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The Hollywood Hills man was sentenced Friday for more than three years in federal prison for paying kickbacks to those who referred patients to his Orange County rehabilitation facility.
Casey Mahoney, 48, was sentenced to 41 months in federal prison and ordered to pay a $240,000 fine, the U.S. Department of Justice said in a news release.
He was convicted in September as follows:
One count of conspiracy to recruit, receive, pay, or provide illegal rewards for patient referrals
Mahoney has recruited clients for two addiction treatment facilities he owns: Healing Path Detox LLC, based in Huntington Beach and Get Real Recovery Inc., based in San Juan Capistrano, using what is called a “body broker.”
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These brokers earned money to refer patients to rehabilitation, and in Mahoney’s case, “paid thousands of dollars in cash,” the prosecutor said.
Some of these patients were given drugs and are eligible for “a more advantageous level of care at Mahoney facilities,” prosecutors said. They were also occasionally referred to drug dealers at Orange County Motel. Some of these patients later died from overdose.
In this scheme and other such schemes, the goal is often a health insurance company.
“Mahony also requested that the broker be dispatched to track previous patients on the original insurance contract that his employees called his “most wanted list,” DOJ said.
Orange County rehabilitation workers illegally paid people to take addicted patients to their facilities, prosecutors say.
To conceal the scheme, Mahoney entered a “fake agreement” with a body broker who promised a fixed payment that was not determined by patient volume or value. But that wasn’t the case, prosecutors said.
“In reality, Mahoney and the broker negotiated payments based on the patient’s insurance reimbursement and the number of days Mahoney was able to claim for treatment,” the DOJ explained.
Mahoney is far from the only person accused of cheating in the Orange County drug rehabilitation industry.
Scott Rafa of Newport Beach was accused of a similar arrangement. Another OC rehabilitation worker was also similarly charged, who allegedly paid a bodybroker to refer the patient to him.
In another allegation scheme, six people worked together to ensure that calm living patients undergo medically unnecessary surgery that cost tens of millions of dollars.
“Brief bribes and kickbacks compromise the integrity of substance abuse treatment facilities and undermine patient care,” said US lawyers for Joseph McNally. “As the sentences imposed today show, those engaged in physical mediation will go to federal prisons.”
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