# California healthcare fraud investigations

> Live situation record from CLSTR: https://clstr.news/situations/california-healthcare-fraud-investigations
> Updated: 2026-10-22T14:17:16.000Z. Sources: 29. Developments: 2.

A state audit by Grant Parks identified the California Department of Health Care Services as “high-risk” for fraud, waste, and abuse within the Medi-Cal program. The report highlighted significant oversight gaps, noting that the Department had not yet investigated 26,000 out of 28,000 high-risk providers. Specific examples included a transportation provider receiving over $11 million despite improbable mileage claims and ineligible medical providers billing nearly $1.6 million.

Following these oversight concerns, federal authorities launched a crackdown involving the indictment of 15 defendants linked to schemes totaling approximately $2 billion in fraudulent claims. These operations included a $1.6 billion substance abuse treatment fraud involving the recruitment of approximately 6,000 individuals through “body brokers,” as well as $135 million in fraudulent Medicare claims for unnecessary medical procedures and $138 million in fraudulent hospice care claims.

In a recent enforcement action involving FBI and SWAT team raids, at least eight defendants have been arrested. Prosecutors allege that David Young and his son, Nathan Young, operated the substance abuse scheme by recruiting vulnerable, homeless individuals with incentives like free flights and groceries while providing little to no actual therapy. Other targeted operations include a $135 million Medicare fraud scheme involving chiropractor Hany Malek and surgeon Harold Tabaie, who allegedly performed unnecessary and invasive atherectomy procedures, alongside $138 million in fraudulent hospice care claims targeting non-terminal patients. Federal investigators utilized advanced data analytics to identify extreme billing outliers and suspicious patterns to facilitate these enforcement efforts.

This broader enforcement initiative, referred to by prosecutors as “Operation Never Say Die,” has uncovered over $50 million in fraudulent hospice billings to date.

## Claims

- Federal authorities charged 15 defendants in connection with healthcare fraud schemes in California. (corroborated by 14 sources)
- The alleged fraudulent claims total approximately $2 billion. (corroborated by 13 sources)
- Nathan Young and David Young allegedly operated a $1.6 billion substance-abuse treatment fraud scheme. (corroborated by 13 sources)
- The atherectomy scheme allegedly involved approximately $135 million in Medicare claims. (corroborated by 12 sources)
- Hany Malek and Harold Tabaie are accused of performing unnecessary atherectomy procedures. (corroborated by 11 sources)
- The substance abuse scheme used body brokers to recruit homeless individuals and addicts. (corroborated by 10 sources)
- At least eight defendants were arrested during the raids. (corroborated by 9 sources)
- More than $138 million was allegedly defrauded through three hospice schemes targeting non-terminal patients. (corroborated by 7 sources)

## Timeline

### 2026-10-22: California healthcare fraud crackdown targets $2 billion in alleged losses

Federal prosecutors charged 15 people in California for alleged healthcare fraud schemes totaling $2 billion, including a $1.6 billion sham rehab operation and unnecessary surgical procedures.

26 sources. https://clstr.news/cluster/federal-authorities-charge-15-individuals-in-2-billion-california-healthcare-fraud-case

### 2026-10-16: California Department of Health Care Services flagged for Medi-Cal fraud risk

California's state auditor has labeled the Department of Health Care Services as “high-risk” for fraud, waste, and abuse in the Medi-Cal program, citing inadequate oversight of high-risk providers.

3 sources. https://clstr.news/cluster/california-department-of-health-care-services-flagged-for-medi-cal-fraud-risk

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Cite as: California healthcare fraud investigations. CLSTR, https://clstr.news/situations/california-healthcare-fraud-investigations