The Justice Department has charged 15 people, including six medical professionals, in a series of Southern California health care fraud schemes that together billed roughly $2 billion, federal officials announced. The case includes what the department says is the largest substance-abuse treatment fraud prosecution it has ever brought.
The U.S. Attorney’s Office for the Central District of California announced the charges, which cover fake addiction treatment operations, unnecessary artery surgeries, false hospice enrollments, and a scheme to defraud Medi-Cal, California’s Medicaid program, worth nearly $270 million. Eight people were arrested, and five of them are expected to appear in federal court in downtown Los Angeles.
Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division said billing data helped investigators uncover one of the cases.
These charges include the largest sober home fraud scheme the Department has ever prosecuted, and a scheme involving unnecessary invasive procedures that was detected through data analytics. Our message is simple: if you steal health care dollars from the American taxpayer or abuse your position to harm patients, we are coming for you — and the data will lead us to you.
Father and Son Accused of Running Sober Home Scheme
According to the indictment, father and son David and Nathan Young, who used the aliases “Sancho Lopez” and “Pablo,” ran dozens of purported treatment companies and directed so-called body brokers to recruit homeless and addicted people. Prosecutors say recruits were lured to California with free flights, cash and drugs, then cycled through facilities regardless of whether they needed treatment. Some patients were reportedly drugged “to knock the client out” when they tried to leave.
The operation had already drawn legal scrutiny. The city of Beverly Hills sued Nathan Young and his company, Rodeo Recovery, in 2020. Insurer Aetna filed a $40 million civil suit against him in 2023, alleging his sober homes were “little more than drug dens” that encouraged relapse so billing cycles could restart.
Unnecessary Surgeries and Hospice Fraud
In a separate case, cardiothoracic surgeon Harold Tabaie and chiropractor Hany Malek are accused of billing Medicare $135 million for unnecessary atherectomies on patients who did not actually have arterial disease. Prosecutors said data analysis flagged Tabaie as an extreme outlier nationally. Three other defendants face charges tied to hospice schemes that enrolled seniors who were not terminally ill.
FBI Director Kash Patel put total losses from the sweep at $1.8 billion and linked the case to the administration’s broader anti-fraud push.
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.
The charges follow the Justice Department’s creation of the National Fraud Enforcement Division in April and a nationwide takedown in June that charged 455 defendants in schemes totaling $6.5 billion. The task force, chaired by Vice President JD Vance, has previously led to health care fraud arrests in the Los Angeles area, and in May the Justice Department secured a $1 billion Medicare fraud conviction tied to the same effort.
