A prison cell at the Historic Brushy Mountain State Penitentiary in Petros, Tenn., on Thursday, March 2, 2023. The former state penitentiary is home to Brushy Mountain Distillery. Nas Distilling Brushy Mountain Bp
Los Angeles, California – A Hollywood Hills man was sentenced on Friday to 41 months in federal prison for orchestrating an illegal kickback scheme involving patient referrals to his addiction treatment facilities in Orange County.
Casey Mahoney, 48, was handed the sentence by United States District Judge Josephine L. Staton, who also imposed a $240,000 fine. Mahoney’s conviction follows a nine-day trial in September 2024, where a jury found him guilty of one count of conspiracy to solicit, receive, pay, or offer illegal remunerations for patient referrals, along with 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.”
Mahoney operated two addiction treatment facilities: Healing Path Detox LLC in Huntington Beach and Get Real Recovery Inc. in San Juan Capistrano. Prosecutors detailed how, between October 2018 and December 2020, Mahoney paid nearly $2.9 million in illegal kickbacks to “body brokers” who referred patients to his facilities. These brokers, in turn, paid thousands of dollars in cash to patients, often incentivizing them with drugs to ensure their eligibility for higher levels of care.
The scheme had deadly consequences. Some patients referred through brokers were abandoned in motels in Orange County, where they were exposed to drug dealers. Tragically, some later overdosed and died.
Evidence presented at trial showed that Mahoney paid one broker $140,000 per month despite knowing that brokers were facilitating drug use among patients. Additionally, Mahoney directed his employees to track down former patients with lucrative insurance policies, referring to them as his “most wanted list.”
To conceal the illicit transactions, Mahoney entered into sham contracts with body brokers that falsely claimed to involve fixed payments rather than payments based on the volume or value of referrals. In reality, payments were directly tied to patient insurance reimbursements and the number of billable treatment days.
The FBI and IRS Criminal Investigation led the probe into Mahoney’s scheme, with assistance from the California Department of Insurance. Prosecutors Nandor F.R. Kiss of the Orange County Office and Justice Department Trial Attorney Siobhan M. Namazi led the case against him.
Mahoney’s conviction falls under the Eliminating Kickbacks in Recovery Act (EKRA), a law enacted in October 2018 to combat body brokering and profiteering in addiction treatment facilities amid the opioid crisis.
The Health Care Fraud Strike Force Program has aggressively pursued health care fraud cases since its inception in 2007. To date, the program has charged over 5,000 defendants responsible for fraudulent billings totaling more than $24.7 billion. Federal agencies continue to hold providers accountable for their roles in such schemes. More information is available at www.justice.gov/criminal-fraud/health-care-fraud-unit.
