E. Martin Estrada, U.S. Attorney | U.S. Attorney's Office for the Central District of California
A Hollywood Hills resident, Casey Mahoney, has been sentenced to 41 months in federal prison for his involvement in a kickback scheme related to patient referrals at addiction treatment facilities. United States District Judge Josephine L. Staton also imposed a $240,000 fine on Mahoney.
Mahoney, aged 48, was convicted by a jury in September 2024 of conspiracy and multiple counts of receiving illegal kickbacks for patient referrals. Acting United States Attorney Joseph McNally commented on the case stating, "This defendant illegally profited millions of dollars off of addicts who desperately needed help." He emphasized that such actions undermine the integrity of substance abuse treatment facilities.
The charges against Mahoney involved his management of two addiction treatment centers: Healing Path Detox LLC in Huntington Beach and Get Real Recovery Inc. in San Juan Capistrano. From October 2018 to December 2020, he paid approximately $2.9 million in illegal kickbacks to "body brokers" who referred patients to his facilities. These brokers were known to pay cash incentives to patients and sometimes facilitated their access to drugs.
In some instances, brokered patients were taken to motels where they encountered drug dealers; tragically, some overdosed and died. The brokers also arranged for patients' drug use to qualify them for higher levels of care at Mahoney's centers. Despite knowing this practice, Mahoney compensated one broker with $140,000 monthly for additional patient referrals.
To hide these illicit payments, Mahoney established sham contracts with body brokers that falsely claimed fixed payments unrelated to referral volume or value. In reality, payment negotiations were based on insurance reimbursements and billing days achieved through patient treatments.
The investigation into this matter was conducted by the FBI and IRS Criminal Investigation unit with support from the California Department of Insurance. Prosecution was led by Assistant United States Attorney Nandor F.R. Kiss and Justice Department Trial Attorney Siobhan M. Namazi.
Mahoney's conviction is tied to violations under the Eliminating Kickbacks in Recovery Act (EKRA), enacted as part of broader legislation addressing the opioid crisis since October 2018.
The Fraud Section continues its work against health care fraud via the Health Care Fraud Strike Force Program which has charged over 5,000 defendants collectively responsible for more than $24 billion billed fraudulently since March 2007.
