Federal authorities announced charges Thursday against four people they said ran a massive drug treatment scam that recruited homeless people from around the country, got them to fly to California, then put them in iffy substance abuse programs while billing their insurers maximum dollar.
The scam was blamed for billing $1.6 billion.
Prosecutors said the operation would invent symptoms to justify billing for detoxification services, and in some cases would encourage alcohol or drug use so people would become eligible for treatment.
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Authorities said David Young and his son Nathan Young, the alleged ringleaders, physically blocked some patients from leaving and drugged others to “knock the client out” to prevent their departure, all to keep billing for their care.
Once released, patients were pressed to take part in therapy that consisted of Zoom sessions with more than a hundred patients, where no engagement was required other than turning on the camera, according to text messages obtained by investigators.
“Lay out on beach,” one message urged.
Justice Department officials said it was the largest substance abuse treatment fraud they have ever prosecuted.
The DOJ also announced a $134 million fraud case over unnecessary atherectomy procedures, which clear plaque from arteries.
A doctor and his business partner were accused of making bogus diagnoses, then urging the surgeries. Investigators said they tried to conceal the large number of operations by billing some of them under assumed identities.
Prosecutors said they identified the case through data analytics, which spotted the operation as an extreme outlier for billing.
“It is especially egregious when doctors and other healthcare professionals, who pledged to do no harm, resort to petty greed and criminality,” said Bill Essayli, acting as the U.S. attorney in Los Angeles. “Every dollar drained out of our private and public health insurance systems is one less dollar available to those who truly need it.”
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