Federal prosecutors indicted David Young, 71, and his son Nathan Young, 39, who operated drug treatment and sober-care facilities in Los Angeles, as part of a 15-defendant case the Department of Justice described as the “largest substance abuse treatment fraud scheme” it has prosecuted, according to the Western Journal’s report citing the Los Angeles Times and federal filings.
What the complaint alleges
According to a federal criminal complaint, the Youngs created policies to keep patients from leaving “the Young Facilities” so insurance billing could continue. The complaint states patients were “drugged with medication, cut off from communication with family members, prevented from accessing their belongings, and physically blocked from leaving.”
An FBI affidavit by Special Agent Daniel Frey details the allegations and sought arrest warrants. A cooperating witness told the FBI the Youngs directed staff to transfer patients from stabilization and sober living houses to detox facilities “regardless of whether it was medically necessary,” the affidavit says.
Inside the messages and the ‘knockout’ slide
Frey’s affidavit alleges a PowerPoint dated Oct. 17, 2023, from David Young appears to instruct staff to “have doctors prescribe something to knock the client out” when patients tried to leave detox.
The affidavit also says the father and son used the aliases “Pablo Lopez” (Nathan) and “Sancho Lopez” (David) in texts with employees about handling patients who wanted to leave. In one exchange cited in the affidavit, a cooperating witness texted “Pablo” that a patient was “freaking out” and wanted to return to sober living. “I would do edibles offsite,” “Pablo” replied, calling it a “loop hole,” according to the filing.
How patients were recruited, per filings
The Times reported prosecutors alleged the Youngs worked with “body brokers” to target homeless individuals nationwide for sobriety treatment, then sent them to the Youngs’ facilities and prevented them from leaving to keep insurance reimbursements flowing.
Separately, Frey’s affidavit claims employees lured prospective patients to Southern California with free flights, money, apartments, hotel stays, cars, gift cards, marijuana, cigarettes, controlled substances — including illegal drugs — and other prescription medications dispensed by doctors employed by the Youngs. The Times also reported prosecutors alleged the Youngs fraudulently enrolled people in insurance policies they weren’t eligible for to retain reimbursements.
The money at stake
From approximately May 2020 to May 2026, the Youngs submitted about $1.6 billion in insurance claims and received $210,274,793 in plan payments, while billing for “non-existent and woefully inadequate ‘therapy’ sessions,” the criminal complaint asserts.
Status and timing
The Times reported each defendant posted $4 million bail, surrendered passports, and agreed to home detention, with a hearing set for Nov. 5. The DOJ’s California healthcare fraud prosecution announcement came days after the Centers for Medicare & Medicaid Services said it deferred $1.2 billion in Medicaid funds to California.
These are allegations. The defendants are presumed innocent unless and until proven guilty.
