Federal Raids Target Alleged $1.8 Billion Health Care Fraud Schemes in California

By Andrew Powell (/journals/andrew-powell)

Federal authorities carried out predawn raids across Southern California on Thursday as prosecutors announced charges against 15 people accused of participating in health care fraud schemes involving more than $1.8 billion in alleged false claims. According to Fox News, the defendants include six medical professionals, with prosecutors accusing them of exploiting patients as well as government and private insurance programs through unnecessary medical procedures, fraudulent substance abuse treatment, and fake hospice certifications. Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division said investigators used data analysis to identify some of the alleged schemes. He described the cases as including the largest sober-home fraud prosecution the department has brought. One case centers on Dr. Harold Tabaie, 78, of Anaheim, and Hany Malek, 61, of Tarzana. The pair faces charges connected to an alleged $135 million Medicare fraud scheme involving atherectomies, invasive procedures used to remove arterial plaque. Prosecutors allege Malek falsely presented himself as a doctor while diagnosing patients with arterial disease and recommending the procedures, even though investigators say the patients did not suffer from the condition. Tabaie allegedly performed the procedures, including multiple operations on some patients whose earlier procedures had already failed. Authorities said several patients experienced significant pain and discomfort. Malek is also accused of fraudulently obtaining Paycheck Protection Program loans in 2021. Prosecutors allege he falsely claimed his business had suffered a 25% drop in revenue and used the money for personal expenses, family credit cards, other business ventures and rare coins. Another case involves Nathan Young, 39, and his father, David Young, 71, who prosecutors accuse of running a $1.6 billion substance abuse treatment fraud operation. According to federal authorities, the pair worked with alleged “body brokers” Honey Phipps, 42, and Cody Phipps, 36, to bring people struggling with drug addiction from around the country to Los Angeles-area rehabilitation facilities. Prosecutors allege patients were repeatedly moved through the facilities so the operators could keep billing insurers. Some patients were allegedly sedated when they tried to leave, while others were reportedly isolated from relatives, denied access to their belongings and physically prevented from leaving. The federal sweep also produced charges tied to other alleged schemes. Prosecutors accused defendants of obtaining more than $140 million by falsely certifying patients who were not terminally ill for hospice care. Christina Mareik, 61, of Whittier, was charged in an alleged prescription scheme involving thousands of fraudulent prescriptions submitted to Medi-Cal. Drs. Hassan Badday, 48, and Robby Ayoub, 52, were separately charged with allegedly accepting illegal kickbacks for ordering unnecessary Medicare genetic tests. Federal prosecutors said the cases demonstrate the department’s focus on using investigative data to identify large-scale fraud targeting health care programs. Watch the video below: https://www.youtube.com/watch?v=LpoYJEwycOk

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