A federal jury convicted a California man this week for paying illegal kickbacks for patient referrals to his addiction treatment facilities located in Orange County, California.
According to court documents and evidence presented at trial, Casey Mahoney, 48, of Los Angeles, paid nearly $2.9 million in illegal kickbacks to so-called “body brokers” who referred patients to Mahoney’s addiction treatment facilities, Healing Path Detox LLC and Get Real Recovery Inc. Those body brokers in turn paid thousands of dollars in cash to patients, which some patients used to purchase drugs, in order to induce those patients to attend treatment at Mahoney’s facilities. Mahoney concealed the illegal kickbacks by entering into sham contracts with the body brokers which purportedly required fixed payments and prohibited payments based off of the volume or value of the patient referrals. In reality, Mahoney and the brokers negotiated payments based on the patients’ insurance reimbursements and the number of days Mahoney was able to bill for treatment. Mahoney also laundered the proceeds of the conspiracy through payments to the mother of one of the body brokers, which Mahoney falsely characterized as consulting fees.
Mahoney was convicted of one count of conspiracy to solicit, receive, pay, or offer illegal remunerations for patient referrals; seven counts of illegal remunerations for patient referrals; and three counts of money laundering. He is scheduled to be sentenced on Jan. 17, 2025, and faces a maximum penalty of five years in prison on the conspiracy charge, 10 years in prison on each illegal remuneration count, and 20 years in prison on each money laundering count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Principal Deputy Assistant Attorney General Nicole M. Argentieri; U.S. Attorney Martin Estrada for the Central District of California; Assistant Director in Charge Akil Davis of the FBI Los Angeles Field Office; and Special Agent in Charge Tyler Hatcher of IRS Criminal Investigation (IRS-CI) Los Angeles Field Office made the announcement.
The FBI Los Angeles Field Office and IRS-CI Los Angeles Field Office investigated the case with valuable assistance from The California Department of Insurance.
Trial Attorney Siobhan M. Namazi from the Criminal Division’s Fraud Section and Assistant U.S. Attorney Nandor F.R. Kiss for the Central District of California are prosecuting this case.
Mahoney’s conviction arose out of violations under The Eliminating Kickbacks in Recovery Act (EKRA). EKRA was enacted in October 2018 as part of comprehensive legislation designed to address opioid crisis-related issues such as body brokering and substance abuse facility profiteering.
The Fraud Section leads efforts within The Criminal Division aimed at combating health care fraud through its Health Care Fraud Strike Force Program. Since March 2007, this program has charged over 5,000 defendants collectively responsible for billing federal health care programs and private insurers more than $24.7 billion across nine strike forces operating within 27 federal districts nationwide. Additionally partnering with Centers for Medicare & Medicaid Services alongside The Office Of Inspector General For The Department Of Health And Human Services aims towards holding providers accountable amidst healthcare fraud schemes.
More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.