Court battle could expose ugliest strategies of drug rehab business

“Bro,” the text chain says, “you can make so much (expletive) money off these junkies. Their (sic) going to use anyway.”

“What do you mean I can make more,” came the reply.

“U can market for pablo. (sic) We all get a kickback for each client we bring in. Basically we send them to detox send them to a house where there’s free house weed and benzo maintenance so we can just keep recycling them through. Some of the house managers make a little extra selling hard on the side if you know what Im saying.”

Ah, addiction treatment in California!

This little gem is featured in Aetna’s latest federal court filing against Nathan Young, (aka “Pablo”), and his drug treatment empire. Young weaponizes addiction for profit, the insurance giant charges in a $40 million federal lawsuit, asserting that Young’s businesses cycled patients from one entity to another and encouraged relapse so that billing cycles could start anew.

As we’ve documented for years now, rehab can be a deadly business. “In addition to massive financial fraud, there are also widespread reports of deaths and serious patient harm at Defendants’ facilities, and the state of California reportedly closed several of the facilities based on Defendants’ falsification of records, among other things,” Aetna said.

Young and others named in the suit deny wrongdoing. But as their latest spat comes to a boil in civil court — more on that in a minute — the recently unsealed criminal indictment against Nicholas William Metzger Moore adds a potentially interesting masala to the mix.

Moore was charged with multiple counts of “conspiracy to solicit, receive, pay and offer illegal remuneration for referrals to clinical treatment facilities” — and failure to file a tax return. Mysteriously unnamed are the “co-conspirators” and facilities Moore allegedly worked with. But business records show that Moore was Young’s secretary and chief financial officer at the Kiloby Center for Recovery in Rancho Mirage, and Moore is identified as “marketer/broker” in a recent Aetna filing against Young et al (“According to Defendants’ internal records, several key personnel had email addresses registered with Gmail and other popular email services. These email addresses appear to have been dedicated to marketers/body brokers’ work with Defendants, such as Nick Moore’s email address “[email protected]” ….).

Anyway, as the federal heat grows hotter in California, folks have taken to opening treatment facilities in other states. A man named Nicholas Moore was identified as the managing member of Blue Sky IOP, a treatment center in Durham, North Carolina. Business records filed with the North Carolina Secretary of State show a man named Moore formed Blue Sky in 2024, and sold it to William Hedges of Fountain Valley in September.

Moore has pleaded not guilty to the federal charges, and his attorney declined further comment, for this story and about Blue Sky.

Seething

So Aetna sued Young et al two years ago, claiming their “sober living homes were little more than drug dens.” Young filed counterclaims against Aetna, claiming the insurer ‘cynically and unscientifically’ denied payments, which may have resulted in people’s deaths. The court dismissed those counterclaims.

While Young et al have produced some eye-popping documents in the course of litigation — (“if you got insurance, it has to be a PPO, it has to be private pay … like Aetna … I can fly you out to detox, and put you into detox for 21 days, so you can take Xanax everyday, you can (explitive) take suboxone, they provide you with weed, they provide you with cigarettes, so if you’re trying to make some bread bro … then I’ll give you $2,500 after that … you just gotta have the right health insurance ….”) — the process has grown so fraught that Aetna is asking a judge to impose sanctions.

“This sprawling, $40-million-dollar RICO case has now reached the point where it will be virtually impossible for Aetna’s experts to complete their analyses” by December deadlines, the company’s attorneys said. Aetna still doesn’t have the documents needed to figure out who to depose, let alone digest all the evidence and take depositions.

“But that’s just the start,” Aetna’s filing adds. “Defendants recently told Aetna that they are no longer affiliated with most of their body brokers and that they apparently lack access to the brokers’ communications. Aetna will now have to subpoena these body brokers to a degree far beyond the initially estimated scope of third-party discovery. Even worse, all indications are that Defendants did not instruct their body brokers to preserve evidence, and that they did not collect or preserve the body brokers’ communications either. Enforcing subpoenas to Defendants’ former workers will also likely be burdensome because, as Aetna has worked to find these individuals, it has come to light that some of them are in jail or facing criminal charges, and some have expressed their intent to invoke the Fifth Amendment or otherwise try to avoid compliance.

“On top of all that, Defendants just provided Aetna with information that raises serious spoliation concerns—including that they allegedly lack access to one of the main email accounts used during the relevant period by the ringleader of the scheme, Nathan Young. That is a big problem because the account is on scores of relevant emails, including hundreds sent since this case began.

“Further, after Judge (Jean P.) Rosenbluth ordered Defendants to detail their discovery efforts, they revealed that they waited until about ten months after the case started to collect and preserve emails from Nathan Young’s other primary account, and that they are just now collecting and preserving emails from at least one of Defendant David Young’s accounts. Aetna does not yet seek spoliation sanctions, but the problems that persist with respect to the Youngs’ emails are emblematic of how Defendants’ unjustifiably late discovery efforts led to their violation of Judge Rosenbluth’s Order and other issues.”

Aetna has asked the court for an order imposing sanctions on Helping Hands Rehabilitation Clinic, Inc., Get Real Recovery LLC, Healing Path Detox LLC, Ocean Valley Behavioral Health, LLC, Rodeo Recovery LLC, Sunset Rehab LLC, Natural Rest House, Inc., Joser Forever, Nathan Young, David Young, 9 Silver and 55 Silver. The defendants had been ordered to produce documents by Sept. 18 but had not complied as of Oct. 27, Aetna said in court documents. A hearing is slated for Nov. 24.

‘Poorly drafted’

Young et al oppose sanctions, they said in a filing on Nov. 3, but “take very seriously their failure to comply with Magistrate Judge Rosenbluth’s discovery order issued on August 14, 2025.”

The order gave them 35 days to comply, which was simply not enough time, they argued.

“Young Defendants have diligently endeavored to comply with Aetna’s far-reaching discovery requests, employing 26 lawyers and a team of eDiscovery professionals at great expense, to collect, review, and produce documents from key centralized databases and numerous custodians applying a long and comprehensive list of search terms,” their filing said.

“Aetna argues that Young Defendants waited too long to start their document collection. This argument is unfair. As Aetna describes it, this case is a ‘sprawling, $40-million-dollar RICO case’ that seeks to claw back over 18,000 insurance claims, spanning 249 substance use disorder clients served by Provider Defendants …. Despite the size of this case, Aetna did not serve any discovery requests until March 28, 2025, one year and four months into the case….The discovery requests were poorly drafted and overbroad in numerous material respects.”

Despite “great efforts,” the Young Defendants could not meet the document production deadline and contacted Aetna’s counsel on Sept.5 to discuss a new deadline and narrowing search terms, its filing said. “Aetna refused to agree to any extension and ignored the invitation,” it said.

These cases are long and slow. A similar battle between Health Net and Sovereign Health dragged on for some six years before Sovereign was ordered to pay $45 million in 2022.

The seemingly dry battles over document production, though, are vitally important to understanding how this troubled segment of the health care business works, and what might be done to address its failings.

“Aetna anticipates showing that Defendants paid kickbacks to doctors and other medical providers to benefit from their medical licenses and to obtain referrals,” it said in a filing.

We’ll be digging into the doctor angle soon.

©2025 MediaNews Group, Inc. Visit ocregister.com. Distributed by Tribune Content Agency, LLC.