Nathan Young, 39, and his father, David Young, 71, face federal charges that they spent years moving vulnerable patients through sham substance-abuse treatment in the Los Angeles area. Prosecutors say the pair controlled dozens of purported treatment companies and billed insurers for care that was not what the claims described. They were set to be arraigned Thursday in downtown Los Angeles.
The Justice Department has called the alleged operation the largest substance abuse treatment fraud scheme it has ever prosecuted. The sums in a federal criminal complaint are specific: roughly $1.62 billion claimed, and about $210 million paid.
Six Years Of Claims
The complaint alleges that the Youngs submitted approximately $1,619,276,243 in insurance claims from about May 2020 through at least May 2026. Insurers, it says, paid the Young facilities approximately $210,274,793 on those claims. The charging statute identified in the complaint is health care fraud under 18 U.S.C. § 1347.
Prosecutors say the father and son controlled dozens of purported substance-abuse treatment companies in the Los Angeles area. Courthouse News Service reported that federal prosecutors described them as owners of dozens of drug-treatment facilities in Southern California. Named in the case are Helping Hands Rehabilitation Clinic Inc., Get Real Recovery Inc. and Sunset Rehab.
On the government's account, that was a long run for companies selling treatment. The complaint treats the claims as fraudulent billing, not as a dispute over a few miscoded sessions. Whether a jury ever sees it that way is a separate question from what the charging papers allege.
Body Brokers And The Policies They Wanted
Federal prosecutors allege the Youngs directed body brokers to target homeless people and addicts attending 12-step programs. Those brokers, prosecutors say, sought individuals whose insurance offered the most generous reimbursements. The U.S. attorney's office has described the overall scheme as trafficking vulnerable patients into sham treatment.
The indictment alleges that prospective patients were lured with illegal kickbacks, including flights, money, apartments, hotel stays, cars, gift cards, marijuana, cigarettes, illegal drugs and prescription medications. The complaint's own list of inducements runs through money, apartments, hotel stays, cars, gift cards, marijuana, cigarettes, controlled substances and other prescription medications.
Coverage, in that account, sorted people. Prosecutors say patients with inadequate insurance were placed in cramped, unsanitary, crowded and often derelict housing they called trap houses. The generous policies were the ones the brokers were allegedly told to find.
Medication, Family And A Blocked Door
The U.S. attorney's office alleges the Youngs had patients drugged with medication and cut off from communication with family members. Courthouse News, describing the complaint, reported that patients were also prevented from accessing their belongings and physically blocked from leaving.
The indictment further alleges that doctors employed by the Youngs dispensed prescription medications freely. Those are accusations in a charging case, and they describe isolation as well as billing: people allegedly kept medicated, out of reach of relatives, and unable to walk out with their own things.
One Screen, 181 Names
Court papers allege that the substance-abuse therapy consisted of Zoom sessions with more than 100 attendees, and that participants were not required to participate. One attendance list dated June 29, 2024, included the names of 181 unique participants, the complaint says.
An attendance sheet is not a treatment plan. Prosecutors are pointing at a session that large, with no obligation to take part, as the care behind claims that ran into the billions. The complaint treats that group screen as the therapy, not as a supplement to individual clinical work.
A Denial, Bonds And Older Cases
Nathan Young's attorney, Reuven Cohen, told Courthouse News Service, "Mr. Young denies the allegations and looks forward to challenging the government's case." The defendants are awaiting trial on bonds of $4 million each.
Behavioral Health Business reported on October 23 that the defendants had not entered pleas and that no trial date had been set. Thursday's arraignment was the date then on the calendar.
The case sits in a treatment business that grew after coverage rules changed. Courthouse News reported that the Affordable Care Act made mental-health and substance-abuse treatment essential health benefits, and that guaranteed coverage helped produce a boom in drug treatment. Looking at 39 behavioral-health billing-fraud cases the Justice Department charged in June, Behavioral Health Business said addiction-treatment providers accounted for 68.7% of the suspected fraud in that group.
Earlier prosecutions have already produced long sentences in the same industry, in cases that are not this one. In 2020, Chris Bathum, who owned a chain of some 20 drug-treatment centers and sober-living homes, was sentenced to 52 years in prison for sexually assaulting female patients and for fraudulent insurance billing. Jonathan and Daniel Markovich were sentenced to more than 15 years and eight years, respectively, for billing insurers $112 million for medically unnecessary drug-treatment services.
Civil court has its own figure. InsuranceNewsNet reported that a dispute between Health Net and Sovereign Health lasted about six years before Sovereign was ordered to pay $45 million in 2022. For the Youngs, the immediate date was Thursday's arraignment, with Nathan Young, through counsel, saying he will contest the charges.
