A Hollywood Hills man, Casey Mahoney, has been sentenced to 41 months in federal prison for his involvement in a kickback scheme related to patient referrals at addiction treatment facilities. United States District Judge Josephine L. Staton also imposed a $240,000 fine on Mahoney.
Mahoney was convicted by a jury in September 2024 on one count of conspiracy to solicit, receive, pay, or offer illegal remunerations for patient referrals and seven counts of receiving illegal kickbacks. Acting United States Attorney Joseph McNally commented on the case: “This defendant illegally profited millions of dollars off of addicts who desperately needed help.” He emphasized that bribes and kickbacks compromise the integrity of substance abuse treatment facilities.
The charges against Mahoney are linked to his operation of two addiction treatment centers: Healing Path Detox LLC in Huntington Beach and Get Real Recovery Inc. in San Juan Capistrano. Between October 2018 and December 2020, Mahoney paid nearly $2.9 million in illegal kickbacks to "body brokers" who referred patients to these facilities. These brokers often paid cash to patients and sometimes introduced them to drug dealers, leading some patients to overdose.
Brokers arranged for patients to use drugs so they could qualify for more expensive care levels at Mahoney's facilities. Despite knowing about these practices, Mahoney continued paying one broker $140,000 monthly for additional patients. He also directed employees to track down former patients with lucrative insurance policies.
Mahoney disguised the illegal payments through sham contracts with brokers that appeared legitimate but were actually based on insurance reimbursements and billing days.
The investigation was conducted by the FBI and IRS Criminal Investigation with assistance from the California Department of Insurance. Assistant United States Attorney Nandor F.R. Kiss and Justice Department Trial Attorney Siobhan M. Namazi prosecuted the case.
Mahoney’s conviction relates to violations of the Eliminating Kickbacks in Recovery Act (EKRA), which was enacted as part of legislation addressing the opioid crisis and body brokering issues.
The Fraud Section leads efforts against health care fraud through the Health Care Fraud Strike Force Program. Since its inception in March 2007, this program has charged over 5,000 defendants involved in schemes costing federal health programs over $24 billion.
More information is available at www.justice.gov/criminal-fraud/health-care-fraud-unit.