A Hollywood Hills man has been handed a 41-month prison sentence for his involvement in a fraudulent scheme centering around addiction treatment facilities. Casey Mahoney, 48, was found guilty of engaging in illegal kickback practices for patient referrals, which netted nearly $2.9 million. The sentencing took place in a federal court where U.S. District Judge Josephine L. Staton also imposed a $240,000 fine against Mahoney.
According to the U.S. Attorney's Office for the Central District of California, Mahoney operated two treatment centers in Orange County and over two years used "body brokers" to direct patients to his facilities. These brokers, incentivized by illegal payments, went as far as to improperly secure patients and introduce some of them to drug dealers, resulting in overdoses and fatalities in certain cases. These illegal activities were found to have actively compromised the integrity of substance abuse treatment and patient care.
Acting United States Attorney Joseph McNally was quoted saying, "This defendant illegally profited millions of dollars off of addicts who desperately needed help." McNally highlighted the serious nature of these offenses by stating, "Bribes and kickbacks compromise the integrity of substance abuse treatment facilities and undermine patient care. As the sentence imposed today demonstrates, those that engage in body brokering will go to federal prison."
The trial concluded in September 2024, where Mahoney was convicted on one count of conspiracy to solicit, receive, pay, or offer illegal remunerations for patient referrals, along with seven counts of receiving illegal kickbacks. The evidence presented demonstrated that Mahoney sought to actively conceal the kickback scheme through sham contracts designed to appear legitimate while basing payments on the volume or value of patient referrals and insurance reimbursements. The brazen approach by Mahoney disrupted the process of recovery for many individuals who were to hope only to seek help with their addictions.
The FBI and IRS Criminal Investigation were credited with uncovering the details of Mahoney's operation. The California Department of Insurance assisted, and the case was prosecuted by Assistant United States Attorney Nandor F.R. Kiss of the Orange County Office and Department of Justice Trial Attorney Siobhan M. Namazi of the Criminal Division's Fraud Section.
