Father and son accused of drugging patients to bill insurers $1.6 billion

Federal prosecutors accuse Nathan Young and his father David of running a healthcare fraud scheme across Southern California that billed insurance companies more than $1.6 billion between 2020 and 2026. The pair operated addiction treatment facilities, including Rodeo Recovery in Beverly Hills, and received over $210 million in payments, according to criminal complaints filed by the Department of Justice.

Prosecutors allege the Youngs recruited patients through independent brokers who targeted people who were unhoused, in poverty, or attending substance abuse support groups. The brokers offered free flights, cash, apartments, cars, and other incentives to bring prospects to California. Once there, patients with high-reimbursing insurance policies received luxury accommodations, while others were placed in cramped and unsanitary housing.

The government argues the Youngs kept patients in their facilities to continue billing insurers. If a patient tried to leave, staff were instructed to administer medication to sedate them. Prosecutors also claim the pair coached patients to fabricate symptoms to qualify for detox services and encouraged them to use alcohol or drugs to maintain eligibility for treatment.

A court filing describes therapy sessions as Zoom meetings with over 100 attendees where patients only had to turn on their cameras. In some cases, patients were told to relax on the beach while the sessions were billed to insurance companies. Text messages obtained by prosecutors show Nathan Young making medical decisions based on insurance payouts, referring to a UnitedHealthcare patient as a "bad policy" compared to one with Alaska-based coverage.

The charges were part of a wider healthcare fraud crackdown that resulted in 15 defendants being charged across multiple states. Eight people were taken into custody on Thursday, including six medical professionals. The Youngs have not entered pleas. Their attorney, Reuven Cohen, stated that Nathan Young denies the allegations and plans to challenge the government's case in court.

David Young, 71, was taken into custody on Oct. 13. The family's attorneys wrote that agents pounded on the door of his home while calling for him. Nathan Young surrendered to agents in the lobby of his apartment building. Both men posted $4 million in bail and agreed to home detention while surrendering their passports ahead of a Nov. 5 hearing.

Assistant Attorney General Colin M. McDonald of the Justice Department's National Fraud Enforcement Division said the data would lead investigators to wherever the fraud occurs. Bill Essayli, first assistant U.S. attorney for the Central District of California, noted that every dollar drained from insurance systems is one less available for those who need care. Patrick Grandy, the assistant director in charge of the FBI's Los Angeles field office, added that the scheme cheats taxpayers and healthcare programs of billions of dollars.