DOJ Announces Record $1.6B EKRA Prosecution in California Takedown
DOJ's October 22, 2026 California takedown charges 15 defendants over nearly $2 billion in alleged fraud, including five EKRA cases tied to $1.6 billion in private insurance claims — the statute's largest prosecution to date.
On October 22, 2026, DOJ announced a Central District of California health care fraud takedown charging 15 defendants over nearly $2 billion in allegedly fraudulent claims to government and private payors. Two cases — United States v. Young (No. 2:26-cr-00670) and United States v. Maldinich (No. 8:26-cr-00121) — charge five defendants with violating the Eliminating Kickbacks in Recovery Act (EKRA) over $1.6 billion billed to private insurers, which DOJ calls the largest sober home fraud scheme it has ever prosecuted. Allegations include recruiters paid in cash, flights, hotel stays, cars, gift cards and controlled substances; higher-reimbursement patients given more luxurious accommodations; and patients sometimes hired as employees to disguise kickbacks as salaries. Separate cases cover allegedly unnecessary arterial procedures, hospice fraud involving non-terminally ill patients, and fraudulent Medi-Cal prescriptions.
Counsel should also weigh the paired regulatory move: on September 25, 2026, DOJ denied the American Clinical Laboratory Association's petition to broaden EKRA's employee safe harbor, citing United States v. Schena, 142 F.4th 1217 (9th Cir. 2025), and a 1998 advisory opinion on percentage-based marketing, without endorsing Schena's dicta that such arrangements are not automatically unlawful. Providers, laboratories and referral marketers should test compensation and referral arrangements against EKRA directly rather than assuming Anti-Kickback Statute compliance suffices, and watch for EKRA charges in other districts.