Federal raid nets $2 billion medical fraud suspects in Los Angeles

In a coordinated operation, federal law-enforcement agents surrounded the upscale Tarzana residence of Dr. Hany Malek, a chiropractor accused of posing as a physician and keeping an arsenal, before taking him into custody along with 14 co-defendants. The Department of Justice charged the group with submitting false claims to Medicare and private insurers, including $1.6 billion in sham rehabilitation billing—the biggest such case ever recorded.

Additional defendants are accused of operating fictitious hospice programs and participating in illegal kickback schemes for unneeded genetic tests.

First Assistant United States Attorney Bill Essayli called the conduct “especially egregious” and warned that the stolen dollars could have funded legitimate care. The suspects are slated to appear before a federal judge in downtown Los Angeles, and investigators say the inquiry remains ongoing.