OC Rehab Scheme Saw Addicts Use Kickback Money For Drugs: Authorities

ORANGE COUNTY — A Los Angeles man paid nearly $2.9 million in illegal kickbacks for patient referrals to his addiction treatment facilities in Orange County, authorities said, adding that in some cases patients spent the kickback money on drugs.

Casey Mahoney, 48, was convicted of one count of conspiracy, three counts of money laundering and seven counts of illegal remunerations, the US. Department of Justice announced Friday.

Mahoney operated Healing Path Detox LLC and Get Real Recovery Inc. and paid kickbacks to “body brokers” who referred people to the facilities, with the brokers passing on thousands of dollars in cash to the patients — which some used to buy drugs — to convince them to attend treatment, authorities said.

Mahoney hid the kickbacks with sham contracts when in reality he and the brokers negotiated payments based on patients’ insurance reimbursements and how many days he could bill for treatment, according to the department. Mahoney also laundered money from the conspiracy through payments to the mother of one of the brokers, which Mahoney presented as consulting fees, authorities said.

Mahoney is set to be sentenced Jan. 17 and faces up to 20 years in prison for each money laundering count, 10 years for each remuneration count and five years for the conspiracy count, according to the department.