DOJ Charges 15 in Massive $2 Billion LA Medical Fraud Case

Federal agents raided a Tarzana mansion and arrested multiple suspects Thursday in a sweeping takedown of Los Angeles-area health care fraud schemes that allegedly bilked government and private programs of nearly $2 billion, according to the Department of Justice and exclusive reporting by the California Post.

The Justice Department charged 15 defendants, including six medical professionals, in schemes that collectively involved more than $1.8 billion in fraudulent claims. These included the largest substance-abuse treatment fraud case ever prosecuted by the department—more than $1.6 billion billed for sham rehabs—plus $134 million for unnecessary atherectomy procedures that injured patients and more than $138 million across three hospice schemes for patients who were not terminally ill. An additional defendant faces charges in a roughly $270 million Medi-Cal pharmacy fraud case. Eight defendants were arrested Thursday.

California Post exclusive coverage showed FBI agents and SWAT teams cutting the security gate at the $2 million, six-bedroom Tarzana home of chiropractor Hany Malek, 61, scaling fences, deploying flash-bangs, and taking him into custody. Neighbors described a high-flying lifestyle with luxury vehicles; authorities had flagged him as armed and dangerous. Malek allegedly posed as a physician, diagnosing patients who did not have arterial disease so that cardiothoracic surgeon Harold Tabaie, 78, could perform repeated, medically unnecessary atherectomies—invasive procedures using a bladed catheter—billing Medicare under false provider names and offering kickbacks. Data analytics identified Tabaie as an extreme outlier in such billing.

In the massive substance-abuse scheme, Nathan Young, 39 (also known as “Pablo”), and his father David Young, 71 (also known as “Sancho Lopez”), both of Los Angeles, along with body brokers Honey and Cody Phipps of Texas, allegedly trafficked vulnerable people—including the unhoused and those attending support groups—from around the country. They offered free flights, money, housing, cars, gift cards, marijuana, cigarettes, and drugs, then recycled patients through facilities. Premium patients with high-reimbursing insurance received hotels and dinners; others were housed in cramped, unsanitary “trap houses.”

The Youngs allegedly directed staff to drug patients “to knock the client out” if they tried to leave, coach false symptoms, and bill for Zoom “therapy” sessions patients did not have to attend. Text messages detailed instructions to keep high-value patients by offering drugs so billing could continue. Once in California, many promises proved illusory.

Hospice schemes involved operators such as Geoffrey Jimenez, Richard Keech, and Armani Raffi, who allegedly enrolled non-terminal Medicare beneficiaries, used kickbacks and marketers, fabricated certifications, and billed tens of millions while patients were often unaware they had been placed in hospice or received little or no care. Non-death discharge rates far exceeded national averages.

Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division said the charges included “the largest sober home fraud scheme the Department has ever prosecuted” and schemes uncovered through data analytics. “If you steal health care dollars from the American taxpayer or abuse your position to harm patients, we are coming for you.”

First Assistant U.S. Attorney Bill Essayli for the Central District of California called it “especially egregious when doctors and other health care professionals, who pledged to do no harm, resort to petty greed and criminality. The cases announced today represent billions of dollars in intended losses. Every dollar drained out of our private and public health insurance systems is one less dollar available to those who truly need it.”

The takedown continues a federal crackdown under the Trump administration’s White House Task Force to Eliminate Fraud and the National Fraud Enforcement Division. It follows freezes of more than $1 billion in California Medicaid funds over hospice and related fraud, suspensions of hundreds of LA-area providers, and earlier operations such as “Operation Never Say Die.”

California Globe has repeatedly documented the scale of the problem. In March, our reporting detailed how hospice fraud exploded in Los Angeles County after the state’s “crackdown,” with 742 flagged providers, $105 million overbilled in a single year, ghost offices, and a 1,500 percent surge in providers since 2010 against far slower growth in the senior population.

In May, the Trump administration froze $1.3 billion in Medicaid funds to California specifically over hospice fraud, noting prior state audits and the inadequacy of Sacramento’s response.

In August, HHS Secretary Robert F. Kennedy Jr. accused former HHS Secretary Xavier Becerra of gutting program-integrity staff from 80 to six, enabling billions in theft—including Los Angeles hospice billing for nonexistent patients at $6,000 a month.

State efforts under Attorney General Rob Bonta have included charges in a $267 million hospice ring using stolen identities, yet federal officials and independent reporting have continued to identify Los Angeles as an epicenter, with providers clustered at vacant addresses, zero-patient operations still billing, and vulnerable populations exploited for both hospice and substance-abuse claims. The schemes announced Thursday underscore how body-brokering, kickbacks, false certifications, and data outliers have diverted resources from genuine care for the addicted, the terminally ill, and seniors.