Bonta announces crackdown on $267M LA hospice fraud operation
LOS ANGELES (KESQ) - Charges have been filed against 21 suspects in what California Attorney General Rob Bonta described today as the "dismantling" of a major hospice fraud scheme that siphoned $267 million from the state.
The announcement comes a week after federal officials in Los Angeles trumpeted their own crackdown on $50 million in Medicare fraud schemes for end-of-life services that either were not medically necessary or never provided.
Bonta said Thursday that so-called "Operation Skip Trace'' resulted in the arrest of five people after a dozen locations were searched in Southern California. In addition, two handguns and over $757,000 in cash were seized, the California Department of Justice said.
"Over the life of this fraud scheme, not a single legitimate hospice service was ever provided yet millions were billed in a brazen, calculated scheme that exploited the Medi-Cal system,'' Bonta said in a statement.
"This wasn't a mistake or a loophole; it was deliberate fraud,'' he continued. "This kind of abuse undermines trust, drains critical resources, and threatens care for those who truly depend on it. This is a perfect example that we have taken a firm stand to investigate, prosecute, and shut down hospice fraud wherever it exists."
An investigation revealed that individuals had purchased personal identifying information for non-California residents from the dark web and enrolled those identities in Medi-Cal through Covered California. Fourteen hospice companies were purchased by straw owners and the billers began billing for hospice services for the stolen identities, according to Bonta. No hospice services were ever rendered. Fraudulent billing amounted to $267 million in improper claims paid with state and federal funds, Bonta said.
The 21 suspects were charged in three separate criminal complaints filed in Los Angeles County.
The defendants are charged with conspiracy to commit health care fraud, health care fraud, money laundering, and identity theft. In addition, there is an aggravated white collar crime enhancement and an aggravated money laundering enhancement, officials said.
"For years, California has led the charge to protect public programs from fraud and abuse,'' Gov. Gavin Newsom said Thursday. "We hold accountable to the fullest extent of the law anyone who tries to rip off taxpayers and take advantage of public programs, particularly those as sensitive as hospice care."
