Federal Agents Hit Southern California In $1.8 Billion Health Care Fraud CrackdownHeres What They Found

According to Fox News, the Justice Department announced that 15 defendants, including six licensed medical professionals, now face charges tied to roughly $1.8 billion in fraudulent claims submitted to Medicare, Medicaid and private insurers. Officials say the sweep reflects a broader federal effort to use data analytics and aggressive enforcement to protect taxpayer-funded health care programs that are already under immense financial strain.

"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," said Assistant Attorney General Colin McDonald of the Justice Departments 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 you."

October 22, 2026

At the center of one major case is Dr. Harold Tabaie, 78, of Anaheim, a cardiothoracic surgeon, and his business partner, Tarzana chiropractor Hany Malek, 61. Federal prosecutors allege the pair orchestrated a $135 million scheme to bill Medicare for medically unnecessary atherectomies, invasive arterial procedures that deploy a bladed catheter to scrape plaque from blood vessels.

Investigators contend Malek falsely presented himself as a medical doctor, diagnosing patients with arterial disease they did not have and steering them toward atherectomies they did not need. Tabaie then allegedly carried out these procedures, in some instances repeating operations on patients for whom earlier surgeries had already failed, leaving several victims in severe pain and distress, according to authorities.

Prosecutors say Maleks alleged misconduct extended beyond the exam room and into pandemic relief programs funded by taxpayers. He is accused of submitting fraudulent Paycheck Protection Program loan applications in 2021 by fabricating a 25% revenue loss, then diverting the funds to personal expenses, family credit cards, unrelated business ventures and even rare coins.

In a separate indictment that underscores the dark underbelly of the addiction treatment industry, Nathan Young, 39, and his father, David Young, 71, are charged with running a $1.6 billion substance abuse fraud scheme. Authorities allege the Youngs exploited vulnerable addicts, trafficking them from across the country into a network of Los Angeles-area rehab centers that functioned more as billing mills than treatment facilities.

Federal prosecutors say the Youngs relied on "body brokers" Honey Phipps, 42, and Cody Phipps, 36, both of Greenville, Texas, to recruit insured patients. Body brokerage, an illegal practice, involves receiving kickbacks to funnel individuals with health coverage into specific rehab centers, where the focus is on maximizing insurance payouts rather than providing genuine care.

Once patients arrived, prosecutors allege, meaningful treatment was largely nonexistent, and the Youngs instead cycled them through their facilities to repeatedly bill insurers. Staff were allegedly instructed to drug patients with sedatives to "knock them out" if they tried to leave, turning supposed treatment centers into de facto holding pens for insurance revenue.

The indictment further claims the Youngs offered illegal drugs to some patients, cut them off from family contact, restricted access to their personal belongings and physically blocked exits to keep them captive while claims were submitted. When Nathen Young was told that a patient wanted to leave detox to smoke marijuana, prosecutors say Young directed staff to accommodate the request off-site to keep the patient in the program and the insurance money flowing.

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

The enforcement action also swept up defendants in other alleged schemes that further illustrate how government health programs have become ripe targets for abuse. In one hospice fraud case, prosecutors say conspirators stole more than $140 million by falsely certifying patients who were not terminally ill as eligible for end-of-life care, a tactic that both bilked taxpayers and trivialized services meant for the genuinely dying.

In another matter, authorities charged 61-year-old Whittier resident Christina Mareik with orchestrating a prescription fraud operation that pushed thousands of bogus prescriptions for high-reimbursement generic drugs through Medi-Cal, Californias Medicaid program. Prosecutors say the scheme exploited the complexity of drug reimbursement rules to siphon off public funds under the guise of routine pharmacy billing.

Additionally, Los Angeles physician Dr. Hassan Badday, 48, and Huntington Beach physician Dr. Robby Ayoub, 52, were charged with accepting illegal kickbacks from a Houston-based laboratory marketer. In exchange, the doctors allegedly ordered unnecessary Medicare genetic tests, a practice that not only wasted taxpayer dollars but also turned patient care decisions into commodities traded for cash.

For conservatives who have long warned that expansive federal health programs invite waste, fraud and abuse, the breadth of these allegations will reinforce calls for stricter oversight, tougher penalties and a renewed emphasis on personal responsibility and ethical medical practice. As these cases move through the courts, they will test whether the justice system can meaningfully deter those who view taxpayer-funded health care as a personal profit center, and whether policymakers will finally confront the systemic vulnerabilities that allow such schemes to flourish.