Federal authorities on Thursday busted Los Angeles medical fraudsters accused of stealing $2 billion, arresting white-collar suspects allegedly behind unneeded surgeries, schemes targeting the homeless for rehab and phony hospice care billed to the government.
Department of Justice officials charged 15 defendants in all, including medical professionals, over fraudulent claims made to government and private health care programs. Among the cases is a $1.6 billion sham rehab scheme, the largest of its kind ever.
Federal SWAT teams carried out a series of predawn raids to track down suspects, including Dr. Hany Malek, 61, a chiropractor described as allegedly armed and dangerous who is accused of keeping an arsenal inside his upscale Tarzana mansion.
“Come out with your hands up,” an FBI agent called out as a large team of armed, camouflaged officers surrounded Malek’s massive suburban home with a swarm of armored vehicles.
Agents cut through Malek’s security gate and propped ladders against his tall fences while training their weapons on the house. Three flash-bang grenades went off and sirens blared.
Moments later, the FBI led Malek out in handcuffs and loaded him into an armored truck.
Malek is accused of working with Dr. Harold Tabaie, 78, an Anaheim cardiothoracic surgeon, to steal $134 million through fraudulent Medicare claims for unnecessary atherectomy procedures that resulted in injuries to patients.
According to authorities, Malek posed as a medical doctor, diagnosed patients with arterial disease and recommended they undergo the invasive procedure, in which a bladed catheter is used to clear plaque from the arteries.
Prosecutors say Tabaie then performed the procedures on patients who did not actually have the disease, and even carried out repeat atherectomies on some patients he had previously treated without success.
First Assistant United States Attorney Bill Essayli said the cases represent billions of dollars in intended losses.
“It is especially egregious when doctors and other health care professionals, who pledged to do no harm, resort to petty greed and criminality,” Essayli said.
“Every dollar drained from our private and public health insurance systems is one less dollar available to those who truly need it,” he added.
Neighbors said Malek was known as a crook who used his money to fund a high-flying lifestyle, including a fleet of luxury cars and boats he kept parked in trailers on the street.
“He was not a nice man,” one neighbor said.
Other defendants sought Thursday included Nathan Young, 39, and his father, David Young, 71, who allegedly ran the $1.6 billion substance abuse scheme that trafficked addicts from across the country to dozens of Los Angeles rehab centers.
Prosecutors say the Youngs directed “body brokers” to target vulnerable people, including the homeless and addicts in support groups, plying them with drugs and placing them in hotels and trap houses.
According to court papers, the addicts did not receive treatment. Instead, they were told they could “lay out on [the] beach” without taking part in therapy that was later billed to insurance companies.
Other defendants are accused of running fake hospice programs and taking part in illegal kickback schemes involving unneeded genetic testing.
Those arrested were expected to appear in federal court in downtown Los Angeles later in the day.
Federal authorities are still investigating all of the cases. It was unclear early Thursday how many defendants had been taken into custody. Prosecutors said more details would be released at a press conference.
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