Los Angeles prosecutors charge 15 in $1.6 billion rehab fraud scheme

Federal prosecutors have charged 15 defendants, including six medical professionals, in a massive healthcare fraud scheme in Los Angeles involving approximately $1.6 billion in alleged sham substance-use treatment claims.

Authorities allege that a network of recruiters, referred to as “body brokers,” targeted vulnerable individuals, including those experiencing homelessness and attendees of recovery meetings. These recruiters reportedly used inducements such as cash, drugs, and free airline tickets to transport people to facilities based on the value of their insurance coverage rather than clinical necessity.

Central to the investigation are Nathan Young and David Young, who are accused of orchestrating one of the largest alleged sober-home fraud schemes in United States history. Prosecutors claim the scheme involved submitting fraudulent claims to major insurers, such as Aetna, for non-existent or inadequate therapy sessions. In some instances, it is alleged that clients were coached to fabricate or exaggerate addictions and were even supplied with illegal drugs to maintain the cycle of fraudulent billing.