Federal authorities launched early morning raids in Southern California on Thursday, targeting suspected fraudsters, including a cardiothoracic surgeon, linked to a scheme that allegedly siphoned nearly $2 billion through fake substance abuse programs, unnecessary surgeries, and bogus hospice care.
In all, 15 individuals, including six medical professionals, faced charges concerning over $1.8 billion in fraudulent claims submitted to various government and private health insurance programs, according to the Justice Department.
Assistant Attorney General Colin McDonald, from the National Fraud Enforcement Division of the Justice Department, stated, “These charges involve the largest sober home fraud prosecution ever undertaken by the Department and a scheme involving unnecessary procedures flagged via data analytics.”
He stressed a clear message: “If you defraud healthcare funds intended for American taxpayers or misuse your role to cause patient harm, we’re coming after you — and data will direct our efforts.”
Among those charged are 78-year-old Dr. Harold Tabaie from Anaheim and 61-year-old Hany Malek, a chiropractor from Tarzana.
They are alleged to be part of a $135 million scheme that involved billing Medicare for atherectomies that were not medically necessary, which are invasive procedures aimed at clearing arterial plaque using a specialized catheter.
Accusations suggest that Malek misrepresented himself as a medical doctor to diagnose patients with arterial disease and recommend these procedures, despite many not actually having the condition.
Both Tabaie and Malek also faced allegations related to unnecessary repeat surgeries, reportedly causing significant pain to several patients.
Malek is also under scrutiny for allegedly falsifying applications for Paycheck Protection Program loans back in 2021, claiming a 25% drop in revenue to obtain funds which were later diverted to personal expenses, including family credit card bills and other ventures.
In another case, Nathan Young, 39, along with his 71-year-old father David Young, were implicated in a $1.6 billion operation related to substance abuse fraud. The duo allegedly trafficked drug addicts from across the country to various rehab centers in Los Angeles with no real treatment provided.
The authorities describe “body brokers,” Honey Phipps, 42, and Cody Phipps, 36, from Greenville, Texas, as those who recruited vulnerable patients, a practice involving kickbacks to refer insured individuals to specific facilities.
Once these patients arrived, they were reportedly recycled through the facilities to continue billing insurance providers, with extreme measures taken to keep them there, including administering sedatives to those attempting to leave.
The charges indicate that the Youngs even controlled patients’ communication with family and prohibited them from retrieving personal belongings.
A notable instance occurred when Nathan Young allegedly advised that if a patient wanted to leave a detox program to consume marijuana, they should be accommodated off-site to keep them within the program’s control.
Bill Essayli, First Assistant United States Attorney, condemned the actions of those in the medical field, stating, “It’s particularly appalling when healthcare professionals, who vow to avoid causing harm, resort to greed and criminal acts. Every dollar lost to fraud is a dollar less for those in genuine need of care.”
The sweep also uncovered other large-scale healthcare fraud schemes in the area, one of which involved defendants falsely certifying non-terminally ill patients for hospice care, accumulating over $140 million in fraudulent gains.
In a separate incident involving prescription fraud, 61-year-old Christina Mareik from Whittier was accused of submitting thousands of false prescriptions for generic drugs to Medi-Cal, California’s Medicaid program.
Charges were also filed against Dr. Hassan Badday, 48, from Los Angeles, and Dr. Robby Ayoub, 52, from Huntington Beach, for accepting kickbacks in exchange for prescribing unnecessary genetic tests covered by Medicare.
