Man profits off patients’ addictions, pays brokers to lure them to CA clinics, feds say
A man who runs two California addiction treatment facilities paid nearly $2.9 million in kickbacks to “body brokers” accused of doing “whatever it took” to lure patients to his clinics, according to federal prosecutors.
Casey Mahoney’s companies made roughly $24 million during the illegal scheme that spanned two years, prosecutors wrote in court documents. The earnings largely came from patients being corruptly recruited to his clinics in Orange County while they struggled with drug addiction, according to prosecutors.
After the brokers received kickbacks, Mahoney knew they’d give large amounts of cash to prospective patients, prosecutors said.
“Some of these brokered patients were then dropped off at motels where drug dealers would prey on their newly cash-rich customers,” prosecutors wrote in court filings, ahead of Mahoney’s sentencing on March 21.
Several patients bought drugs with the money the brokers gave them, according to prosecutors, who said “some would then overdose and die.”
“The government has not alleged (Mahoney) wanted this outcome — only that he was indifferent to it,” prosecutors said. “To him, these patients were cattle; commodities to be traded based on their insurance companies’ wiliness to pay him millions.”
In September, a federal jury found Mahoney guilty of conspiracy to solicit, receive, pay or offer illegal remunerations for patient referrals and seven counts of receiving illegal kickbacks for patient referrals, according to the U.S. Attorney’s Office for the Central District of California.
Now, a judge has sentenced Mahoney, 48, of Hollywood Hills, to three years and five months in prison on those charges, the U.S. Attorney’s Office said in a March 21 news release.
In an emailed statement to McClatchy News on March 26, Atoosa N. Esmaili, one of Mahoney’s defense attorneys, said the government wanted Mahoney to receive a nearly 16-year sentence.
However, Esmaili said the judge issued “a sentence less than 1/5th of what the government sought” and “rejected every single sentencing argument forwarded by the government.”
Esmaili also said that the U.S. Attorney’s Office’s news release left out how, at trial, the jury acquitted Mahoney of a tax-related count. Afterward, the judge acquitted Mahoney of money laundering counts, Esmaili added.
In a statement, Acting U.S. Attorney Joseph McNally said “this defendant illegally profited millions of dollars off of addicts who desperately needed help.”
“Bribes and kickbacks compromise the integrity of substance abuse treatment facilities and undermine patient care.”
While operating Healing Path Detox LLC in Huntington Beach and Get Real Recovery Inc. in San Juan Capistrano, Mahoney paid illegal kickbacks from October 2018 to December 2020, prosecutors said.
One broker was paid $140,000 a month by Mahoney in exchange for recruiting more patients to the clinics, according to prosecutors.
“(Mahoney) was aware these patients were being given cash and drugs to make them eligible for treatment and to motivate them to come to his facilities,” prosecutors wrote in sentencing memorandum. “He didn’t care.”
He also knew that some brokers “offered to get some patients high,” prosecutors said.
Several patients had finished weeks of addiction treatment when they were targeted by his brokers, prosecutors said.
Some received treatment at Mahoney’s facilities, according to prosecutors, who said he wanted them to return because they had well-paying insurance policies.
Mahoney kept the names of former patients with “lucrative insurance policies” on what was known as his “most wanted list,” prosecutors said.
When Mahoney sent his brokers to target previous patients, he didn’t consider whether further treatment would benefit them, according to prosecutors.
“What the brokers did in executing this criminal scheme was horrifying, but there would be no supply without the demand and (Mahoney) was very demanding,” the sentencing memorandum says.
To hide how he was paying brokers kickbacks, Mahoney entered into bogus contracts with them, according to prosecutors.
Mahoney was convicted under the Eliminating Kickbacks in Recovery Act, which became a law in 2018 in response to the U.S. opioid crisis and an increase in “body brokering,” the U.S. Attorney’s Office said.
Ahead of sentencing, Mahoney’s defense counsel contended he “did his best” to legally operate his businesses under what they described as a complex, new law.
After Mahoney’s own experience with addiction in his family, his defense counsel wrote that he was inspired to open his clinics. His attorneys contended he always had good intentions and cared for his patients’ well-being.
“Mr. Mahoney’s conviction in no way detracts from the value of the addiction recovery services he provided to clients or the high standard of care he strived to offer,” they wrote.
Mahoney plans to file an appeal, according to Esmaili.
“We are confident that, on appeal, the Ninth Circuit will reject the remaining EKRA (Eliminating Kickbacks in Recovery Act) counts by simply taking a closer look at the scope of the government’s impossibly broad and capricious theory of prosecution under EKRA,” Esmaili said.
As part of Mahoney’s sentence, U.S. District Judge Josephine L. Staton ordered him to pay a $240,000 fine.
McNally said that his sentencing shows “those that engage in body brokering will go to federal prison.”
One of Mahoney’s body brokers is named as his co-defendant. This defendant’s trial was continued from Feb. 18 to July 22, court records show.
His defense attorney, Kenneth Reed, declined McClatchy News’ request for comment.
This story was originally published March 24, 2025 at 12:10 PM with the headline "Man profits off patients’ addictions, pays brokers to lure them to CA clinics, feds say."
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