DOJ Healthcare Fraud Takedown Charges 15 in $1.8B Scheme

The healthcare fraud takedown DOJ officials announced Thursday is one of the largest in the department’s history: charges against 15 defendants, including six medical professionals, in Los Angeles-area schemes that collectively resulted in over $1.8 billion in fraudulent claims to government and private health care programs.

The Justice Department announced the enforcement action on October 22, 2026, through the U.S. Attorney’s Office for the Central District of California. Eight defendants were arrested Thursday — six expected to make initial appearances at the U.S. District Court in downtown Los Angeles and two in federal court in Texas.

“These charges include the largest sober home fraud scheme the Department has ever prosecuted, and a scheme involving unnecessary invasive procedures detected through data analytics,” said Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division. “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.”

$1.6B sham substance abuse treatment scheme

The largest case involves over $1.6 billion billed in a scheme that allegedly lured vulnerable individuals to California for sham substance abuse treatment — the largest case of its type ever prosecuted by the Department.

Prosecutors identified Nathan Young, David Young, Honey Phipps, and Cody Phipps as defendants, alleging the Youngs controlled dozens of purported treatment companies and used “body brokers” — marketers — to recruit people facing homelessness or poverty. Recruiters allegedly offered travel, housing, money, and even drugs to lure victims, according to the indictment.

Patients were allegedly moved among facilities so insurers could keep being billed, even when care was unnecessary or never provided. Nicholas Moore, described by prosecutors as an “area manager” in the operation, pleaded guilty and admitted helping submit $199 million in fraudulent claims, the department said.

$134M unnecessary artery procedures

A separate case involves $134 million fraudulently billed to Medicare for unnecessary atherectomy procedures — artery-clearing operations — that prosecutors say resulted in injury to patients. The case centers on cardiothoracic surgeon Harold Tabaie and chiropractor Hany Malek.

The Justice Department said data analytics identified Tabaie as an extreme outlier in Medicare atherectomy billing from 2016 through 2023. According to the indictment, some patients experienced severe pain after the unnecessary procedures.

$138M hospice fraud and $270M pharmacy scheme

The takedown also includes three different hospice fraud schemes totaling over $138 million billed to Medicare for patients who were not terminally ill. Prosecutors say data analysis flagged hospices whose patients were discharged alive at rates far above the national average — a red flag for billing fraud.

In addition, another defendant was indicted after previously being charged by complaint in a $270 million scheme to defraud Medi-Cal, California’s Medicaid program, by submitting pharmacy claims for bogus prescriptions.

How the fraud was detected

The cases highlight how the government is increasingly using its own payment data to catch fraud. In case after case, investigators found billing numbers that did not fit: a physician whose procedure volume was an extreme national outlier, hospices with implausible survival rates, and a pharmacy whose monthly claims jumped into the tens of millions.

The charges include indictments, criminal complaints, and informations — all of which contain allegations that must be proved in court. All defendants are presumed innocent unless and until proven guilty.

• Announced: October 22, 2026, Central District of California
• Defendants: 15 charged, including 6 medical professionals
• Arrests: 8, with initial appearances in Los Angeles and Texas
• Biggest case: $1.6B sham substance abuse treatment scheme (largest ever of its type)
• Other cases: $134M unnecessary procedures, $138M hospice fraud, $270M Medi-Cal pharmacy fraud

What’s next

Officials signaled the enforcement push will continue, with data analytics driving new investigations. RadioSea will follow the court proceedings as they develop.