Federal law enforcement authorities have uncovered a massive healthcare fraud scheme totaling approximately $2 billion across the Los Angeles and Southern California areas. A total of 15 suspects, including medical professionals, have been indicted in connection with the widespread scam.
During a briefing on October 22, the U.S. Department of Justice announced the results of the healthcare fraud investigation led by the National Health Care Fraud Strike Force. Authorities revealed that false claims submitted to federal Medicare, California’s Medi-Cal, and private health insurance companies exceeded $1.8 billion.
The largest scheme uncovered in this crackdown involved fraudulent billing through sober living and drug addiction treatment facilities, with false claims topping $1.6 billion. This marks the largest drug addiction treatment fraud case ever prosecuted by the Department of Justice.
Four individuals residing in Los Angeles, including David Young (71) and his son Nathan Young (39), are accused of targeting vulnerable populations such as the homeless and low-income individuals, luring them to Southern California treatment facilities, and billing insurance companies for unnecessary or unrendered services.
The operators used free airline tickets, accommodations, cash, cigarettes, and illicit drugs to recruit patients. They then shuffled patients between multiple facilities to continuously bill insurance, with some patients even reportedly being administered drugs to prevent them from checking out.
Additionally, three separate hospice-related fraud schemes were uncovered. Among them, Jeffrey Jimenez (60) of Los Angeles is accused of operating Transitions Hospice in Arcadia, where non-terminally ill Medicare beneficiaries were allegedly enrolled to fraudulently bill approximately $9.8 million, of which over $8.3 million was actually paid out. The Justice Department believes Jimenez also oversaw more than 12 other hospice operations that generated over $107 million in fraudulent billings.
Meanwhile, federal healthcare fraud crackdowns are expanding nationwide. On October 20, the Hanmaum Day Care Center, a Korean-operated facility in Flushing, Queens, was targeted and raided as part of a Medicaid fraud investigation.
Separately, Staten Island adult day care center operators Yangshim Um (79) and her daughter Chuyun Choi (49) were indicted on charges of submitting fraudulent Medicaid claims for senior care services.
