California Attorney General Rob Bonta (D) announced Thursday that authorities charged nearly two dozen people suspected of carrying out a major hospice fraud scheme that defrauded the state of millions.
Twenty-one people were charged for allegedly carrying out a sweeping scheme that targeted California’s Medicaid program, which is called Medi-Cal. Five were arrested, and over $757,000 in cash was seized, as part of “Operation Skip Trace,” in which authorities searched 10 locations in southern California to unravel the plot, according to Bonta’s office. The development comes after the Trump administration raised concerns about sweeping healthcare fraud it says is rooted in the state, with the Centers for Medicare & Medicaid Services revealing last month that the government has flagged the majority of California’s newly enrolled hospice agencies.
“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. 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,” he added.
Gov. Gavin Newsom’s (D-CA) office said fraudsters stole hundreds of millions by using stolen identities to fraudulently enroll individuals in Medi-Cal and bill for hospice services that were never provided. The scheme involved 14 fraudulent hospice providers and resulted in more than $267 million in improper claims paid with state and federal funds, according to officials.
In March, Kimberly Brandt, the chief operating officer of CMS, testified before Congress that federal investigators have stripped billing privileges from three-fifths of California’s newly enrolled hospice agencies. Of the remaining California-based hospice service providers that emerged over the past six months, 35% were flagged for corrective action, she said.
Weeks after Brandt’s testimony, the FBI arrested eight people in California in connection with alleged suspicious activity in the public healthcare industry, with investigators saying they uncovered over $50 million in healthcare fraud.
CMS administrator Mehmet Oz has helped lead Washington’s concerns about California fraud, but the Newsom administration has accused federal officials of duplicity in investigating the issue, pointing to President Donald Trump’s move to pardon “the man behind the biggest health care fraud in U.S. history.” Trump pardoned Philip Esformes in 2020, when the fraudster was serving a 20-year sentence for bilking $1 billion from Medicare and Medicaid.
“While in prison, Mr. Esformes, who is 52, has been devoted to prayer and repentance and is in declining health,” the White House pardon statement said at the time.
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Newsom’s office, in reaction to the latest charges brought against 21 individuals this week, mocked Trump’s move to pardon Esformes.
“I thank the Department of Health Care Services and the California DOJ’s Department of Medi-Cal Fraud and Elder Abuse for their swift work to bring these charges forward,” Newsom said. “Since these are state charges, Donald Trump cannot pardon these individuals in exchange for campaign donations.”