LA Man Convicted in Sober Living Kickback Scheme

LOS ANGELES (CNS) - A Los Angeles man has been found guilty of paying illegal kickbacks for patient referrals to his addiction treatment facilities, the U.S. Department of Justice announced Friday.

Casey Mahoney, 48, was convicted in Los Angeles federal court on Wednesday of one count of conspiracy, seven counts of illegal remunerations for patient referrals, and three counts of money laundering, according to the DOJ.

Mahoney was found to have paid nearly $2.9 million in illegal kickbacks to so-called "body brokers" who referred patients to his Orange County addiction treatment facilities, Healing Path Detox and Get Real Recovery Inc.

Those body brokers in turn paid thousands of dollars in cash to patients, which some patients used to purchase drugs, in order to induce those patients to attend treatment at Mahoney's facilities.

Evidence presented during the nine-day trial in downtown Los Angeles showed Mahoney concealed the illegal kickbacks by entering into sham contracts with the body brokers which purportedly required fixed payments and prohibited payments based off of the volume or value of the patient referrals.

In reality, the DOJ said, Mahoney and the brokers negotiated payments based on the patients' insurance reimbursements and the number of days Mahoney was able to bill for treatment. Mahoney also laundered the proceeds of the conspiracy through payments to the mother of one of the body brokers, which Mahoney falsely characterized as consulting fees, the jury found.

Mahoney faces a possible maximum penalty of decades behind bars at sentencing on Jan. 17, prosecutors said.