Federal prosecutors charged 15 people in Southern California with health care fraud schemes they say billed more than $1.8 billion in false claims to public and private insurance.
Story Highlights
- The Justice Department charged 15 defendants, including six medical professionals, in schemes it says produced more than $1.8 billion in fraudulent claims.
- The biggest case accuses a father and son of a $1.6 billion rehab scheme that brought addicts from around the country to Los Angeles.
- A surgeon and a chiropractor are accused of billing Medicare about $135 million for artery procedures patients did not need.
- Eight people were arrested in predawn raids, and seven more were charged.
- Prosecutors say staff were told to drug patients to “knock the client out” if they tried to leave, and some were physically blocked from walking out.
Predawn Raids Across Southern California
Federal agents raided homes across Southern California before dawn on Thursday, October 22, and the Justice Department announced charges against 15 people. Prosecutors say the defendants ran schemes that billed government and private health plans for treatment that was fake, unneeded or never given, to pocket the payments. The charges include sham drug rehab programs, unneeded artery procedures and bogus hospice care. Hospice is care for people who are dying.
All 15 are accused, not convicted, and are presumed innocent unless proven guilty in court. No statements from the defendants or their lawyers were included in the government’s announcement. One man in the rehab case has pleaded guilty, according to prosecutors. Eight defendants were arrested that day. Five were set to appear in federal court in downtown Los Angeles, two in Texas and one in Illinois.
The $1.6 Billion Rehab Case
The largest case targets Nathan Young, 39, and his father, David Young, 71, both of Los Angeles. Prosecutors say the Youngs controlled dozens of rehab companies and billed private insurers about $1.6 billion. Officials called it the largest sober home fraud case the department has ever prosecuted. A sober home is a group house for people trying to stay off drugs or alcohol.
Prosecutors say “body brokers” recruited homeless and poor patients from around the country. A body broker is someone paid a kickback to steer insured patients to a facility. Two of them, Honey Phipps, 42, and Cody Phipps, 36, of Greenville, Texas, are charged in the case. Patients were allegedly lured with free flights, cash, housing and drugs, then signed up for insurance plans they did not qualify for. Prosecutors say staff were told to drug patients to “knock the client out” if they tried to leave, and some were physically blocked from walking out. The “therapy,” officials say, was often a Zoom call with more than 100 people where patients only had to turn on their cameras.
Indictment Details: Alleged $135 Million in Unneeded Artery Procedures
Dr. Harold Tabaie, 78, of Anaheim, is a heart and chest surgeon. Hany Malek, 61, of Tarzana, is a chiropractor and his business partner. Prosecutors charged both men by indictment in a scheme to bill Medicare about $135 million for atherectomies, procedures that use a tiny blade on a tube to clear plaque from arteries. Prosecutors say Malek posed as a medical doctor and told patients they had artery disease when they did not.
Tabaie allegedly did the procedures, sometimes again and again on patients whose earlier procedures had failed, and officials say some patients were left in extreme pain. The procedures allegedly took place at West Regional Cardio Thoracic and Vascular Surgeons and Angelus Medical Clinic Multi Specialty Group. Both men face four counts of health care fraud. Malek also faces two bank fraud counts over a pandemic small-business loan he allegedly misused. Prosecutors say data showed Tabaie billed for far more of these procedures than other doctors, which flagged the case.
Hospice, Pharmacy and Kickback Cases
Other defendants are accused of billing Medicare more than $138 million for hospice care for people who were not dying. A Whittier woman, Christina Mareik, 61, is accused of billing Medi-Cal, California’s health program for low-income people, about $270 million for drugs patients did not need. Two doctors are accused of taking kickbacks from a Houston lab for ordering genetic tests.
Why This Matters to Families, Seniors and Taxpayers
Medicare and Medi-Cal run on tax dollars, and private plans run on the premiums families pay. “Every dollar drained out of our private and public health insurance systems is one less dollar available to those who truly need it,” said Bill Essayli, the First Assistant U.S. Attorney in Los Angeles. FBI Director Kash Patel said “stealing from American taxpayers will no longer be tolerated in this country.”
The patients in these cases faced real harm too. Prosecutors describe people sedated against their will and patients put through painful procedures they did not need. The court process will test each charge, one defendant at a time.
How Prosecutors Are Framing the Larger Fight
Colin McDonald, who leads the Justice Department’s National Fraud Enforcement Division, said the department’s message to anyone stealing health care dollars is “we are coming for you.” He also warned that “the data will lead us to you,” a nod to the billing analysis that flagged cases like the artery scheme. The FBI, the Department of Health and Human Services, the IRS and the Drug Enforcement Administration all worked on the cases.
Sources:
justice.gov, justice.gov, justice.gov, foxnews.com