FBI dawn raids hit $1.8 billion California health fraud

Around 6 a.m. on October 22, 2026, FBI agents scaled a hillside in Tarzana, flash bangs cracking through the quiet as they moved on the mansion of chiropractor Hany Malek. Moments later the 61-year-old was in handcuffs and led away. Prosecutors say the house itself stood as the visible return on years of fraudulent Medicare billing.

Later that day in Los Angeles, First Assistant U.S. Attorney Bill Essayli, Assistant Attorney General Colin M. McDonald, and federal partners announced charges against 15 defendants, including six medical professionals, in health care fraud cases that collectively produced nearly $2 billion in alleged claims against public and private insurers. Eight defendants were arrested that morning; others already faced charges. The Justice Department’s official tally put the fraudulent claims at $1.8 billion in one release and roughly $2 billion in another. All remain allegations. Defendants are presumed innocent unless proven guilty.

Malek and 78-year-old cardiothoracic surgeon Harold Tabaie of Anaheim sit at the center of one scheme. Prosecutors allege Malek posed as a physician, diagnosing the need for invasive endovascular procedures that scrape plaque from blood vessels with a bladed catheter. Tabaie then performed the atherectomies, sometimes on vessels that showed no disease, and sometimes repeatedly. “As part of this scheme, a chiropractor was purportedly diagnosing the need for invasive endovascular procedures that involved removing plaque from blood vessels with a bladed catheter,” McDonald said. Essayli was blunter about motive: “This was all just to bill Medicare. They would churn money—so they can buy mansions like this.” He added that surgeons told patients the first operation had failed so another could be scheduled. The pair allegedly billed Medicare roughly $134 million to $135 million for the unnecessary work. Malek faces four counts of health care fraud and two of bank fraud; Tabaie faces four counts of health care fraud. An unnamed neighbor offered a short verdict on Malek: “He was not a nice man.”

The largest case is the substance-abuse treatment scheme prosecutors call the biggest of its kind the Department of Justice has ever brought. Father and son David Young, 71, and Nathan Young, 39, both of Los Angeles, along with Honey Phipps, 42, and Cody Phipps, 36, of Greenville, Texas, allegedly controlled dozens of purported treatment companies. Body brokers recruited the unhoused, the poor, and people attending 12-step groups, steering them toward policies with the richest reimbursements. Inducements included free flights, hotel stays, cash, gift cards, apartments, cannabis, and, according to the indictment, illicit drugs. Once enrolled, many received little or no real care. Some were pushed to take drugs or alcohol so they would appear eligible for detox, McDonald said. Others who tried to leave were allegedly drugged “to knock the client out.” Premium patients with high-paying insurance got hotels and dinners; others were housed in crowded, derelict rooms. Private insurers were billed more than $1.6 billion. Nicholas Moore has already pleaded guilty and admitted helping submit about $199 million in claims.

Three separate hospice schemes allegedly billed Medicare more than $138 million for patients who were not terminally ill. Another defendant faces indictment in a nearly $270 million Medi-Cal pharmacy fraud case built on bogus prescriptions. Kickbacks for genetic testing and patient referrals appear in the broader set of charges as well.

At the press conference Essayli stated the moral line plainly: “It is especially egregious when doctors and other health care professionals, who pledged to do no harm, resort to petty greed and criminality.” McDonald framed the enforcement posture: “Our message is simple: if you steal health care dollars from the American taxpayer or abuse your position to harm patients, we are coming for you – and the data will lead us to wherever you are.” He added, “Today is not the end of our work in Los Angeles. We will root out the fraud that has permeated this town and this state.” FBI Director Kash Patel tied the arrests to a wider White House Task Force to Eliminate Fraud, saying the bureau would keep dismantling networks that steal from taxpayer-funded programs designed to help the most vulnerable.

The schemes matter because every diverted dollar is a dollar unavailable for legitimate care, and because some patients were physically injured by procedures they did not need. Medicare and Medi-Cal are taxpayer-funded programs; private premiums ultimately rest on the same households. When operators treat patients as billing units—recruiting the addicted with drugs, repeating artery scrapes, parking non-terminal people in hospice—the insurance pools that ordinary workers and retirees pay into are looted. Limited government depends on the ability to police the programs it does run. Free enterprise depends on honest contracts between providers, patients, and payers. Rule of law requires that licenses and credentials not become cover for theft. The record does not yet contain detailed public defenses from the charged defendants beyond the procedural fact that lawyers were not immediately listed for several of them; the Daily Wire noted outreach that produced no immediate counsel of record for the Phippses.

Data analytics flagged the unusual volume of atherectomies. Multi-agency work by the FBI, HHS-OIG, IRS Criminal Investigation, and DEA Diversion followed the money and the patient flow. Since 2007 the Health Care Fraud Strike Force has charged more than 6,200 defendants in cases involving over $45 billion in billed claims. Southern California remains a focal point.

Five of those arrested on October 22 were expected to make initial appearances that afternoon in downtown Los Angeles federal court; others were set for Texas and Illinois. The charges are only the opening of the cases. McDonald’s promise to keep rooting out fraud in the city and the state now moves from announcement to the docket, where judges, juries, and the evidence will decide what the taxpayers and the patients actually recover.