A Los Angeles outreach worker has exposed the disturbing lengths alleged fraudsters will go to in order to lure homeless people struggling with addiction into California detox centers. His account follows federal charges against a father and son accused of running a $1.6 billion drug-rehabilitation fraud scheme.
Federal prosecutors charged David Young, 71, and his son Nathan Young, 39, alleging that they used “body brokers” to recruit at least 6,000 people with substance-use disorders—many brought in from other states—to fill rehabilitation clinics as part of an insurance scam.
Lang Martinez, a Los Angeles homeless advocate and outreach worker, said the alleged scheme reflects a broader problem on Skid Row. He also described the tactics body brokers reportedly use to increase their profits.
“Los Angeles is definitely a hot spot for this sort of thing,” said Martinez, who once lived homeless on Skid Row before getting sober in 2018 and rebuilding his life. “First, they’ll find someone caught up in addiction. Then, they’ll give you a little bit of money.”
According to Martinez, the brokers then obtain a victim’s identification and arrange insurance coverage, allowing the person to enter a rehabilitation facility at the insurer’s expense roughly a week later.
“They have insiders with the insurance companies, your top insurance companies,” Martinez said of the alleged operation. “They’ll grease their palms, and then what they’ll do is they’ll backdate homeboy’s insurance.”
The brokers’ pitch may then sound something like this, Martinez said: “‘Got you a spot, man. I’m gonna put you on a plane, and I’m gonna fly you out to this place.’”
“It happens all over the country,” he added. “Get you in the car. Put you on a plane.”
Once they arrive, however, some people may discover that they are not receiving meaningful treatment. At facilities allegedly linked to the Youngs, prosecutors say, activities included Zoom meetings with hundreds of participants and no actual treatment, as well as trips to movie theaters presented as group therapy.
Martinez said the exploitation can become even more dangerous when brokers remove people who are maintaining sobriety from treatment, offer them money and drugs, and encourage a relapse. They can then place the person in another facility and collect a new referral fee, he said.
“A lot of these people die,” Martinez said of those he believes are victimized by such practices.
“They relapse you again, and then I put you in another program,” he said. “That’s how the brokering works.”
Martinez estimated that hundreds of homeless people with addictions on Skid Row may have ended up there after being caught in schemes of this kind.
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“When you turn human suffering into a business, you’ve lost your humanity,” he said. “What is happening to our unhoused and our most vulnerable individuals through body brokering is not recovery—it’s exploitation.”
The allegations drew fresh attention this week with the case against the Youngs, who prosecutors say worked with body brokers, including Greenville, Texas, couple Honey and Cody Phipps, to target homeless people with addictions and move them repeatedly through their rehabilitation facilities.
Justice Department prosecutors allege that the defendants made more than $210 million over the six-year operation. Assistant Attorney General Colin M. McDonald described it as “the largest sober home fraud scheme the Department has ever prosecuted.”
The Youngs and the Phipps were arrested as part of a sweeping healthcare-fraud investigation in California that federal authorities announced in Los Angeles on Thursday.
Court documents say the Youngs directed the Phipps and other body brokers to travel across several states, locate homeless people with addictions, secure insurance for them, and enroll them in the Youngs’ facilities in Los Angeles, San Diego, the Bay Area and other locations.
Court records indicate that victims were flown in from Las Vegas, Cleveland and Birmingham, Alabama.
Prosecutors allege that the brokers offered incentives to persuade people to enroll, including cash, drugs, free flights and free or heavily discounted stays in sought-after Los Angeles properties, including luxury apartments and homes.
Sometimes, victims were coached “to fabricate and exaggerate their symptoms and substance addictions during intake,†or encouraged to use drugs or alcohol so that they would not pass a urine drug test,†and would be eligible for rehab, court papers state.
Once inside the Youngs’ network of rehab homes, the patients were cycled through different types of treatment centers that corresponded to different levels of sobriety, so the fraudsters could maximize their profits, prosecutors charge.
To keep their victims as long as possible, the Youngs had such addicts “drugged with medication, cut off from communication with family members, prevented from accessing their belongings, and physically blocked from leaving,†according to court papers.
First Assistant US Attorney Bill Essayli said the scheme was particularly distressing in light of California’s homelessness problem.
“These body brokers brought vulnerable people here with false promises of treatment, worsening California’s drug-addicted homelessness crisis,†he said. “We will hold accountable those who turn addiction and human suffering into a business.â€
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