A criminal investigation by a federal grand jury is under way into the once-sprawling addiction treatment empire of Nathan Young and associates, according to documents filed in federal court, and the feds want information dug up by insurance giant Aetna over the past two years.
Aetna filed a $40 million civil lawsuit against Young and co. in 2023, saying Young’s sober living homes throughout Southern California were little more than drug dens that weaponized addiction for profit by cycling patients from one entity to another and encouraging relapse so that billing cycles could start anew. Separately, federal investigators have been poking around Young’s operations for years, according to former patients or employees, though the feds would neither confirm or deny a criminal probe, as is their custom.
Now, however, that criminal probe is on the record.
Last month, Aetna received a subpoena from the U.S. Department of Justice’s criminal fraud division asking the insurer for “any and all records” pertaining to Young and co.’s use of “body brokers” or “marketers” to recruit patients to their programs. The subpoena also sought records of payments and “kickbacks (whether monetary or in non-cash benefits)” to said body brokers, as well as to patients who were recruited. In addition, federal investigators asked for records Aetna has gathered about how Young’s operations allegedly enrolled people in health benefit plans using false information, and subsequent billings for services; documentation of services provided and “records pertaining to patients’ participation in telehealth group sessions provided by, or billed for, by the programs affiliated with the Young Lawsuit Defendants.”
Patients have said those telehealth sessions were attended by scores of people, allowing for enormous billings. A former therapist was told to mark everyone on the call as “present,” even if they logged off mid-session or never showed up, according to a wrongful termination lawsuit. which also alleges that in Young’s rehab empire it was “expected and routine” to over-report attendance.
“(T)he pattern and practice of fabricating attendance was, at least in part, to permit fraudulent billings to client/patient health insurers,” the suit said. As long as people had good insurance, “these addicts were given drugs, money, jobs, housing, and other services in exchange for being a patient at the facilities.”
“Especially disgusting” is how the therapist described the practice of “patient/body brokering,” his suit said.
Young and others named in the suits deny wrongdoing, and Young has defended his work by saying he’s just trying to help people on the lower rungs of society’s ladder stay sober, find jobs and reintegrate into society. The Southern California-based businesses — which operated under names such as Helping Hands Rehabilitation Clinic, Joser Forever, Get Real Recovery, Healing Path Detox LLC; Rodeo Recovery, and Sunset Rehab, among others — were the subject of numerous articles in this newspaper and one in the Wall Street Journal; printouts of same were included in the federal court filings.
Three deaths connected to rehab facilities in 2024 have something in common: Those who died were seeking help in the rehab empire overseen by Nathan Young, aka “Pablo Lopez,” and associates. From left, Margaret Dickerson, Benjamin Barragan and Emmanuel Mitchell. (Illustration by Jeff Goertzen, Orange County Register/SCNG)
Young and his associates have denied wrongdoing in myriad wrongful death and personal injury lawsuits filed by former patients and their families.
In light of the federal criminal probe, Young’s attorneys have asked the federal civil court to put Aetna’s suit on ice until the former runs its course.
A “stay,” as such a freeze is officially called, is warranted because of “the existence of a parallel criminal investigation of the same conduct of Young Defendants alleged by Aetna in this civil action,” a filing by Young’s attorneys said.
“(T)he parallel criminal investigation directly implicates the Fifth Amendment rights against self-incrimination of Defendants Nathan Young and David Young (collectively, “Individual Defendants”), as well as the Fifth Amendment rights of other current and former employees and contractors of Young Defendants, whose testimony may be relevant to the allegations in this civil action filed by Aetna,” it continued.
This “Scam Alert” from the state of Delaware warned people about treatment centers linked to Nathan Young, according to business documents filed with the California Secretary of State
“Absent a stay of this entire action, Individual Defendants will be forced to choose between two extraordinarily prejudicial options—either (1) waive their constitutional rights and continue to fully defend against Aetna’s claims, giving federal prosecutors evidence to potentially use against them in the criminal matter, or (2) exercise their constitutional rights and maintain their silence, which may result in adverse inferences in this case and leave Young Defendants, including Individual Defendants, defenseless against a potential judgment in the tens of millions of dollars.”
Aetna disagrees.
Stays are rarely if ever granted where no indictment has yet been returned, the insurer’s attorneys said in court filings. The only exceptions involve “(a) short delays based on time-limited investigations into police shootings, or (b) circumstances demonstrating that indictments were all but certain to issue soon, either because federal authorities had executed search warrants and made prosecution referrals, or because prosecutors had previewed imminent charges. Nothing close to those circumstances is present here.
“Rather, Defendants seek a seemingly unprecedented and indefinite stay of this action until the [Department of Justice] decides whether to seek indictments. And they base their request solely on a single grand jury subpoena that does not even identify the targets of the apparent healthcare fraud investigation, which regularly take years and often end with no charges and no formal notice of completion.”
Exhaustingly long timelines aside, the news was welcomed by Melissa Delise Ruby, who runs the 7,800 member “It’s Time for Ethics in Addiction Treatment” group on Facebook.
“Finally, confirmation that there’s a federal criminal investigation into Young and his counterparts,” she said. “We’ve been following Nathan Young and his counterparts for years. People have been coming forward by the hundreds. This is finally an indication to all of us that things are moving.”
