Justice Department Charges 15 in Massive Healthcare Fraud Cases
The Justice Department has filed charges against 15 individuals, including six medical professionals, in connection with fraudulent healthcare schemes in Southern California. These schemes have collectively billed approximately $2 billion, marking the largest substance-abuse treatment fraud case ever prosecuted by the department.
The U.S. Attorney’s Office for the Central District of California announced the charges, which involve fake addiction treatment, unnecessary artery surgeries, fraudulent hospice enrollments, and a scheme that aimed to defraud Medi-Cal, California’s Medicaid program, out of nearly $270 million. Eight of the defendants have been arrested, with five expected to appear in federal court in downtown Los Angeles.
Colin McDonald, Assistant Attorney General for the Justice Department’s National Fraud Enforcement Division, noted that billing data played a significant role in uncovering one of the cases.
These charges highlight the largest sober home fraud scheme ever prosecuted by the Department and a scheme involving unnecessary procedures identified through data analytics. Our message is clear: if you are stealing health care funds from American taxpayers or exploiting your position to harm patients, we will find you — and the data will guide us.
David and Nathan Young, father and son, allegedly operated multiple treatment companies and directed “body brokers” to lure homeless and addicted individuals to California using free flights, money, and drugs. According to the indictment, patients were shuffled between facilities regardless of their actual needs, and some were drugged to prevent them from leaving when they attempted to escape.
This operation had been under scrutiny for several years. Beverly Hills sued Nathan Young and his Rodeo Recovery in 2020, and Aetna filed a $40 million civil lawsuit in 2023, claiming his sober homes were effectively drug dens that encouraged relapses to restart billing cycles.
In another case, cardiothoracic surgeon Harold Tabaie and chiropractor Hany Malek allegedly billed Medicare $135 million for unnecessary atherectomies on patients who did not have arterial disease. Prosecutors indicated that data showed Tabaie as a significant outlier. Additionally, three other defendants faced charges related to hospice schemes that enrolled seniors not terminally ill.
FBI Director Kash Patel reported losses amounting to $1.8 billion and linked this operation to a wider anti-fraud initiative of the administration.
“Under President Trump’s leadership, with the White House Task Force to Eliminate Fraud, stealing from American taxpayers will no longer be tolerated in this country,” Patel stated.
This latest round of charges comes on the heels of the Justice Department forming the National Fraud Enforcement Division in April and is part of a larger national takedown that charged 455 defendants in June involving over $6.5 billion in alleged fraudulent activities. The task force, led by Vice President JD Vance, has been instrumental in driving health care fraud arrests in Los Angeles, with the Justice Department winning a $1 billion Medicare fraud conviction as part of this initiative in May.
