DOJ charges 15 in Los Angeles health care fraud takedown

The Justice Department announced Oct. 22 charges against 15 defendants, including six medical professionals, in Los Angeles-area health care fraud cases that it says produced more than $1.8 billion in fraudulent claims to government and private health programs. The most serious cases involved providers giving drugs to patients to keep them in rehab and surgeons performing unnecessary surgeries. 

“If you steal health care dollars from the American taxpayer or abuse your position to harm patients, we are coming for you,” said Assistant Attorney General Colin M. McDonald of the department’s National Fraud Enforcement Division. 

Eight defendants were arrested, six of whom were expected to appear in federal court in downtown Los Angeles and two in a federal court in Texas. The charges are allegations, and all defendants are presumed innocent until proven guilty.

The largest case involves substance abuse treatment, with more than $1.6 billion billed to private insurers. Prosecutors claim that father and son David Young, 71, and Nathan Young, 39, both of Los Angeles, controlled dozens of purported treatment companies where they used various tactics to keep patients with “premium insurance” under their care longer. 

Honey Phipps, 42, and Cody Phipps, 36, of Greenville, Texas, allegedly worked as “body brokers” who recruited patients from addiction support groups and among the homeless and poor. Prosecutors allege some patients were drugged when they tried to leave, while others were given drugs off-premises to necessitate detox treatment. 

Nicholas Moore, 33, of North Myrtle Beach, South Carolina, pleaded guilty to conspiracy to commit health care fraud and wire fraud and admitted helping submit $199 million in fraudulent claims as an “area manager” of Young Facilities. Aetna filed a $40 million civil suit against Nathan Young and associates in 2023, and Young denied wrongdoing, the Orange County Register reported in December.

In a separate Medicare case worth about $135 million, Dr. Harold Tabaie, 78, an Anaheim cardiothoracic surgeon, and Hany Malek, 61, a Tarzana chiropractor, are charged with health care fraud over allegedly unnecessary artery procedures at clinics they co-owned. Prosecutors allege Malek posed as a physician and diagnosed patients with arterial disease they did not have. He also faces bank fraud charges over a pandemic-era loan application. Prosecutors said data analytics flagged Tabaie as an extreme outlier in billing for the procedure.

Three defendants face hospice fraud charges in cases totaling more than $138 million billed to Medicare. Geoffrey Jimenez, 60, of Los Angeles, allegedly controlled more than a dozen hospices whose medical director allegedly certified patients as terminally ill who were not, some of whom did not know they were on hospice.

Three others are charged with taking kickbacks for sending patients to a Houston lab in exchange for signing medically unnecessary genetic testing orders. Similarly, Thomas Steven Mladinich, the CEO of West Coast Detox, allegedly received between $150,000 and $250,000 for referring patients to a rehabilitation facility, even offering patients a cut of the money if they stayed for 21 days. 

Christina Mareik, 61, of Whittier, is charged in a Medi-Cal scheme in which prosecutors allege about $269 million in false claims were submitted through a pharmacy by taking advantage of Medi-Cal and suspending the requirement for prior-authorizations while it transitioned its prescription drug program to a new payment system. 

Dr. Dejun Wang, 62, of Walnut, is charged with drug distribution for allegedly selling prescription drug samples, including Ozempic and Mounjaro, to pharmacy owners who repackaged and dispensed them.

The takedown follows a nationwide enforcement action in June that charged 455 defendants in schemes alleged to total more than $6.5 billion. In April, federal officials announced eight arrests in a Los Angeles-area hospice and health care fraud crackdown, WTOP reported. The Oct. 22 charges are part of the Trump administration’s campaign to “tackle fraud from all angles.”