Federal agents carried out predawn raids across Southern California on Thursday, arresting suspected fraudsters accused of siphoning nearly $2 billion through sham addiction-treatment programs, medically unnecessary surgeries and fraudulent hospice services.
The Justice Department said 15 people, including six medical professionals, face charges tied to $1.8 billion in allegedly fraudulent claims filed with government and private health insurance programs.
“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,” said Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division.
FBI ADDS 2 FUGITIVES TO ‘MOST WANTED FRAUDSTERS’ LIST AMID HISTORIC $6.5B HEALTHCARE TAKEDOWN: PATEL
“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.”
The defendants include Dr. Harold Tabaie, 78, of Anaheim, a cardiothoracic surgeon, and his business partner, Hany Malek, 61, a chiropractor from Tarzana.
FBI agents make an arrest early Thursday during a predawn raid linked to an alleged $1.8 billion medical fraud scheme in Southern California. Fifteen people were charged in the case. (Justice Department)
Tabaie and Malek are accused of participating in a $135 million scheme that billed Medicare for atherectomies that patients did not medically need. The invasive procedure uses a bladed catheter to remove plaque from an artery.
Prosecutors allege Malek presented himself as a medical doctor while diagnosing patients with arterial disease and recommending atherectomies, despite the patients allegedly not having the condition.
CALIFORNIA DOCTOR CONVICTED OF $45M MEDICARE FRAUD SCHEME THAT FUNDED LUXURY VACATIONS AND A $12K CROSSBOW
Tabaie and Malek’s clinic was where patients were initially evaluated before being referred for allegedly unnecessary atherectomy procedures. (Justice Department)
Officials said Tabaie performed the procedures, in some cases repeatedly on patients whose earlier operations had failed. Several patients experienced severe pain and discomfort as a result, authorities said.
Malek also faces separate allegations involving fraudulent Paycheck Protection Program loan applications filed in 2021. Prosecutors say he falsely claimed his business had suffered a 25% drop in revenue to obtain the funds, which he allegedly used for personal expenses, family credit card bills, other business ventures and rare coins.
The Justice Department headquarters in Washington, D.C. (Kevin Carter/Getty Images)
In a separate prosecution, Nathan Young, 39, and his father, David Young, 71, were charged in connection with an alleged $1.6 billion substance abuse treatment fraud scheme.
Authorities allege the father-and-son team transported people struggling with drug addiction from across the country to dozens of rehabilitation centers in Los Angeles. Federal prosecutors said the patients were recruited by “body brokers” Honey Phipps, 42, and Cody Phipps, 36, of Greenville, Texas.
Body brokering refers to the illegal practice of accepting kickbacks for directing insured patients to particular rehabilitation facilities. Prosecutors said the patients received no genuine treatment after arriving.
Instead, the Youngs allegedly moved patients from one facility to another and repeatedly billed insurers for their stays. Staff were also allegedly instructed to give sedatives to patients to “knock them out” if they tried to leave.
VANCE ANTI-FRAUD TASK FORCE SUSPENDS 447 HOSPICES IN LOS ANGELES OVER MORE THAN $600M IN SUSPECTED FRAUD
The pair also allegedly supplied drugs to patients, isolated them from relatives, withheld access to their personal belongings and physically prevented them from leaving the facilities so their insurance policies could continue to be billed.
When Nathen Young was informed that a patient wanted to leave detox so he could smoke marijuana, Young instructed that the patient should be given what he wanted, off-site from the detox, to keep him there, prosecutors said.
“It is especially egregious when doctors and other health care professionals, who pledged to do no harm, resort to petty greed and criminality,” said First Assistant United States Attorney Bill Essayli. “Every dollar drained out of our private and public health insurance systems is one less dollar available to those who truly need it.”
The sweep also targeted several other major healthcare fraud schemes across the region. In one instance, defendants were charged with stealing more than $140 million by falsely certifying non-terminally ill patients for hospice care.
In a separate prescription fraud scheme, Christina Mareik, 61, of Whittier, was charged for her role in allegedly submitting thousands of bogus prescriptions for high-reimbursement generic drugs to Medi-Cal, California’s Medicaid program.
Additionally, Dr. Hassan Badday, 48, of Los Angeles, and Dr. Robby Ayoub, 52, of Huntington Beach, were charged with taking illegal kickbacks from a Houston laboratory marketer in exchange for ordering unnecessary Medicare genetic tests.