Federal agents and prosecutors under the Trump administration struck another massive blow against California's runaway healthcare fraud industry Thursday, charging 15 defendants, including six medical professionals, in schemes that collectively submitted over $1.8 billion in fraudulent claims to Medicare, private insurers, and other programs.
The Justice Department's announcement, led by First Assistant U.S. Attorney Bill Essayli and Assistant Attorney General Colin M. McDonald, targeted what prosecutors described as the largest substance abuse treatment fraud scheme the department has ever prosecuted, along with unnecessary invasive artery procedures that injured patients and multiple hospice fraud operations where beneficiaries were not terminally ill, New York Post reported.
Eight defendants were arrested, with others charged and expected in court.
Early this morning, the FBI and our partners arrested 8 of 15 defendants in Southern California, Dallas and Chicago, for their roles in health care schemes that collectively resulted in billion in fraudulent claims to government and private health care programs, including sham… pic.twitter.com/Jb2E1L3Iv9
— FBI Los Angeles (@FBILosAngeles) October 22, 2026
The cases include a father-son operation and Texas recruiters accused of trafficking vulnerable people, including the homeless and those in recovery programs, to Southern California for sham treatment, according to the DOJ.
Nathan Young, 39, and his father David Young, 71, both of Los Angeles, along with Honey Phipps, 42, and Cody Phipps, 36, of Greenville, Texas, face charges in a years-long scheme that billed private insurers more than $1.6 billion.
Prosecutors allege they controlled dozens of purported treatment facilities and used "body brokers" to lure addicts and unhoused individuals with free flights, apartments, cash, drugs, and other inducements.
Patients were allegedly recycled through facilities for billing purposes regardless of medical necessity. Some were reportedly coerced or isolated.
A fifth defendant, Nicholas Moore, has already pleaded guilty and admitted involvement in roughly $199 million in claims. McDonald stated bluntly: "This was not treatment, it was not recovery. It was exploitation."
Cardiothoracic surgeon Harold Tabaie, 78, of Anaheim, and chiropractor Hany Malek, 61, of Tarzana, were charged in connection with approximately $134 million in Medicare billings for unnecessary atherectomy procedures, invasive plaque-removal operations performed on patients who allegedly did not need them.
Some patients were harmed, with reports of extreme pain and repeated procedures. Malek allegedly posed as a physician to steer patients.
Separate hospice schemes totaling over $138 million involved enrolling Medicare beneficiaries who were not terminally ill and billing for services that were unnecessary or never provided.
Geoffrey Jimenez, 60, of Los Angeles, was charged in a multi-entity operation involving Transitions Hospice and more than a dozen other entities.
One facility showed an 85% non-death discharge rate, more than four times the national average. Physician Richard Keech, 83, of Torrance, was also charged for allegedly certifying non-terminal patients.
Essayli, who has repeatedly highlighted California's fraud problem, said it is "especially egregious when doctors and other health care professionals, who pledged to do no harm, resort to petty greed and criminality." He has previously noted that "California does fraud best."
FBI Director Kash Patel tied the action to the broader White House Task Force to Eliminate Fraud, stating that under President Trump's leadership, "stealing from American taxpayers will no longer be tolerated."
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