Federal crackdown uncovers $135M Medicare surgery fraud scheme in Los Angeles
LA healthcare fraud takedown results in 15 arrests
The Justice Department charged 15 people—including six healthcare workers—for allegedly running $2 billion in fraudulent medical schemes, including fake addiction treatment, unnecessary artery surgeries, and bogus hospice services.
LOS ANGELES - A major federal crackdown on healthcare fraud unfolded in Tarzana on Thursday, resulting in the arrests of chiropractor Dr. Hany Malek and cardiothoracic surgeon Dr. Harold Tabaie.
The pair face an indictment charging them with running a $135 million scheme that billed Medicare for medically unnecessary, invasive arterial procedures while operating two Los Angeles-area clinics.
What we know:
A federal indictment charges Dr. Harold Tabaie, 78, of Anaheim, and Dr. Hany Malek, 61, of Tarzana, with four counts of healthcare fraud, while Malek faces two additional counts of bank fraud.
The charges center on performing unnecessary Atherectomies – an invasive procedure using a bladed catheter to clear arterial plaque – at West Regional Cardio Thoracic and Vascular Surgeons in Inglewood and Angelus Medical Clinic Multi Specialty Group in Boyle Heights.
Malek allegedly posed as a medical doctor while wearing a white lab coat to diagnose patients with non-existent arterial disease and recommended surgery. According to officials, Tabaie then performed the invasive operations on patients who did not have arterial disease, including repeated Atherectomies on previously treated individuals that caused permanent physical damage, ongoing pain, and extreme discomfort.
To conceal the high procedural volume, Malek and Tabaie allegedly fraudulently billed under the names of other providers who did not perform the surgeries.
According to the indictment, Tabaie and Malek enticed Medicare beneficiaries with illegal kickbacks, such as free transportation, groceries, household goods, gift cards, and utility bill payments, to maintain patient volume.
Chiropractor Dr. Haney Malek / U.S. Attorney's Office
Clinic employees, acting at Malek's direction, allegedly convinced patients to disenroll from existing insurance plans and reenroll in specific Medicare plans designed to maximize clinic reimbursements.
Law enforcement identified the case using data analytics, which flagged Tabaie as an extreme national outlier for billing atherectomy procedures.
Additionally, Malek faces bank fraud charges for allegedly submitting a fraudulent Paycheck Protection Program (PPP) loan application in 2021.
Officials said Malek diverted clinic revenue to a shell company used to pay employees and falsely claimed a gross receipts reduction of over 25% from 2019 to 2020. Though he claimed the loan was for payroll, Malek allegedly used the funds for personal expenses, other business ventures, family credit card payments, and coin purchases.
Investigating agencies include the FBI, the U.S. Department of Health and Human Services Office of Inspector General, the IRS Criminal Investigation unit, and the U.S. Marshals Service.
What we don't know:
Authorities have not disclosed the total number of patients subjected to unnecessary atherectomies across both clinic locations.
Multiple arrests made in healthcare fraud bust in Tarzana
FOX 11's Gigi Graciette speaks with Acting U.S. Attorney Bill Essayli about the operation.
The full extent of physical injuries and long-term harm suffered by affected victims is unconfirmed as health officials continue evaluating impacted patients.
What they're saying:
U.S. Attorney Bill Essayli highlighted the severe human impact of the fraudulent operations during the arrest at Malek's home, emphasizing that the targeted patients were victims rather than co-conspirators. "This gentleman, along with a co-defendant, were indicted on a hundred and thirty five million dollar fraud scheme where they were ordering surgeries and performing surgeries that were medically unnecessary, which actually resulted in people being harmed," Essayli said. "This is the worst type of healthcare fraud because you have doctors who are supposed to be doing no harm. They are putting their financial interest again over the interest of their patients to make money so they can live at nice mansions like this."
Addressing the ongoing struggles of those treated at the clinics, Essayli added, "A lot of them are suffering from pain, they had some permanent damage, so I don't think they'll ever be okay."
IRS Criminal Investigation Assistant Special Agent in Charge Oleg Pobereyko underscored the financial tracking that exposed the network. "Healthcare is not a victimless crime, right? And the IRS CI will follow the money and expose the truth," Pobereyko said.
Tarzana home where Dr. Haney Malek was arrested by federal authorities on Thursday, Oct. 22, 2026. / FOX 11
What's next:
Malek and Tabaie will face initial court appearances in federal district court to address the charges outlined in the indictment.
What you can do:
The Justice Department Fraud Division is utilizing the Victim Notification System to provide potential victims with updates and case information.
If you believe you or your family members were impacted by procedures at either clinic, you are urged to contact the Fraud Division's Victim Assistance Unit by calling 1-888-549-3945 or emailing victimassistance.fraud@usdoj.gov.
The Source: This report is based on federal indictment documents, official statements from the U.S. Attorney's Office and IRS Criminal Investigation, and details released by multi-agency federal task forces including the FBI and HHS-OIG.