A man from Hollywood Hills has been found guilty of multiple felonies related to illegal kickbacks for patient referrals to his drug treatment facilities in Orange County. The Justice Department announced that Casey Mahoney, aged 48, was convicted 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.
The trial revealed that between October 2018 and December 2020, Mahoney paid nearly $2.9 million in kickbacks to "body brokers" who referred patients to his addiction treatment centers: Healing Path Detox LLC in Huntington Beach and Get Real Recovery Inc. in San Juan Capistrano. These brokers allegedly paid patients cash incentives, which some used to buy drugs, encouraging them to seek treatment at Mahoney's facilities.
Mahoney reportedly disguised these payments through fake contracts with the brokers that falsely indicated fixed payment terms unrelated to the volume or value of patient referrals. However, evidence showed that payments were actually negotiated based on insurance reimbursements and billable days for treatment. Additionally, Mahoney laundered money by paying a broker's mother under the guise of consulting fees.
The jury acquitted Mahoney on one count related to aiding and assisting the preparation of a false tax document. His sentencing is scheduled for January 17, 2025. He faces up to five years in prison for conspiracy charges, up to ten years per count for illegal remuneration charges, and up to twenty years per count for money laundering charges.
The investigation was conducted by the FBI and IRS Criminal Investigation with assistance from the California Department of Insurance. The case is being prosecuted by Assistant United States Attorney Nandor Kiss and Justice Department Trial Attorney Siobhan M. Namazi.
Mahoney’s conviction relates to violations under the Eliminating Kickbacks in Recovery Act (EKRA), legislation aimed at tackling body brokering and profiteering within substance abuse facilities amid the opioid crisis.
The Fraud Section spearheads efforts against health care fraud via the Health Care Fraud Strike Force Program. Since its inception in March 2007, this program has charged over 5,000 defendants involved in fraudulent billing exceeding $24.7 billion against federal health care programs and private insurers.
More information can be accessed at www.justice.gov/criminal-fraud/health-care-fraud-unit.
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