US charges 15, including a heart surgeon, in $1.8 billion medical fraud sweep

Federal authorities carried out predawn raids across Southern California and charged 15 people, including a cardiothoracic surgeon, in healthcare fraud schemes totalling nearly $2 billion. The Justice Department said the defendants are accused of submitting $1.8 billion in fraudulent claims to government and private health insurance programmes.

Six of the 15 defendants are medical professionals. The charges involve sham substance abuse programmes, unnecessary surgeries and phony hospice care used as vehicles to siphon off money.

Assistant Attorney General Colin McDonald of the Justice Department's National Fraud Enforcement Division said the charges include the largest sober home fraud scheme the department has ever prosecuted, and a scheme involving unnecessary invasive procedures that was detected through data analytics. The message, he said, is simple: steal healthcare dollars from the American taxpayer or abuse a position to harm patients, and authorities will come — and the data will lead them there.

Among the defendants are Dr Harold Tabaie, 78, of Anaheim, a cardiothoracic surgeon, and his business partner Hany Malek, 61, a chiropractor from Tarzana. Both are charged in a $135 million scheme to bill Medicare for medically unnecessary atherectomies, an invasive arterial procedure using a bladed catheter to clear plaque.

Prosecutors allege Malek posed as a medical doctor to diagnose patients with arterial disease and recommend atherectomies, even though the patients did not have the condition. Tabaie then performed the procedures, sometimes repeatedly on patients for whom previous operations had already failed. Officials said several patients suffered extreme pain and discomfort as a result.

Malek also faces charges over fraudulent Paycheck Protection Program (PPP) loan applications in 2021. He allegedly fabricated a revenue loss for his business to secure loan funds, then spent the money on personal expenses, family credit cards, other ventures and rare coins.

In a separate case, Nathan Young, 39, and his father David Young, 71, were charged with running a $1.6 billion substance abuse scam. Authorities allege the father-son duo trafficked drug addicts from across the nation to dozens of Los Angeles rehab centres.

The patients were recruited by so-called body brokers — Honey Phipps, 42, and Cody Phipps, 36, both of Greenville, Texas. Body brokerage is the illegal practice of taking kickbacks to refer insured individuals to specific rehab facilities. Once patients arrived, prosecutors say, no actual treatment was provided.

Instead, the Youngs allegedly recycled patients through their facilities to bill insurers continuously, even ordering staff to drug patients with sedatives to knock them out if they tried to leave. They also allegedly offered patients drugs, cut them off from family communication, kept them from their belongings and physically blocked them from leaving, so billing against their insurance could continue.

The sweep also targeted several other major healthcare fraud schemes across the region. In one, defendants were charged with stealing more than $140 million by falsely certifying patients who were not terminally ill for hospice care.

In a separate prescription fraud scheme, Christina Mareik, 61, of Whittier, was charged over thousands of bogus prescriptions for high-reimbursement generic drugs submitted to Medi-Cal, California's Medicaid programme. Separately, Dr Hassan Badday, 48, of Los Angeles, and Dr Robby Ayoub, 52, of Huntington Beach, were charged with taking illegal kickbacks from a Houston laboratory marketer in exchange for ordering unnecessary Medicare genetic tests.

First Assistant US Attorney Bill Essayli said it is especially egregious when doctors and other healthcare professionals, who pledged to do no harm, resort to greed and criminality. Every dollar drained out of public and private health insurance systems, he said, is one less dollar available to those who truly need it.