A father and son from Los Angeles are set to be arraigned Thursday on federal charges alleging what the Department of Justice calls the “largest substance abuse treatment fraud scheme ever prosecuted.”
Nathan Young, 39, and his 71-year-old father, David, are charged in downtown Los Angeles with a years-long scheme to traffic vulnerable patients from around the country to Southern California and elsewhere to receive sham substance abuse treatment billed to private insurance companies for over $1.6 billion, according to the U.S. Attorney’s Office.
With dozens of Los Angeles-area purported substance abuse treatment companies under their control, the Youngs directed so-called body brokers to target the homeless and addicts attending 12-step programs, federal prosecutors allege, seeking out individuals whose insurance policies provided the most generous reimbursements.
Prospective patients were often lured to Southern California and elsewhere by offering them illegal kickbacks, including free flights, money, apartments, hotel stays, cars, gift cards, marijuana, cigarettes, illegal drugs and prescription medications freely dispensed by doctors employed by the Youngs, according to the indictment filed in Los Angeles federal court.
But once in California, some patients whose insurance policies were not up to par were placed in cramped, unsanitary, crowded and often derelict housing described as trap houses, prosecutors contend.
The father and son, who are awaiting trial on bonds of $4 million each, are scheduled to be arraigned Thursday.
The U.S. Attorney’s Office believes the Youngs had patients “drugged with medication” and “cut off from communication with family members” to keep them from leaving treatment centers with such names as Helping Hands Rehabilitation, Get Real Recovery and Sunset Rehab.
Meanwhile, substance abuse therapy allegedly provided by the Youngs allegedly consisted of Zoom sessions with more than 100 attendees, with participation not required, court papers show.
Over the course of the six-year scheme, prosecutors contend, the Youngs submitted more than $1.6 billion in false or fraudulent claims to various insurance companies and purportedly collected more than $210 million.