U.S. Attorney Bill Essayli, of the Central District of California
LOS ANGELES — California doctors and others involved in health care and other treatments will face federal criminal fraud charges for allegedly raking in nearly $2 billion from Medicare and Medi-Cal for allegedly fake or unnecessary drug addiction treatments, hospice services, medical testing, and other alleged health care-related fraud.
Federal prosecutors announced the charges on Oct. 22, saying they came as part of ongoing investigations under the National Fraud Enforcement Division (NFDE) of the Justice Department under President Donald Trump.
In a statement announcing the charges, Assistant Attorney General Colin M. McDonald of the DOJ's NFDE “These 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.
"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.”
While commonly related to health care fraud, the charges involved separate alleged schemes and actions.
Among those charged on Oct. 22 were:
- Nathan "Pablo" Young, 39, and his father, David "Sancho Lopez" Young, 71, both of Los Angeles. According to the Justice Department, the two men were charged along with two alleged co-conspirators from Greenville, Texas, identified as Honey Phipps, 42, and Cody Phipps, 36.
The Youngs and Phipps allegedly partnered to operate "purported substance abuse treatment companies" in L.A. and elsewhere, which allegedly exploited homeless people and other "vulnerable populations" to generate as much as $1.6 billion in allegedly fraudulent health insurance claims. According to the federal charging documents, the Youngs allegedly plied potential "clients" with drugs, alcohol, cigarettes, flights, money, apartments, hotel stays and other alleged "gifts" to enroll them in their alleged scheme.
They then allegedly took further steps to keep the enrollees in their alleged programs, encouraging them to continue using drugs and alcohol, allegedly cutting them off from family and even physically blocking them or drugging them to prevent them from leaving, allegedly so they could continue billing insurance companies for their alleged detox programs.
For those out of detox, prosecutors alleged they provided online "therapy sessions" over Zoom, in which participants were allegedly told they needed to only "turn on their cameras."
- Harold Tabaie, 78, of Anaheim, and Henry Malek, 61, of Tarzana. According to the DOJ, Tabaie, a cardiothoracic surgeon, and Malek, a chiropractor, allegedly worked together on an alleged $135 million scheme to bill Medicare for allegedly medically unnecessary atherectomy procedures, which ostensibly clear plaque from arteries.
According to prosecutors, Malek would allegedly falsely diagnosed patients with arterial disease, and then directed them to Tabaie, who allegedly performed the procedures at two L.A.-based clinics, identified as West Regional Cardio Thoracic and Vascular Surgeons and Angelus Medical Clinic Multi Specialty Group, even if the patients did not actually have the disease.
According to prosecutors, investigators used data analytics to identify Tabaie as "an extreme outlier for billing atherectomy procedures in the United States."
- Geoffrey Jimenez, 60, of L.A., was charged with allegedly billing Medicare for more than $117 million in fraudulent hospice claims. According to prosecutors, his company, identified as Transitions Inc., and more than a dozen other "hospice entities" under his control, showed "non-death discharge rates" between 75-90%, which showed most of their patients were not terminally ill.
Prosecutors accused Jimenez and others involved of recruiting Medicare participants into the scheme using alleged "free medical services" and "illegal kickbacks."
- Richard Keech, 83, of Torrance. According to prosecutors, Keech, who served as medical director at two hospice companies, identified as Blue Cross Hospice and Atlantica Management, was charged with allegedly submitting $10 million in false Medicare claims for hospice services.
- Armani Raffi, 59, of Van Nuys. According to prosecutors, Raffi allegedly orchestrated a $21 million Medicare fraud scheme involving four Sherman Oaks hospice providers, identified as Golden Age Hospice & Palliative Care; St. Mary's Hospice & Palliative Care; CA Hospice Care; and Miracle Hospice & Palliative Care.
According to prosecutors, Raffi's companies allegedly admitted non-terminal Medicare beneficiaries and billed for "medically unnecessary or nonexistent services."
- Hassan Badday, 48, of Los Angeles, and Robby Ayoub, 52, of Huntington Beach. According to prosecutors, Badday and Ayoub, both medical doctors, allegedly accepted illegal kickbacks for "authorizing millions of dollars in medically unnecessary genetic testing orders" through a company identified as ApolloMDX.
Prosecutors alleged the tests generated more than $5.5 million in allegedly fraudulent Medicare claims.
- Thomas S. Mladinich, 38, of Newport Beach. According to prosecutors, Mladinich allegedly received illegal kickback payments for "referring drug-addicted patients to a licensed rehabilitation facility that billed patients' private insurance plans for services."
According to prosecutors, Mladinich allegedly received up to $250,000 in alleged kickbacks.
- Christina Mariek, 61, of Whittier. According to prosecutors, Mariek, who is also known as Christina Sanchez Hernandez, allegedly played a role in a $270 million scheme to allegedly bill Medicaid of California, known as Medi-Cal, for "fraudulent prescriptions" for "medically unnecessary, high-reimbursing, non-contracted, generic drugs."
The charges come amid a renewed emphasis on exposing, prosecuting and eliminating fraud in U.S. health care to reduce costs to government providers, health insurers and consumers.
Insurance companies, for instance, have called for government action to address health care fraud-based lawsuits, in which trial lawyers, doctors and other alleged participants have schemed to stage traffic accidents, workplace injuries or other harms to extract payments from insurers.
Some states, such as Florida, have responded with laws specifically criminalizing such "staged accident fraud." And in other jurisdictions, such as Louisiana, lawyers have been prosecuted for such alleged fraud.
Following the announcement of the fraud charges in California, the American Property Casualty Insurance Association released a statement, commending the prosecutions.
“Allegations of medically unnecessary procedures being used to generate millions of dollars in fraudulent billings are deeply troubling. APCIA strongly supports aggressive enforcement against schemes that exploit patients, abuse the system, and ultimately drive-up costs for consumers," said Stef Zielezienski, APCIA’s executive vice president and chief legal officer.
In the Justice Department statement, First Assistant Central District of California U.S. Attorney Bill Essayli said: “It is especially egregious when doctors and other health care professionals, who pledged to do no harm, resort to petty greed and criminality.
“The cases announced today represent billions of dollars in intended losses. Every dollar drained out of our private and public health insurance systems is one less dollar available to those who truly need it.”
