Nathan and David Young: alleged $1.6 billion sham rehab fraud

Federal prosecutors in Los Angeles charged Nathan Young and his father, David Young, in what the Justice Department called the largest case of its type it has ever prosecuted. According to the indictment, the Youngs controlled dozens of purported substance abuse treatment companies and billed private insurers more than $1.6 billion. Body brokers, including Honey Phipps and Cody Phipps of Greenville, Texas, allegedly recruited people who were homeless, in poverty or attending support groups, offering free flights, money, housing and drugs to bring them to Southern California.

Prosecutors allege that many patients were housed in crowded, unsanitary "trap houses," cut off from family, physically blocked from leaving and drugged if they tried to go, so the facilities could keep billing their insurance. Much of the "therapy" was allegedly Zoom sessions with more than 100 attendees.

The charges, announced on October 22, 2026, include conspiracy to commit health care fraud and wire fraud and conspiracy to violate the Eliminating Kickbacks in Recovery Act. A related defendant, Nicholas Moore, pleaded guilty and admitted helping the Youngs submit $199 million in fraudulent claims.