daniel Frey, who provided insights from the investigation and sought arrest warrants for the Youngs.
As part of the investigation, a former employee, who cooperated with the FBI, disclosed that they were instructed to transfer patients from stabilization and sober living houses to detox facilities, regardless of medical necessity.
A PowerPoint presentation from David Young, dated October 17, 2023, suggested staff members have doctors prescribe sedatives for patients attempting to leave detox facilities, according to the affidavit.
Between May 2020 and May 2026, the Youngs allegedly submitted around $1.6 billion in insurance claims and received over $210 million in payments for purportedly “non-existent and inadequate ‘therapy’ sessions,” the complaint states.
Text messages revealed communications between the Youngs and their employees using aliases such as “Pablo Lopez” for Nathan and “Sancho Lopez” for David. In one exchange, an employee informed “Pablo” about a distressed patient wanting to return to sober living.
“I’m doing my best to keep him but he doesn’t want anything else but weed,” the employee wrote.
“I would do edibles offsite,” “Pablo” responded, suggesting that if the patient left the premises, it could be a “loophole,” the affidavit indicates.
Furthermore, prosecutors claimed that the Youngs fraudulently enrolled individuals in insurance policies they were unqualified for to maintain their reimbursement streams.
The Youngs’ operation allegedly included enticing potential patients to Southern California with offers like free flights, cash, lodging, cars, gift cards, marijuana, cigarettes, controlled substances, and prescription medications dispensed by their hired physicians.
Both Youngs posted $4 million in bail, surrendered their passports, and agreed to home detention, according to reports. A court hearing is scheduled for November 5.
This case comes shortly after the Centers for Medicare and Medicaid Services announced the deferral of $1.2 billion in Medicaid funds for California, coinciding with the DOJ’s crackdown on healthcare fraud in the state.
