It was very hard to leave the addiction treatment empire of Nathan and David Young: Clients were drugged with medication, cut off from communication with family members, prevented from accessing their belongings and even physically blocked when they tried to bolt, a federal complaint says.
Clients were referred to not by name, but by insurance policy, it continued. “The United girl has decided to come in …,” said a text from a broker, proposing to put her into expensive detox treatment at Rodeo Recovery. “Ok, I think it’s a bad policy but sure,” Nathan Young responded. “An Alaska would be 20 times better….”
A week later, a client with better “Alaska”-type insurance came along, and “United” was booted. “Yes I was moving the (expletive) United back to sober living,” the broker texted Nathan Young.
This exchange is problematic, the federal complaint says, because “neither Nathan nor the broker have medical training, yet appear to be making medical decisions about patients’ level of care (lowering the United Health Care patient’s level of care from detox to sober living) based solely on the profitability of her insurance plan.”
After years of wrongful death and injury claims, a $40 million lawsuit from Aetna accusing the Youngs of weaponizing addiction for profit, reporting by the Southern California News Group and revoked licenses from the state government, Nathan Young and his father David Young have been arrested on federal charges of healthcare fraud.
That includes submitting fraudulent health insurance applications on behalf of prospective patients; providing patients with illegal drugs to maintain addiction so they cycled through the Young facilities for as long and as many times as possible; billing for non-existent and woefully inadequate “therapy” sessions; and giving patients financial inducements in exchange for enrolling and remaining in treatment, “often referred to as ‘patient brokering’ or ‘body brokering,’” the complaint said.
The Young facilities submitted more than $1.6 billion in claims to private health insurers and were paid more than $210 million, it said.
They are on home detention with remote monitoring after posting $4 million bail, each. Passports were surrendered. A hearing is slated for Nov. 5.
While reformers welcomed the arrests — while still bemoaning how California’s insipid system continues to allow abuses to flourish — Nathan Young has long maintained that his only desire has been to help people.
A countersuit the Youngs filed against Aetna painted the Youngs’ operations in a saintly light: Unlike many other treatment facilities, they were willing to treat homeless people, those with behavior issues, prior convictions and other history that “fancier” providers might turn away, they said in the countersuit. (which was dismissed). The Aetna suit settled for an undisclosed sum.
‘Police with a warrant …’
Attorneys for the Youngs argue that the arrests were illegal and paint a harrowing picture of how things went down.
Late on the night of Oct. 12 — at 11:25 p.m. — the government got a search warrant from United States Magistrate Judge Patricia Donahue, the Youngs’ lawyers said in a motion for release. “It asked only to search. It did not ask to arrest. Yet an arrest is exactly what the government intended and accomplished.
“The next morning, on Oct. 13, 2026, at 6 a.m., more than a dozen agents pounded on the door of David’s home, screaming repeatedly, ‘DAVID YOUNG, POLICE WITH A WARRANT, COME TO THE DOOR,” it said. “(A)gents proceeded to raid the home, taking 71-year-old David into custody. Within the hour, the government induced Nathan Young’s surrender by representing to his counsel … that agents were ‘waiting for him’ in the lobby of his apartment building — implying there was an arrest authority to which he must submit. There was none.”
After taking both men into custody, the government prevented them from appearing in court, instead routing them to the Metropolitan Detention Center, the filing said. “And it left them there. Over that day and the next day (Oct. 14), while the Youngs sat incommunicado and arrested on a search warrant without charges, the government furiously drafted a charging document and arrest warrant on complaint to justify what it had done,” the filing said.
They accused the government of violating the Fourth Amendment (using a search warrant as an instrument to accomplish what the government deliberately declined to ask a federal judge to authorize); the Constitution (which forbids drawing a person out of his home under the false color of a warrant); rules (holding an arrestee incommunicado while the government decides whether and what to charge); and Rules of Professional Conduct (forbidding a prosecutor from deceiving opposing counsel).
Prosecutors responded that they had 48 hours to do that work, and they did.
‘Knock the client out’
SCNG has been reporting versions of the Rehab Riviera story for nearly a decade, and has been following the controversy over the Young operations for years. So while some of the federal allegations are quite familiar, some details are eye-popping.
“On October 17, 2023, David emailed Young Facility employees a PowerPoint presentation he prepared which instructed staff that, when dealing with patients who tried to leave detox, they should ‘Have doctor prescribe something to knock the client out,’ and that the ‘[e]asiest way to calm down a client is to medicate them,’” the complaint said.
Another slide instructed staff to “CALL DOCTOR” in the event of an “agitated client,” providing a list of drugs available including “Benzos – Diazepam, Xanax, Valium, Alprazolam,” which David Young said would have an “immediate effect.”
“Text evidence indicates that the Youngs understood the doctors’ role at the detox was to debilitate clients from leaving,” the complaint says. “For example, on or about February 10, 2023, in response to a text message … informing him that a patient with Cigna insurance had left the facility against medical advice, Nathan responded: ‘I am just surprised they didn’t give him sleep meds,’” it says.
When prospective clients said they weren’t really interested in more rehab, brokers were reassuring: “participation in ‘therapy’ would be minimal; s/he just had to turn on their video camera and then go ‘lay out on beach,’” the complaint says. Those “purported therapy sessions” were conducted remotely on Zoom with as many as 100 patients logged on, “where no therapy was provided.” The Youngs made employees fabricate patient records, taking patients out to the movies and billing it as “group therapy.”
Patients who were newly enrolled in insurance plans, but whose coverage hadn’t kicked in yet, were kept in “stabilization houses” with no supervision or treatment, where they were able to use drugs and alcohol, the complaint says.
The Youngs labeled patients “premium” and “non-premium,” it says. Those with high-reimbursing insurance policies got luxurious accommodation, stays in hotels and private apartments, dinners and other inducements, while those with low-reimbursing policies “lived in cramped, unsanitary, crowded and often derelict housing and had to rely on government assistance for food.”
When an employee encouraged other patients to find work while going through treatment, Nathan Young said “he preferred that his patients sit on a couch, unemployed, for 9-10 months because this led to a higher relapse rate,” the complaint says.
Nathan Young was known as “Pablo” and David Young as “Sancho.” They disguised their control of dozens of facilities by putting them in the names of front men and shell companies, prosecutors said. The facilities included Helping Hands Rehabilitation Clinic, Get Real Recovery, Rodeo Recovery, Ocean Valley Behavioral Health, Healing Path Detox, Joser Forever, Natural Rest House, Sunset Rehab, Fremont Rehab, The Kiloby Center, Antioch Rehab, Redding Rehab, Corte Madera Rehab, Shasta County Rehab, Elmo Detox, Rocklin Rehab, Sacramento Rehab, Vital Steps Recovery and La Jolla Rehab. Nathan Young also owned 55 Silver and 9 Silver.
‘This must stop’
Christine Hand and Anthony Morrison were patients lured to the Young empire from Oklahoma in 2023. They were happy at first; they worked with good therapists and case managers, they got sober, they took jobs working for the company treating them.
But as time went on, things just didn’t seem right, they said. Sober homes where people were allowed to smoke weed and get high. Therapy sessions held via Zoom with scores of patients rather than in person with an intimate group. Some workers paid low wages while others were paid well. There were insurance oddities. Overdoses. Deaths.
Their self-confidence grew in lockstep with their commitment to sobriety — and so did their determination to do something. They complained, in writing, about all manner of alleged transgressions in missives to police stations and government officials from Los Angeles to Sacramento.
“I have been waiting several years to see this finally take place,” Hand said Wednesday. “The issue goes far beyond insurance fraud. These allegations have victims. Victims I have seen suffer displacement, relapse and death as a result of the Youngs’ neglect. Let us push forward to the next step of creating a new standard for this much-needed treatment industry.”
Morrison hopes and prays that this becomes something more than just the prosecution of a few, “but rather a light to shine on a truly broken and fragile system. The damage caused by these individuals and others in this industry goes further than just insurance companies … families that seek help are lost in searching for guidance.”
Insurance crackdowns in fraud’s wake have denied better care to people who really need it and made it harder for reputable providers to get reimbursed, he said. Officials need to stop talking about making things better and “put boots on the ground in the battle to create an effective industry with real results.”
Other activists have been working with victims and families for years.
“For those of us who have advocated for accountability, this is a significant moment,” said Melissa Delise Ruby, who runs the 8,000-member “It’s Time for Ethics in Addiction Treatment” Facebook group. “Yet I cannot help but also feel sorrow. Thousands of individuals were impacted by the alleged negligence of the Youngs and their associates. For those who lost their lives, there is no outcome that will ever feel like justice enough.
“California is still riddled with an outrageous number of fraudulent homes and facilities, and patient brokering remains rampant across the country. Survivors are often not believed when they come forward to speak about the harm they endured … there is still a lot of work left to be done.”
Activist Jennifer Barton heard firsthand about the mistreatment, exploitation and devastating consequences victims and their families endured, she said.
“One victim said to me, ‘Jennifer, how do I get out of here? How do I break this cycle? I want to leave but I can’t seem to get out.’ This is why cases like this need to be highlighted and punished to the full extent. This was never just about insurance fraud. It was about human lives, shattered families and vulnerable people who sought help but were allegedly exploited instead.”
Karen Gold is an attorney who recently settled myriad cases against Nathan Young’s 55 Silver companies involving 92 people. Sixteen of them are children whose parents died.
She applauded the FBI’s work, but bemoaned the tragically weak systems that allow fraud to flourish. “I do not believe it is safe to have a multi-billion dollar industry licensed and regulated by an underfunded Department of Healthcare Services which does not have the resources to police what has become a widespread and dangerous criminal enterprise in California,” Gold said.
“We need federal oversight by Medicare to license, regulate and police these non-medical residential detox and treatment facilities. More and more, I see criminal body brokering and health insurance fraud schemes, and operating intensive outpatient programs virtually through unregulated sober living homes, as the rule not the exception.
“This must stop. We cannot wait until more people are victimized or die before we do something. By the time I file my cases, or the U.S. Justice Department prosecutes, it’s too late.”
The case was brought by Daniel Frey, FBI Special Agent, Special Agent Clayton Flacker with the Internal Revenue Service, Criminal Investigations, and Annel Peraldi with the Drug Enforcement Administration.