Feds raid LA mansion in $2 billion health care fraud case

# Federal Agents Raid Los Angeles Mansion in Nearly $2 Billion Health Care Fraud Investigation

Federal agents raided a multimillion-dollar mansion in Los Angeles on October 22 as part of a sweeping health care fraud investigation involving nearly $2 billion in alleged fraudulent claims. The U.S. Department of Justice announced charges against 15 people in cases involving substance abuse treatment centers, medically unnecessary procedures and hospice services.

According to the Justice Department, eight defendants had been arrested. The cases involve alleged fraudulent billing to government and private health insurance programs, including Medicare and California’s Medicaid program, known as Medi-Cal.

Prosecutors said the alleged schemes involved more than $1.6 billion in claims connected to sham substance abuse treatment programs, approximately $134 million to $135 million in claims for unnecessary artery procedures, and more than $138 million in claims involving hospice services for patients who allegedly were not terminally ill.

The cases form part of the Trump administration’s broader effort to investigate fraud involving government-funded health care and benefit programs.

### Mansion raid leads to chiropractor’s arrest

Federal authorities raided a large, gated residence in Tarzana, an upscale neighborhood in Los Angeles, during the early hours of October 22. Agents arrested Hany Malek, 61, a chiropractor accused of participating in a scheme involving medically unnecessary artery procedures.

According to prosecutors, Malek allegedly presented himself as a medical doctor, diagnosed patients with arterial disease and referred them to his business partner, Harold Tabaie, a 78-year-old cardiothoracic surgeon based in Anaheim.

The two allegedly billed Medicare for atherectomies, invasive procedures that use a catheter to remove plaque from arteries, even when the treatments were not medically necessary.

The indictment alleges that Tabaie also performed repeat procedures on some patients after claiming that earlier surgeries had failed. Prosecutors said some patients experienced significant pain and discomfort as a result.

The alleged scheme generated approximately $134 million in fraudulent claims, although the Justice Department’s detailed account put the amount at about $135 million.

Malek and Tabaie each face four counts of health care fraud. Malek also faces two counts of bank fraud in connection with allegations involving fraudulent applications for Paycheck Protection Program loans. The allegations have not been proven in court.

### Alleged addiction treatment scheme accounts for most claims

The largest case involves a network of purported substance abuse treatment centers that allegedly submitted more than $1.6 billion in insurance claims for services that were not provided as billed.

Federal prosecutors allege that David Young, 71, and his son Nathan Young, 39, controlled dozens of treatment companies in the Los Angeles area and elsewhere. They allegedly worked with patient recruiters to bring vulnerable individuals, including homeless people and those living in poverty, to treatment facilities.

According to the indictment, recruiters targeted people with insurance policies offering high reimbursement rates and allegedly provided incentives such as free flights, accommodation, cash and gift cards to persuade them to enroll.

Once patients arrived, the treatment they received allegedly differed from what had been promised. Prosecutors claim some facilities billed insurers for care that was unnecessary or never provided.

The indictment further alleges that patients were repeatedly transferred between facilities to maintain a flow of insurance claims. In some instances, patients were allegedly drugged or prevented from leaving, while employees were instructed to coach them to fabricate symptoms to qualify for treatment.

The allegations describe potential exploitation of people seeking help for substance abuse. The defendants are presumed innocent unless proven guilty in court.

### Hospice services and other alleged schemes

Federal prosecutors also announced charges in several hospice fraud investigations involving more than $138 million in alleged fraudulent Medicare claims.

In these cases, defendants allegedly enrolled people who were not terminally ill in hospice programs and billed Medicare for services that were unnecessary or never delivered. The Justice Department said some beneficiaries were unaware they had been enrolled or had not received the services claimed on their behalf.

Another case involved alleged fraud against Medi-Cal through false pharmacy claims. Prosecutors said the scheme generated approximately $269.1 million in fraudulent claims, of which the program paid at least $178.7 million.

The department also announced separate charges involving alleged illegal kickbacks connected to genetic testing orders and prescription drug sales. Together, the cases cover a range of alleged misconduct, from billing for services that were never provided to procedures prosecutors say exposed patients to unnecessary medical risks.

### Federal agencies expand fraud enforcement

The October 22 announcement involved several federal agencies, including the FBI, the Department of Health and Human Services Office of Inspector General and the Internal Revenue Service’s Criminal Investigation division.

Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division said investigators were pursuing cases involving the alleged misuse of health care funds and harm to patients.

FBI Director Kash Patel said the defendants were accused of exploiting taxpayer-funded health care and insurance programs. The Justice Department also said investigators used data analytics in the artery-procedure case to identify unusually high billing activity.

The announcement comes as the administration increases its focus on alleged fraud involving public assistance and government-funded programs.

For patients, insurers and taxpayers, the cases raise questions about safeguards against fraudulent billing and oversight of health care providers. Prosecutors must now establish the allegations against the defendants through the federal criminal justice system, while the cases highlight the potential financial and human costs of health care fraud.