Date: March 21, 2025
Contact: newsroom@ci.irs.gov
LOS ANGELES — A Hollywood Hills man was sentenced today to 41 months in federal prison for paying illegal kickbacks for patient referrals to his addiction treatment facilities located in Orange County.
Casey Mahoney was sentenced by United States District Judge Josephine L. Staton, who also fined him $240,000.
At the conclusion of a nine-day trial in September 2024, a jury found Mahoney guilty of one count of conspiracy to solicit, receive, pay, or offer illegal remunerations for patient referrals and seven counts of receiving illegal kickbacks for patient referrals.
“This defendant illegally profited millions of dollars off of addicts who desperately needed help,” said Acting United States Attorney Joseph McNally. “Bribes and kickbacks compromise the integrity of substance abuse treatment facilities and undermine patient care. As the sentence imposed today demonstrates, those that engage in body brokering will go to federal prison.”
The charges relate to Mahoney’s operation of two addiction treatment facilities: the Huntington Beach-based Healing Path Detox LLC, and the San Juan Capistrano-based Get Real Recovery Inc.
From at least October 2018 to December 2020, Mahoney paid nearly $2.9 million in illegal kickbacks to so-called “body brokers” who referred patients to Mahoney’s addiction treatment facilities. Those body brokers in turn paid thousands of dollars in cash to patients. Brokered patients sometimes were dropped off at motels in Orange County and introduced to drug dealers. Some of these patients later overdosed and died.
Brokers also arranged for patients to receive drugs to make them eligible for more lucrative levels of care at Mahoney’s facilities. Mahoney paid one broker $140,000 per month for additional patients despite knowing that brokers offered to get some patients high. Mahoney also requested that his employees send brokers to track down former patients with lucrative insurance policies, which he called his “most wanted list.”
Throughout the scheme, Mahoney concealed the illegal kickbacks by entering into sham contracts with the body brokers which purportedly required fixed payments and prohibited payments based off of the volume or value of the patient referrals.
In reality, Mahoney and the brokers negotiated payments based on the patients’ insurance reimbursements and the number of days Mahoney was able to bill for treatment.
The IRS Criminal Investigation (IRS-CI) and FBI investigated this matter. The California Department of Insurance provided valuable assistance.
Assistant United States Attorney Nandor F.R. Kiss of the Orange County Office and Justice Department Trial Attorney Siobhan M. Namazi of the Criminal Division’s Fraud Section prosecuted this case.
Mahoney’s conviction arose out of violations of the Eliminating Kickbacks in Recovery Act (EKRA). EKRA was enacted in October 2018 as part of comprehensive legislation designed to address the opioid crisis and to target the rise in body brokering and substance abuse facility profiteering.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,000 defendants who collectively have billed federal health care programs and private insurers more than $24.7 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes.
IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a 90% federal conviction rate. The agency has 20 field offices located across the U.S. and 14 attaché posts abroad.