Five arrested in alleged $267M hospice fraud scheme that exploited California's Medi-Cal system

Five radical person been arrested arsenic portion of an alleged multi-million dollar hospice fraud strategy successful California, officials said Thursday.

California Attorney General Rob Bonta said the ringing defrauded the authorities of much than $267 cardinal done fraudulent billing to Medi-Cal, the state-administered Medicaid program. In total, 21 radical person been charged.

The arrests were portion of a authorities probe dubbed "Operation Skip Trace," which targeted locations successful Southern California.

California Attorney General Rob Bonta connected Thursday announced charges against 21 radical suspected of participating successful a monolithic hospice fraud ring. (Myung J. Chun/Los Angeles Times)

"This transgression scheme, this transgression operation, was nary accident," Bonta told reporters astatine a quality league to denote the arrests. "It wasn't a lawsuit of billing errors, cutting corners, oregon up-charging care. This was a brazen, calculated transgression strategy that exploited the Medi-Cal system, stole from the State of California and Medicaid, and prevented services and attraction from going to sick individuals who really request it."

The probe began with a extremity from the authorities Department of Health Care Services alleging hospice fraud astatine 14 companies. Bonta's bureau investigated the companies and 8 radical suspected of wealth laundering.

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State Assemblymember Alexandra Macedo enters the Merabi Professional Medical Plaza Building successful Van Nuys connected March 13, 2026. Macedo said she recovered 197 hospices registered to this code and, with different Republican lawmakers, called connected Gov. Gavin Newsom to code abuses successful the industry. (Sarah Reingewirtz/MediaNews Group/Los Angeles Daily News)

Investigators recovered that those progressive purchased idiosyncratic identifying accusation for radical surviving extracurricular of California connected the acheronian web, past enrolled them successful Covered California by posing arsenic California residents.

"Straw owners" past bought a fig of hospice companies and began billing Medi-Cal for services ne'er provided to those stolen identities. The suspects utilized fake records, nonexistent offices, and fraudulent diagnoses to warrant these claims, Bonta said.

"Meanwhile, the alleged patients were healthy, out-of-state, and wholly unaware that they had been enrolled successful hospice care," helium said.

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California Health and Human Services Secretary Kim Johnson said the DHCS halted payments and suspended each fraudulent hospice providers. "There is simply a moratorium presently successful spot done January 2027 for caller licensed providers," Johnson noted.

"Once the wealth was paid out, it was funneled done a analyzable web of implicit 130 ammunition companies and hidden crossed slope accounts, outgo apps, and cryptocurrency to evade detection," Bonta added. "The wealth was laundered."

No existent aesculapian services were provided, Bonta noted. He said each 21 suspects are accounted for done arrest, progressive warrants, oregon notices to look earlier a judge. While announcing the suspected fraud, Bonta besides criticized the Trump medication amid its claims of rampant fraud successful California.

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"There are those successful this national medication who tin lone spot things done a governmental lens and privation to politically weaponize [this]," helium said. "And they emotion to spell aft the fourth-largest system successful the world, the top authorities successful the nation, the large authorities of California."

California has been astatine the halfway of fraud concerns successful caller weeks and has been called retired by the national anti-fraud task unit led by JD Vance. Last week, 8 radical were arrested arsenic portion of a national expanse tied to an alleged $60 cardinal fraudulent Medicare billing scheme, Fox 11 Los Angeles reported.