Federal prosecutors in Los Angeles have charged 15 people, six of them medical professionals, in a set of health care fraud cases that the Justice Department says produced more than $1.8 billion in fraudulent claims to Medicare, Medi-Cal and private insurers.
The biggest piece is a $1.6 billion scheme that allegedly lured people struggling with addiction to Southern California for sham treatment. The department called it the largest substance abuse treatment fraud it has ever prosecuted. Other cases involve unneeded artery procedures, hospices that allegedly enrolled patients who were not dying, and a $270 million Medi-Cal pharmacy scheme.
Eight defendants were arrested Thursday, Oct. 22, according to the Justice Department’s announcement. Six were set to make first appearances in federal court in downtown Los Angeles, and two in Texas.
“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 wherever you are,” said Assistant Attorney General Colin M. McDonald, who leads the department’s National Fraud Enforcement Division.
How did the alleged $1.6 billion sober home scheme work?
Prosecutors say father and son David Young, 71, and Nathan Young, 39, both of Los Angeles, controlled dozens of purported substance abuse treatment companies in the Los Angeles area and elsewhere. Two Texas residents, Honey Phipps, 42, and Cody Phipps, 36, are accused of working as “body brokers” who recruited patients.
According to the indictment, the recruiters targeted people who were homeless, poor or attending addiction support groups, looking for those whose insurance paid the most. Patients were offered free flights, cash, apartments, cars and drugs to come to California.
Once there, prosecutors say, patients with high-paying “premium” coverage got hotel rooms, while others were packed into crowded, run-down houses. The indictment alleges staff were told to drug patients who tried to leave and to coach patients to fake symptoms so they would qualify for detox. “Therapy” often meant a Zoom call with more than 100 people who only had to turn on their cameras.
Which doctors and providers were charged?
Dr. Harold Tabaie, 78, a cardiothoracic surgeon from Anaheim, and his business partner Hany Malek, 61, a chiropractor from Tarzana, are accused of a $135 million scheme to bill Medicare for unnecessary atherectomies, a procedure that uses a bladed catheter to clear plaque from arteries. Prosecutors say Malek posed as a medical doctor and diagnosed artery disease patients did not have, then sent them to Tabaie. Billing data flagged Tabaie as an extreme outlier nationwide.
Three cases target hospice care. Geoffrey Jimenez, 60, of Los Angeles is accused of enrolling seniors who were not terminally ill at Transitions Hospice, which allegedly discharged about 85% of its patients alive, more than four times the national average. Dr. Richard Keech, 83, of Torrance, a hospice medical director, is charged with signing false terminal illness certifications tied to more than $10 million in claims. Armani Raffi, 59, of Van Nuys is accused of running four linked hospices that billed Medicare about $21 million.
Two other doctors, Hassan Badday of Los Angeles and Robby Ayoub of Huntington Beach, are accused of taking kickbacks to sign off on genetic tests billed by a Houston lab. Dr. Dejun Wang of Walnut is charged with selling free drug samples, including Ozempic, Mounjaro and Rybelsus, to San Gabriel Valley pharmacies that repackaged them for customers.
What happened in the $270 million Medi-Cal pharmacy case?
Christina Mareik, 61, of Whittier was indicted after first being charged in June. Prosecutors say she and others took advantage of a period when Medi-Cal suspended prior authorization rules during a switch to a new drug payment system. Through Monte Vista Pharmacy, the group allegedly billed about $269 million for unneeded, high-priced generic drugs. Medi-Cal paid out about $179 million, according to the department.
The hospice cases fit a pattern regulators have warned about for years. Families often learned a relative had been put on hospice only when Medicare or their regular doctor called, the complaints say, and some patients’ real medical care was disrupted.
Officials stressed the role of billing data in building the cases. The department’s health care fraud strike forces have charged more than 6,200 defendants accused of billing over $45 billion since 2007. HNC covered the 2025 national health care fraud takedown, then the largest in the department’s history.
For patients and families, investigators’ advice is the same as ever: read every Medicare Summary Notice and Explanation of Benefits, and question any service you don’t recognize. Suspected fraud can be reported through Medicare’s fraud reporting page.
The FBI, HHS-OIG, IRS Criminal Investigation, the DEA and the California Department of Justice are among the agencies investigating. An indictment is only an allegation, and all defendants are presumed innocent until proven guilty in court.
Key takeaways
- The Justice Department charged 15 defendants, including six medical professionals, in Los Angeles health care fraud cases totaling more than $1.8 billion in claims, announced Oct. 22, 2026.
- A $1.6 billion sober home case, the largest of its kind the department has prosecuted, accuses four people of trafficking addiction patients to California for sham treatment.
- Other cases involve a surgeon accused of $135 million in unneeded artery procedures, three hospice schemes totaling over $138 million, genetic test kickbacks and a $270 million Medi-Cal pharmacy scheme.
- Eight defendants were arrested. All are presumed innocent unless proven guilty.
Frequently asked questions
How much fraud was alleged in the Los Angeles takedown?
The Justice Department says the 15 defendants are responsible for more than $1.8 billion in fraudulent claims to Medicare, Medi-Cal and private insurers. That includes over $1.6 billion in a single substance abuse treatment scheme.
What is a sober home or body broker scheme?
Recruiters known as body brokers lure people with addiction to treatment centers with free travel, housing or cash, then bill their insurance for treatment that is unnecessary or never provided.
What is hospice fraud?
Hospice fraud usually means enrolling Medicare patients who are not terminally ill, or billing for visits that never happened. Prosecutors say the Los Angeles hospices discharged most patients alive, a sign they were never dying.
How can I report suspected Medicare fraud?
Check your Medicare Summary Notices for services you did not receive. You can report suspected fraud by calling 1-800-MEDICARE or through the HHS Office of Inspector General hotline.
