California rehab duo accused of $1.6 billion insurance fraud scheme

Nathan Young, known to clients as Pablo, and his 71-year-old father David were arrested after a federal indictment described one of the largest sober-home frauds in U.S. history. The indictment alleges they ran a network that recruited addicts with offers of cash, drugs and free travel, then coached them to overstate or invent substance-abuse problems to qualify for costly detox services. Over a six-year span the facilities submitted more than $1.6 billion in claims to major health insurers, receiving over $210 million for largely nonexistent therapy sessions.

An FBI affidavit details the use of “body brokers” and the provision of illegal drugs to patients. The scheme echoes a prior civil battle with insurer Aetna, which claimed the Youngs defrauded it of at least $40 million. Former clients described chaotic conditions, repeated relapses and eventual homelessness. The Youngs face charges of health-care fraud and violating anti-kickback statutes.