Federal prosecutors charged 15 defendants — including six doctors — in a $2 billion California healthcare fraud takedown that used homeless people as billing props, drugged patients who tried to escape, and carved into arteries that didn't need surgery. While politicians posture, the system that was supposed to serve sick Americans got looted instead.
The Justice Department announced charges Thursday spanning sham addiction treatment, unnecessary invasive procedures, and bogus hospice enrollments across Southern California. Eight defendants were arrested in predawn raids. FBI Director Kash Patel put the losses at $1.8 billion and tied the sweep to the Trump administration's White House Task Force to Eliminate Fraud, chaired by Vice President JD Vance.
The largest case — the biggest sober-home fraud the DOJ has ever prosecuted — involved father and son David and Nathan Young, who operated under aliases including "Sancho Lopez" and "Pablo." According to the indictment, they controlled dozens of purported treatment companies and deployed "body brokers" to recruit homeless and addicted people from as far as Texas, luring them to California with free flights, cash, and drugs. Patients were cycled through facilities regardless of medical need. When some tried to leave, they were drugged "to knock the client out," the indictment states.
The operation had been flagged for years. Beverly Hills sued Nathan Young and his Rodeo Recovery in 2020. Insurer Aetna filed a $40 million civil suit in 2023 alleging his sober homes were "little more than drug dens" that encouraged relapse to restart billing cycles. Nobody stopped it.
In a separate case, cardiothoracic surgeon Harold Tabaie and chiropractor Hany Malek billed Medicare $135 million for unnecessary atherectomies on patients who didn't have arterial disease, according to prosecutors. Data analytics flagged Tabaie as an extreme national outlier. HotAir reported that Malek was arrested at his $2 million Tarzana mansion, where authorities say he kept an arsenal. Three additional defendants were charged in hospice schemes that enrolled seniors who were not terminally ill.
Assistant Attorney General Colin McDonald of the DOJ's National Fraud Enforcement Division — created in April — said the data will lead prosecutors to fraudsters: "If you steal health care dollars from the American taxpayer or abuse your position to harm patients, we are coming for you."
What didn't come was accountability from the state officials who were supposed to be minding the store. U.S. Attorney Bill Essayli didn't mince words: "California has a fraud problem. Whether it's hospice fraud, or healthcare fraud or election fraud, California does fraud best." California Attorney General Rob Bonta held his own press conference an hour later, claiming credit for the arrests and accusing Essayli of "improper politicization and weaponization" of the investigation. Bonta called Trump a "desperate wannabe dictator." Breitbart noted that this task force has already driven major fraud arrests in Los Angeles and secured a $1 billion Medicare fraud conviction in May.
Two prosecutors, two press conferences, one question neither answered: how did $2 billion in fraud bill for years while regulators looked the other way? The data caught the crooks. The system didn't.
