Feds Charge 15 in $2 Billion LA Health Care Fraud Sweep

Federal prosecutors in Los Angeles on Thursday charged 15 defendants, including six medical professionals, in a sweep of health care fraud schemes that the Justice Department said produced $2 billion in fraudulent claims to government and private insurance programs.

The centerpiece, according to the U.S. Attorney’s Office for the Central District of California, is a sham addiction treatment operation that billed private insurers more than $1.6 billion, which the department called the largest substance abuse treatment fraud scheme it has ever prosecuted. Eight defendants were arrested Thursday, the office said, with initial court appearances set in Los Angeles, Texas and Illinois.

8 arrests. 7 additional defendants charged. $1.8 BILLION in alleged healthcare fraud.

The defendants allegedly exploited Medicare, hospice care, and substance abuse treatment programs to steal from American taxpayers.

Under President Trump, this FBI and DOJ are dismantling… pic.twitter.com/AoEjCMJVXY

— FBI Director Kash Patel (@FBIDirectorKash) October 22, 2026

“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,” Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division said in the release.

Patients allegedly drugged to keep the billing going

Prosecutors allege that Nathan Young, 39, and his father, David Young, 71, both of Los Angeles, controlled dozens of purported treatment companies and paid “body brokers,” including Honey Phipps, 42, and Cody Phipps, 36, of Greenville, Texas, to recruit homeless people and people attending recovery support groups, according to the indictment as described by the Justice Department.

The department said recruits were lured to Southern California with free flights, cash, housing, cars and even drugs, then cycled through facilities so insurers could be billed again and again. According to the indictment, the Youngs directed that patients be drugged “to knock the client out” if they tried to leave, and some “therapy” consisted of Zoom calls with more than 100 attendees who only had to turn on their cameras. A facility manager, Nicholas Moore, 33, has pleaded guilty in connection with that scheme, the office said.

Unneeded artery procedures and fake hospice patients

In a separate indictment, Dr. Harold Tabaie, 78, a cardiothoracic surgeon from Anaheim, and chiropractor Hany Malek, 61, of Tarzana, are accused of billing Medicare about $135 million for medically unnecessary atherectomies, an invasive procedure that uses a bladed catheter to clear arteries, according to the Justice Department. Prosecutors allege Malek posed as a medical doctor, and the department said the case was flagged by data showing Tabaie was an extreme national outlier for the procedure. Fox News reported that authorities said several patients suffered extreme pain as a result.

The Justice Department said three hospice schemes billed Medicare more than $138 million for seniors who were not terminally ill, and that a defendant previously charged by complaint, Christina Mareik, 61, of Whittier, has now been indicted in an alleged $270 million Medi-Cal pharmacy scheme. Two doctors were also charged with taking kickbacks for unnecessary genetic tests, according to the release.

FBI Director Kash Patel tied the case to the administration’s broader crackdown, saying in the release that “under President Trump’s leadership with the White House Task Force to Eliminate Fraud, stealing from American taxpayers will no longer be tolerated in this country.” The Justice Department noted that task force is chaired by Vice President JD Vance.

“It is especially egregious when doctors and other health care professionals, who pledged to do no harm, resort to petty greed and criminality,” First Assistant U.S. Attorney Bill Essayli said.

The New York Post also reported on Thursday’s raids and charges. As the Justice Department noted, indictments, complaints and informations are allegations, and all defendants are presumed innocent unless proven guilty in court.

Sources

• U.S. Attorney’s Office, Central District of California
• Fox News
• New York Post
• FBI Director Kash Patel on X

Reporting by Daily Beltway.