LOS ANGELES, October 26, 2026 — Federal prosecutors have charged 15 people, including six medical professionals, in connection with healthcare fraud schemes totaling approximately $2 billion in fraudulent claims. Eight suspects were arrested in Los Angeles on October 22, while seven others were charged but remain at large.
By the Numbers: $2 Billion Across Distinct Schemes
The Department of Justice announced the charges Thursday, describing several separate operations rather than a single coordinated conspiracy. The largest scheme accounts for more than $1.6 billion billed to private insurers for purported substance abuse treatment. Prosecutors also allege $134 million in Medicare billings for unnecessary atherectomy procedures and more than $138 million billed to Medicare in three distinct hospice fraud schemes. Additional allegations involve illegal kickbacks for genetic testing, the sale of prescription drug samples, and a previously charged $270 million Medi-Cal pharmacy fraud case.
The $1.6 Billion Substance-Abuse Operation
According to court documents, a father and son, David and Nathan Young, controlled dozens of treatment companies that recruited vulnerable people from across the country to facilities in Southern California and elsewhere. Recruiters allegedly lured patients with offers of flights, housing, cash, and drugs. Prosecutors say insurers were then billed for treatment that was medically unnecessary or never provided. Some patients were moved between facilities to keep claims flowing, and those who tried to leave were allegedly drugged or prevented from departing. A fifth defendant in this case, Nicholas Moore, has pleaded guilty and admitted helping submit about $199 million in fraudulent claims.
Medicare Loopholes in Vascular and Hospice Care
Prosecutors allege that three doctors and others exploited Medicare billing rules to perform unnecessary atherectomy procedures — interventions to clear blocked arteries — resulting in patient injuries and $134 million in fraudulent claims. In the hospice schemes, defendants allegedly enrolled patients who were not terminally ill, billing Medicare more than $138 million for end-of-life care the patients did not qualify to receive. Officials said the schemes drained public funds while putting patients at physical risk.
Private Insurers and Medi-Cal Also Targeted
The substance-abuse operation focused on private insurance plans, while the vascular and hospice schemes targeted the federal Medicare program. The sweep also includes a previously charged pharmacy fraud case involving nearly $270 million in claims to Medi-Cal, California’s Medicaid program, for medically unnecessary prescriptions. Prosecutors noted that the specific dollar amounts cited are approximate and refer to alleged claims or losses, not a finding that the defendants personally received those sums.
Strike Force Coordination and Next Steps
The investigation was conducted by the FBI, the Department of Health and Human Services Office of Inspector General, IRS Criminal Investigation, and the Drug Enforcement Administration under the Health Care Fraud Strike Force. Since 2007, the Strike Force has charged more than 6,200 defendants in cases involving over $45 billion in billed claims. First Assistant U.S. Attorney Bill Essayli called the conduct “the worst type of fraud” because doctors violated their oath to do no harm. IRS Special Agent in Charge Darren Lian said healthcare fraud drives up costs and diverts resources from patients who genuinely need care. All defendants are presumed innocent unless proven guilty in court.
Scope and Breakdown of the $2 Billion in Alleged Fraudulent Claims
The $2 billion figure cited by the Department of Justice represents the aggregate total of alleged fraudulent claims across multiple distinct schemes, rather than a single unified conspiracy. According to the Justice Department announcement and subsequent reporting, the largest single scheme accounts for more than $1.6 billion in claims billed to private insurers for purported substance abuse treatment. This figure alone constitutes the majority of the $2 billion total. The remaining amount is distributed across several other alleged operations, including $134 million in Medicare billings for unnecessary atherectomy procedures, more than $138 million billed to Medicare across three distinct hospice fraud schemes, and a previously charged Medi-Cal pharmacy fraud case involving nearly $270 million in claims for medically unnecessary prescriptions. Prosecutors have emphasized that these specific dollar amounts are approximate and refer to alleged claims or losses, not a finding that the defendants personally received those sums.
Within the substance abuse scheme, federal authorities allege that David and Nathan Young controlled dozens of treatment companies that recruited vulnerable individuals from across the country to facilities in Southern California and elsewhere. Prosecutors allege that recruiters lured patients with offers of flights, housing, cash, and drugs, before billing insurers for treatment that was medically unnecessary or never provided. Additional allegations within this specific scheme include patients being moved between facilities to keep claims flowing, and those who attempted to leave being allegedly drugged or prevented from departing. A fifth defendant in this case, Nicholas Moore, has pleaded guilty and admitted helping submit about $199 million in fraudulent claims, according to court documents. The broader sweep of charges also encompasses allegations of illegal kickbacks for genetic testing and patient referrals, as well as the sale of prescription drug samples, alongside the aforementioned vascular, hospice, and pharmacy fraud cases.
Sources
- 15 people federally charged in connection with $2 billion fraudulent healthcare schemes, DOJ says
- Feds charge 15 in California health care fraud cases, $2 billion in claims
- Stock Portfolio Management & Tracker – Yahoo Finance
Photo: Marincyclist (CC BY-SA 4.0)
