HomeOpinionMedical fraud busts reveal half of the story of homelessness in LA

Medical fraud busts reveal half of the story of homelessness in LA

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The $2 billion medical fraud bust by federal investigators in California this week lifted the lid on one of the nice scandals of the homelessness disaster.

Namely: Scam artists have been luring drug addicts to California from around the nation to attend “rehab” amenities that don’t really present therapy.

The scammers invoice insurance coverage — non-public or public — until the insurance policies’ protection runs out. Then they shove the addicts out onto the road.

FBI LA brokers arrest Hany Malek at his mansion for medical fraud in Tarzana, California, Thursday, Oct. 22, 2026. Carlin Stiehl for CA Post

That was one of the horrific and corrupt schemes uncovered this week in the federal raids and indictments. But it has been going on for many years in California.

Already, in 2017, the native media had caught onto the truth that some native rehab facilities were exploiting addicts to earn money, with out serving to their sufferers.

Obamacare really made the exploitation simpler, because the native market, Covered California, made it simple for individuals who have just arrived in the state to signal up for insurance coverage.

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That turned Southern California into the “Rehab Riviera.” Except there wasn’t a lot of rehab going on.

There are other causes for the surprising rise of homelessness. And loads of addicts have hit the streets in California with out going through a phony rehab program first.

But the truth that this phenomenon has continued — virtually in the open — for a decade or more is a shame.

United States Attorney for the Central District of California Bill Essayli speaks at a press convention at the previous Los Angeles Federal Courthouse after FBI LA arrested Hany Malek at his mansion for medical fraud in Los Angeles, Thursday, Oct. 22, 2026. Carlin Stiehl for CA Post

It factors to the downside of a giant welfare state. California creates extraordinarily beneficiant advantages, so it attracts poor individuals, who make use of them.

It also attracts crooks and fraudsters who study to use the system to enrich themselves. And the more cash the authorities spends, the more entrenched the downside becomes. 

Some of these arrested in the medical fraud bust are accused of luring addicts to California with items and guarantees of simple medicine, making their dependancy worse.

The purpose LA and California typically have struggled to cut back homelessness is that our leaders have been reluctant to tackle these issues.

Some of these arrested in the medical fraud bust are accused of luring addicts to California with items and guarantees of simple medicine, making their dependancy worse. Carlin Stiehl for CA Post

It’s simpler to fake the downside is just a lack of low cost housing, and to believe that throwing cash at the downside will resolve it. 

What we really want is braveness — the braveness to confront these who are making billons of {dollars} out of other individuals’s distress.

This week’s arrests can not be the last. We want to uproot the fraud and corruption in the “Rehab Riviera” and cease the exploitation of addicts that retains individuals on the streets.



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