Feds busted Los Angeles medical fraudsters accused of stealing $2 billion Thursday, cuffing white-collar thieves for unneeded surgeries, hunting the homeless for rehabs and billing the government for phony hospice care.
Department of Justice officials charged 15 defendants in all, including medical professionals, for making fraudulent claims to government and private health care programs – including $1.6 billion sham rehab case, the largest of its type ever.
Federal SWAT teams sought their suspects in a series of predawn raids, targeting high-class criminals such as Dr. Hany Malek, 61, an allegedly armed-and-dangerous chiropractor accused of keeping an arsenal in his posh Tarzana mansion.
“Come out with your hands up,” called an FBI agent in the huge, gun-packing team of camouflaged officers who encircled Malek’s massive suburban home with a swarm of armed vehicles.
Agents cut Malek’s security gate and place ladders against his tall fences, training guns on his home. Three flash-bang grenades exploded and sirens were activated.
After a few moments, the FBI brought their man down in handcuffs and placed in him an armored truck.
Malek is accused of working with Dr. Harold Tabaie, 78, of Anaheim, a cardiothoracic surgeon, of stealing $134 million in fraudulently billed to Medicare claims for unnecessary atherectomy procedures that resulted in injury to patients.
Authorities say Malek posed as a medical doctor and diagnosed patients with arterial disease, recommending that they receive the invasive procedure in which a bladed catheter is used to clear plaque from arteries.
Tabaie then performed the procedures on patients who did not actually have disease, executing repeat atherectomies on some who he previously treated unsuccessfully with the procedure, prosecutors say.
First Assistant United States Attorney Bill Essayli said the cases represent billions 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,” said Essayli.
“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, and used his cash to fund a high-flying lifestyle, including a fleet of luxury cars and boats he parked in trailers on the street.
“He was not a nice man,” said on neighbor of Malek.
Others defendants sought Thursday included Nathan Young, 39, and his father David Young, 71, who allegedly operated a $1.6 billion substance abuse scam to traffic addicts from around the country to dozens of Los Angeles rehab centers.
The Youngs directed “body brokers” to target vulnerable marks, including homeless people and addicts in support groups, placing plying them with drugs and placing them in hotels and trap houses, according to prosecutors.
The addicts didn’t receive treatment, according to court papers, but instead were told that they could “lay out on [the] beach” without having to participate in therapy that was subsequently billed to insurance companies.
Other defendants charged included accused fraudsters who operated fake hospice programs and participated in illegal medical kickback schemes involving unneeded genetic testing.
The alleged fraudsters arrested in the takedown were expected to appear at federal court later today in downtown Los Angeles.
Federal authorities are still investigating all of the cases in the operation. It was unclear as of early Thursday how many of the defendants had been captured. Prosecutors said they would provide more information at a press conference.
