Date: Sept. 13, 2024 Contact: newsroom@ci.irs.gov LOS ANGELES — A federal jury has found a Hollywood Hills man guilty of nearly a dozen felonies for paying illegal kickbacks for patient referrals to his addiction treatment facilities located in Orange County, the Justice Department announced today. Casey Mahoney was found guilty on Wednesday of one count of conspiracy to solicit, receive, pay, or offer illegal remunerations for patient referrals, seven counts of illegal remunerations for patient referrals, and three counts of money laundering. According to evidence presented at a nine-day trial, from at least October 2018 to December 2020, paid nearly $2.9 million in illegal kickbacks to so-called “body brokers” who referred patients to Mahoney’s addiction treatment facilities, the Huntington Beach-based Healing Path Detox LLC, and the San Juan Capistrano-based Get Real Recovery Inc. Those body brokers in turn paid thousands of dollars in cash to patients, which some patients used to purchase drugs, to induce those patients to attend treatment at Mahoney’s facilities. 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. Mahoney also laundered the proceeds of the conspiracy through payments to the mother of one of the body brokers, which Mahoney falsely characterized as consulting fees. The jury also found Mahoney not guilty of one count of aiding and assisting the preparation of a false tax document. United States District Judge Josephine L. Staton scheduled a January 17, 2025, sentencing hearing, at which time Mahoney will face a maximum penalty of five years in prison on the conspiracy charge, up to 10 years in prison on each illegal remuneration count, and up to 20 years in prison on each money laundering count. The IRS Criminal Investigation (IRS-CI) and FBI investigated this matter. The California Department of Insurance provided valuable assistance. Assistant United States Attorney Nandor Kiss of the Santa Ana Branch Office and Justice Department Trial Attorney Siobhan M. Namazi of the Criminal Division’s Fraud Section are prosecuting 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 in order 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 more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
