The immense scope of fraud being uncovered in the U.S. got much bigger on Thursday, as the California Post reported that Federal agents in Los Angeles busted a medical fraud ring that has bilked taxpayers of roughly $2 billion. Arrests were made for such crimes as performing unneeded surgeries, grabbing up homeless people to put in rehab, and phony hospice care, all being billed to the government.
Feds hold $867.5M in Medi-Cal over a fraud review. Deferral, not a cut. IEHP: 120,000+ face coverage loss under 80-hour work rules in January. Health Care Services never docked leave. Cost: $86,000. Only 1 in 5 L.A. hospitals screen for charity care. https://t.co/FNZzFhOePJ
— SaveCA (@saveCAtoday) October 16, 2026
The Department of Justice (DOJ) has charged 15 individuals for the medical fraud scams, including a $1.6 billion rehab fraud scam, the largest of its kind ever.
Two doctors, Dr. Hany Malek, a chiropractor who was described as having an "arsenal" in his $2 million mansion, and Dr. Harold Tabaie, a cardiothoracic surgeon, worked in tandem to defraud the government, but also put many patients at risk. The two are accused of stealing $134 million fraudulently billed to Medicare for artherectomy procedures that injured several patients.
Malek is not a medical doctor, but posed as one and would diagnose patients with arterial disease and recommend that they see Tabaie, who then performed the procedure, which is invasive and involves the use of a bladed catheter to clear plaque from arteries. In addition to Malek and Tabaie, officials are looking for Nathan Young and his father, David Young, in connection with operating a $1.6 billion substance abuse scam where they would recruit homeless people from around the country to come to Los Angeles rehab centers. The Youngs then billed insurance companies for treatment that was never rendered. Others charged in the fraud ring include those who operated fake hospice programs and took part in illegal medical kickback schemes that involved genetic testing.
WHOA! One of the men arrested this morning, Hany Malek, has a nearly 2-decade history of fraud! In 2008 Malek was accused by his business partner, Michael Koshak, of using a network of at least 18 bank accounts, 5 federal tax identification numbers, and 12 names to carry out and conceal fraud involving their medical business, Choice Providers. After a court-appointed receiver took control of the business, Malek violated the receivership order and was found guilty of 10 counts of contempt, receiving a sentence of 50 days in jail, $10,000 in fines, and payment of the receiver’s attorney fees. The trial judge also ordered him to return approximately $1.7 million, including interest, based on findings that he had diverted business funds, including by selling receivables. https://t.co/4bIs3ukInV
— Jennifer Van Laar (@jenvanlaar) October 22, 2026
First Assistant United States Attorney Bill Essayli said of the massive scam:
“It is especially egregious when doctors and other health care professionals, who pledged to do no harm, resort to petty greed and criminality. Every dollar drained from our private and public health insurance systems is one less dollar available to those who truly need it.”
"Dr." Hany Malek's neighbors described him as a "crook" who was living high on the hog at taxpayers' expense. In addition to his six-bedroom home with a sizeable pool, he parked a fleet of luxury cars and boats in trailers on the street. One of his neighbors bluntly stated, "He was not a nice man."
During a press conference on Thursday, Essayli stated that his office is not done yet rooting out fraud in California. Those arrested in the pre-dawn raid are scheduled to appear in a Los Angeles courtroom later on Thursday.
Next year, single guys who stay at home all day playing video games and who refuse to work, study, and/or volunteer 20 hours per week may lose Medi-Cal coverage. But County Supes have decided they should get free medical care anyway at local taxpayer expense. https://t.co/WGlff28Pia
— Marc Joffe (@marcjoffe) October 22, 2026