Federal agents carried out predawn raids across Southern California on Thursday, targeting an alleged healthcare fraud network that authorities say stole nearly $2 billion through sham addiction treatment programs, medically unnecessary surgeries and fraudulent hospice services.
The Justice Department charged 15 people, including six medical professionals, in connection with approximately $1.8 billion in allegedly false claims filed with government and private insurers.
“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 Colin McDonald, assistant attorney general with the Justice Department’s National Fraud Enforcement Division.
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“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 Hany Malek, 61, a Tarzana chiropractor who allegedly worked with him.
FBI agents made an arrest early Thursday during a predawn operation tied to an alleged $1.8 billion medical fraud case in Southern California. Fifteen people were charged in the investigation. (Justice Department)
Tabaie and Malek are accused of participating in a $135 million scheme that allegedly billed Medicare for unnecessary atherectomies, invasive procedures in which a bladed catheter is used to remove arterial plaque.
According to prosecutors, Malek falsely presented himself as a physician while diagnosing patients with arterial disease and directing them toward atherectomies, despite the patients allegedly not having the condition.
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Patients were first evaluated at Tabaie and Malek’s clinic before allegedly being sent elsewhere for atherectomy procedures that prosecutors say were not medically necessary. (Justice Department)
Officials allege Tabaie performed the procedures, sometimes repeating them on patients whose earlier operations had already failed. Several patients reportedly experienced severe pain and discomfort as a result.
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Malek is also accused of submitting false applications for Paycheck Protection Program loans in 2021. Prosecutors say he claimed his company had suffered a 25% drop in revenue to obtain funding, then used the money for personal purchases, family credit cards, 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 over an alleged $1.6 billion substance abuse treatment fraud operation.
Prosecutors say the father-and-son team brought people struggling with addiction from around the country to dozens of rehabilitation centers in Los Angeles. Authorities allege 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 steering insured patients to particular treatment facilities. Investigators say the patients received no legitimate care after arriving.
Instead, the Youngs allegedly moved patients from one facility to another and repeatedly billed insurers. Staff members were also allegedly instructed to sedate patients and “knock them out” when they tried to leave.
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The defendants also allegedly supplied drugs, isolated patients from their families, withheld access to personal belongings and physically stopped them from leaving, allowing the facilities to continue submitting insurance claims.
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.
