Federal Agents Arrest 15 in California Healthcare Fraud Crackdown

Federal authorities arrested healthcare professionals and other defendants across California on Thursday, October 22, 2026, as part of a sweeping investigation into alleged medical fraud involving billions of dollars in claims. The cases include unnecessary surgical procedures, addiction treatment schemes, fraudulent hospice billing and improper medical reimbursements, according to reports by ABC7, the Orange County Register and Yahoo.

The U.S. Department of Justice charged 15 defendants in the enforcement operation, Yahoo reported. Prosecutors identified more than $2 billion in alleged losses across the cases, which targeted claims submitted to government healthcare programs and private insurers.

In Tarzana, FBI agents arrested chiropractor Hany Malek, 61, at his mansion during a predawn operation. California Post reporting described agents cutting through a security gate, placing ladders against tall fences and deploying flash-bang grenades before taking Malek into custody.

According to prosecutors, Malek worked with Dr. Harold Tabaie, 78, a cardiothoracic surgeon from Anaheim, in a scheme involving $134 million in allegedly fraudulent Medicare claims for unnecessary atherectomy procedures. The procedures use a bladed catheter to remove plaque from arteries.

Authorities allege Malek presented himself as a medical doctor, diagnosed patients with arterial disease and referred them for invasive procedures despite patients not having the condition. Tabaie allegedly performed the procedures, including repeat treatments on some patients who had previously undergone unsuccessful procedures.

First Assistant United States Attorney Bill Essayli criticized healthcare professionals accused of exploiting patients and insurance systems.

"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.

Essayli also described the financial consequences of the alleged schemes for patients and healthcare programs.

"Every dollar drained from our private and public health insurance systems is one less dollar available to those who truly need it," he said.

Another major case involves Nathan Young, 39, and his father, David Young, 71, who were arrested in connection with an alleged addiction treatment fraud operation. According to the Orange County Register, facilities associated with the Youngs submitted more than $1.6 billion in claims to private insurers and received more than $210 million.

Federal prosecutors allege the operation recruited people struggling with addiction, including homeless individuals, and directed them into treatment facilities for financial gain. The allegations include fraudulent insurance applications, inadequate or nonexistent therapy, illegal drug distribution and payments intended to induce patients to enter or remain in treatment.

Prosecutors also allege that patient brokers and the Youngs made decisions about treatment based on insurance profitability rather than medical need. One broker's text described a prospective patient using the phrase "The United girl has decided to come in …" in a discussion about placement at Rodeo Recovery.

Nathan Young responded to the broker's proposed placement with "Ok, I think it's a bad policy but sure," followed by "An Alaska" in a discussion comparing insurance coverage. The exchange continued with the broker writing, "Yes I was moving the (expletive) United back to sober living," according to the complaint described by the Orange County Register.

The complaint argued that the exchange reflected decisions about patients' levels of care being made by people without medical training.

"neither Nathan nor the broker have medical training, yet appear to be making medical decisions about patients’ level of care (lowering the United Health Care patient’s level of care from detox to sober living) based solely on the profitability of her insurance plan." the complaint stated.

The Youngs' attorneys challenged the legality of the arrests, arguing that federal agents initially relied on a search warrant rather than an arrest warrant. Their filing included the heading "Police with a warrant …" and alleged that the government used the search authorization to take the men into custody.

According to the attorneys, a judge issued a search warrant late on October 12, 2026. Agents arrived at David Young's home at 6 a.m. the following day, and Nathan Young subsequently surrendered after his lawyer was told agents were "waiting for him" at his apartment building.

The lawyers quoted the warrant's stated purpose and their objection to the arrests.

"It asked only to search. It did not ask to arrest. Yet an arrest is exactly what the government intended and accomplished." the filing said.

The filing also quoted agents' instructions when they arrived at David Young's home.

"DAVID YOUNG, POLICE WITH A WARRANT, COME TO THE DOOR," the attorneys said agents shouted.

The lawyers alleged that the government held both men without communication while preparing formal charges. Their filing stated, "And it left them there. Over that day and the next day (Oct. 14), while the Youngs sat incommunicado and arrested on a search warrant without charges, the government furiously drafted a charging document and arrest warrant on complaint to justify what it had done," according to the Orange County Register.

Prosecutors responded that they had 48 hours to complete the charging process. The Youngs posted $4 million bail each, surrendered their passports and were placed under home detention with remote monitoring. A hearing was scheduled for November 5.

The complaint also cited a presentation David Young emailed to facility employees on October 17, 2023, concerning patients who attempted to leave detox treatment.

"Have doctor prescribe something to knock the client out," the presentation instructed staff.

Another slide stated, "[e]asiest way to calm down a client is to medicate them," while a separate instruction read, "CALL DOCTOR" for an agitated patient. The presentation listed "Benzos – Diazepam, Xanax, Valium, Alprazolam," and described their expected "immediate effect."

Prosecutors also cited messages concerning a patient who left treatment against medical advice.

"Text evidence indicates that the Youngs understood the doctors’ role at the detox was to debilitate clients from leaving," the complaint stated.

In another exchange, Nathan Young responded to a message about a patient with Cigna insurance who had left the facility.

"I am just surprised they didn’t give him sleep meds," he wrote, according to the complaint.

The broader federal operation also targeted alleged hospice fraud and illegal medical kickback schemes. Prosecutors charged defendants accused of billing Medicare for more than $140 million through three hospice schemes involving patients who were allegedly not terminally ill.

Another defendant faced an indictment following an earlier charge in an alleged $270 million scheme involving fraudulent Medi-Cal pharmacy claims for prescriptions that did not exist, Yahoo reported.

California Post reporting described Malek's neighborhood reputation through accounts from residents, including one who said, "He was not a nice man," referring to the chiropractor.

In the addiction treatment case, prosecutors alleged that brokers recruited vulnerable people through support groups and other channels. Court documents described clients being told they could "lay out on [the] beach" while facilities billed insurers for treatment that was not provided.

The enforcement action comes amid broader federal efforts to investigate healthcare fraud. The Justice Department announced in June that a nationwide operation had charged 455 defendants in alleged schemes involving $6.5 billion across 45 states and territories, including California.

Mehmet Oz, head of the Centers for Medicare and Medicaid Services, addressed concerns about suspected fraud in public healthcare programs.

"When the numbers don't add up, we don't look the other way," Oz said in remarks announced Tuesday, according to Yahoo.

Federal officials had also paused $1.2 billion in reimbursements after raising questions about California programs serving seniors and people with disabilities. The state was already facing a separate $1.3 billion withholding announced in May over suspected fraud involving hospice and in-home care services.

Authorities said investigations into the California cases remained ongoing as defendants faced federal proceedings.