A California man who ran addiction treatment facilities in Orange County was convicted this week of illegally paying nearly $3 million to refer patients to his facilities. According to federal prosecutors.
From at least October 2018 through December 2020, Casey Mahoney, 48, of Los Angeles paid nearly $2.87 million to “so-called ‘body brokers,'” who gave thousands of dollars to enroll patients at Healing Path Detox LLC. Huntington Beach and Get Real Recovery Inc. In San Juan Capistrano, two treatment centers were operated by Mr. Mahoney, the US Attorney’s Office for the Central District of California. said in a statement on Friday.
A statement from the department said that some of the money given to patients by body brokers is used by patients to buy drugs.
After a nine-day trial, a federal jury in Los Angeles on Wednesday convicted Mr. Mahoney of one count of conspiracy related to offering illegal remuneration for patient referrals; seven counts of unlawful remuneration for patient referrals; and three counts of money laundering, prosecutors said. He was acquitted of one count of aiding and abetting the preparation of a false tax document.
The money laundering charges, the most serious of which Mr. Mahoney was convicted, each carry a maximum sentence of 20 years in prison. Sentencing is scheduled for January 17, 2025.
Treatment facility operators may pay groups such as marketers or advertisers to promote their services to patients. But the elimination of kickbacks in the 2018 Recovery Act prevents operators from paying kickbacks to body brokers based on how much revenue they bring in, as Mr. Mahoney did.
Accountant testimony during the trial indicated that Mr. Mahoney earned about $25 million from his facilities from 2018 to 2020, Ciaran McEvoy, public information officer for the U.S. attorney’s office, said in an email Friday. Mr. McAvoy also said that the “vast majority” of patients at the facilities were “brokered.”
Mr. Mahoney concealed that he was paying body brokers by entering into “sham contracts” with body brokers based on the length of patients’ stays and the insurance revenue earned from the patients, prosecutors said. In one case, he hid payments by hiring a body broker’s mother for consulting work he never performed, prosecutors said in charging documents.
When Mr Mahoney was indicted in October 2021, a man accused of being a body broker, Joseph Parkinson, was also named and faced several charges, lawyers said at the time. Their cases were severed, and Mr. Parkinson, formerly of Costa Mesa, Calif., is scheduled to stand trial in February, according to court records.
Lawyers representing Mr. Mahoney and Mr. Parkinson did not immediately respond to an email seeking comment Friday.
The charges against Mr. Mahone came as part of a Justice Department effort called the Sober Homes Initiative, which investigates substance abuse treatment facilities that may offer kickback payments for patient referrals, according to Benjamin Baron, who helped prosecute the case. While he worked for the US Attorney’s Office and now works at Keller/Anderl LLP
Kenneth A. “These schemes take advantage of the most vulnerable members of our society — those with addictions seeking help,” Pollitt Jr., who was then an assistant attorney general for the Justice Department’s criminal division, said in a 2021 statement.
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