Federal and California officials announced separate healthcare fraud crackdowns on Thursday, with federal prosecutors charging 15 people in cases alleging more than $2 billion in losses and state Attorney General Rob Bonta (D) announcing charges and arrests against 103 providers accused of defrauding Medi-Cal, the state’s version of Medicaid, of more than $4.5 million.
Justice Department officials said at a press conference Thursday in Los Angeles that 10 of the 15 federal defendants were in custody, including eight arrested Thursday and two apprehended last week. The cases involve sham substance abuse treatment, unnecessary artery procedures, hospice services, genetic testing, and prescription drugs.
The largest case brought by the federal government alleged that Los Angeles father David Young, 71, and his son Nathan Young, 39, controlled dozens of substance abuse treatment companies and billed private insurers more than $1.6 billion for treatment that was medically unnecessary or never provided.
The Youngs allegedly used recruiters to bring vulnerable people, including homeless people and those struggling with addiction, to Southern California. Prosecutors said patients were promised free flights, housing, money, drugs, gift cards, and stays in luxury accommodations.
Some patients were allegedly kept addicted, cycled through treatment facilities, or placed in housing after their insurance benefits were exhausted. Officials said some were ultimately left on the streets of California.
“This is a pipeline of addicts and homeless people here to California,” First Assistant U.S. Attorney Bill Essayli, an appointee of President Donald Trump, said during a news conference. “Every dollar that’s defrauded by a fraudster is one less dollar that’s going to a patient who’s dying or has a disease or needs treatment.”
Federal prosecutors also charged cardiothoracic surgeon Harold Tabaie, 78, and chiropractor Hany Malek, 61, in a case involving about $135 million in allegedly fraudulent Medicare claims. Tabaie allegedly performed unnecessary atherectomies, invasive procedures used to remove plaque from arteries, on patients who did not need them. Malek allegedly posed as a medical doctor and recommended the surgeries.
Some patients allegedly underwent the procedure more than once after being told the first surgery had failed. Officials said patients were harmed during some of the operations.
Another case involved Dr. Richard Keech, 83, a physician and medical director for at least two hospices. Prosecutors alleged Keech signed certificates stating that Medicare patients were terminally ill even when they had not elected hospice care and were not expected to die within six months. The charges came as California hospice agencies faced heightened fraud scrutiny.
“Turning that benefit into a billing machine is about the most egregious theft from hardworking Americans that any of us can imagine,” Assistant Attorney General Colin McDonald said.
Bonta’s competing fraud announcement on Thursday comes as the state’s Democratic attorney general is facing reelection early next month. His office announced felony charges against 103 In-Home Supportive Services providers accused of defrauding Medi-Cal of more than $4.5 million.
The providers involved in the state-level charges allegedly billed for care hours while patients were admitted to hospitals or skilled nursing facilities. The cases resulted from a statewide review involving data analysis, claims checks, and investigations across 17 counties.
House Republicans, including Reps. Brett Guthrie (R-KY), John Joyce (R-PA), Morgan Griffith (R-VA), and Jason Smith (R-MO), have spent the past year pressing federal watchdogs to investigate what they described as weak oversight of Medicare and Medicaid fraud in California under Bonta’s leadership.
Bonta said in a statement to X on Thursday afternoon that “while the alleged fraud represents a small fraction of California’s $30 billion IHSS budget, any abuse of Medi-Cal jeopardizes funding for our most vulnerable residents.”
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The HHS inspector general conditionally recertified California’s Medicaid Fraud Control Unit in July, finding that it was not effectively carrying out some of its investigative and prosecutorial responsibilities. Centers for Medicare & Medicaid Services Administrator Mehmet Oz has also suggested California officials have not done enough to prevent fraud, with his agency deferring $867.5 million in federal Medicaid payments while reviewing high-risk claims in the state’s in-home care programs.
Bonta won the primary earlier this year with 56.6% of the vote, an 18-point lead over Republican challenger Mike Gates, ex-Huntington Beach city attorney and former Deputy Assistant Attorney General in the Civil Rights Division of the DOJ under Trump.