Federal prosecutors announced charges on October 22, 2026, against 15 defendants, including six medical professionals, in a series of Los Angeles-area healthcare fraud schemes that collectively involved over $1.8 billion in fraudulent claims to government and private health programs. The Department of Justice described the actions as one of the largest such takedowns in California, with eight defendants arrested that day.
The cases, investigated by the FBI, IRS Criminal Investigation, DEA, and the Department of Health and Human Services Office of Inspector General, expose alleged patterns of billing for services that prosecutors say were never provided, were medically unnecessary, or exploited people struggling with addiction, homelessness, or poverty. Assistant Attorney General Colin M.
McDonald of the Justice Department’s National Fraud Enforcement Division stated that the charges include the largest sober home fraud scheme the department has ever prosecuted and a scheme involving unnecessary invasive procedures detected through data analytics. The largest alleged scheme involved over $1.6 billion billed to private insurance companies for substance abuse treatment.
Prosecutors say Nathan Young, 39, of Los Angeles (also known as “Pablo”), and his father David Young, 71, also of Los Angeles (also known as “Sancho Lopez”), controlled dozens of purported treatment companies. They allegedly used “body brokers,” including Honey Phipps, 42, and Cody Phipps, 36, both of Greenville, Texas, to recruit vulnerable individuals from across the country. Recruiters targeted people who were unhoused, living in poverty, or attending support groups.
Inducements allegedly included free flights, cash, apartments, hotel stays, cars, gift cards, marijuana, cigarettes, and controlled substances, including illegal drugs. Once in California, many patients received little or no genuine treatment. Premium patients with high-reimbursement policies sometimes received better housing, while others were placed in cramped, unsanitary conditions described as “trap houses.” Patients were allegedly recycled through facilities to continue billing, coached to fabricate symptoms, and in some cases drugged “to knock the client out” if they tried to leave.
Therapy often consisted of large Zoom sessions where participation was not required. Nicholas Moore, 33, of North Myrtle Beach, South Carolina, previously pleaded guilty to conspiracy for his role managing facilities and assisting in the submission of $199 million in claims for sham treatment. These figures represent claims submitted, not confirmed payments in every instance. Private insurers bore the bulk of the alleged losses in this case.
A separate indictment charges cardiothoracic surgeon Dr. Harold Tabaie, 78, of Anaheim, and chiropractor Hany Malek, 61, of Tarzana, with a $135 million scheme to bill Medicare for medically unnecessary atherectomy procedures. Prosecutors allege Malek posed as a medical doctor to diagnose patients with arterial disease and recommend the invasive catheter procedure, even when patients had no such condition. Tabaie then performed the procedures, including repeats on patients for whom earlier operations had failed, causing significant pain and discomfort in some cases.
The clinics, West Regional Cardio Thoracic and Vascular Surgeons and Angelus Medical Clinic Multi Specialty Group, allegedly used kickbacks such as free transportation, groceries, gift cards, and utility payments to attract Medicare beneficiaries. To conceal volume, procedures were sometimes billed under the names of other providers. Data analytics flagged Tabaie as an extreme national outlier for atherectomy billing between 2016 and 2023, leading investigators to the case. Malek faces additional bank fraud charges related to a fraudulent Paycheck Protection Program loan application.
Three hospice fraud schemes allegedly billed more than $138 million to Medicare for patients who were not terminally ill. Geoffrey Jimenez, 60, of Los Angeles, is accused of operating Transitions Hospice and related entities, enrolling non-terminal beneficiaries through kickbacks and free services while patients received little or no care and were often unaware of their hospice status. One entity alone billed about $9.8 million, of which Medicare paid more than $8.3 million, with an 85 percent non-death discharge rate far above the national average.
Other defendants, including Dr. Richard Keech, 83, of Torrance, and Armani Raffi, 59, of Van Nuys, face charges for false certifications and related conduct involving additional tens of millions in claims. In the Medi-Cal pharmacy case, Christina Mareik, 61, of Whittier, was indicted after previously being charged by complaint. Prosecutors allege she and co-schemers, including patient marketer Paul Randall, exploited Medi-Cal’s temporary suspension of prior-authorization requirements during a payment system transition.
Through Monte Vista Pharmacy, they submitted approximately $269 million in claims for medically unnecessary, high-reimbursement generic drugs, of which Medi-Cal paid at least approximately $178 million. Randall was previously sentenced to 30 years in prison and ordered to pay restitution of roughly $178.7 million in a related case. These schemes raise serious questions about how such volumes of suspicious billing accumulated. In the surgery case, data analytics provided a clear detection path.
In the substance abuse cases, the use of body brokers and patient recycling has long been documented as a problem in California’s addiction treatment industry, yet the scale alleged here continued for years. A recent California State Auditor report found that the Department of Health Care Services has a history of weaknesses in overseeing Medi-Cal providers, classified the program as high-risk for fraud, and noted that investigations had not begun for the vast majority of the highest-risk providers.
The pharmacy scheme directly exploited a temporary state policy change. The Justice Department’s National Fraud Enforcement Division and multi-agency teams executed the arrests and charges. Officials emphasized that every dollar drained from public and private insurance systems reduces resources available for legitimate patients. First Assistant U.S.
Attorney Bill Essayli called it especially egregious when medical professionals put financial interests above patients. These are criminal charges, not convictions, except where guilty pleas have already been entered. Defendants are presumed innocent until proven guilty. The investigations continue, and federal authorities have signaled that data-driven enforcement will pursue similar patterns wherever they appear.
For taxpayers funding Medicare, Medi-Cal, and private insurance premiums, the alleged scale underscores the need for stronger, consistent oversight and swift accountability when warning signs emerge.
