California Authorities Bust $267 Million Hospice Fraud Scheme

Arrests made in massive Medi-Cal fraud case involving fake patient enrollments and stolen identities

Apr. 9, 2026 at 11:35pm

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An extreme close-up photograph of a stack of cash and a handgun against a pitch-black background, conveying the serious, investigative nature of this hospice fraud case without depicting any actual violence or victims.The seizure of $757,000 in cash and two handguns from raids on alleged hospice fraud operations underscores the brazen criminality behind this $267 million Medi-Cal scam.Los Angeles Today

The California Department of Justice has arrested five people and charged 21 total for their alleged roles in a hospice fraud scheme that pilfered $267 million through Medi-Cal, state Attorney General Rob Bonta announced. Investigators seized two handguns and $757,000 in cash from raids at 12 locations throughout Southern California. The DOJ's Division of Medi-Cal Fraud and Elder Abuse has recovered about $30 million from the fraudulent billings so far.

Why it matters

This case highlights the ongoing problem of healthcare fraud, particularly in the hospice industry, which has seen a proliferation of providers in certain California communities that vastly outpace the actual need. The state has taken steps to address the issue, including imposing a moratorium on new hospice licenses, but the federal approval process has allowed many questionable providers to still bill taxpayer-funded programs.

The details

Investigators say the scheme involved 14 hospice companies that were purchased through straw owners and used the stolen identities of non-California residents, purchased from the dark web, to enroll those individuals in Medi-Cal through Covered California without their knowledge. No hospice services were ever rendered, but the billings were laundered through 130 shell companies and cryptocurrencies.

  • In May 2025, the Department of Health Care Services initially flagged the potential fraud to state law enforcement.
  • On April 7, 2026, more than 80 investigators and surveyors swarmed an office building in Van Nuys that was found to house over 100 unlicensed hospice providers.

The players

Rob Bonta

The California Attorney General who announced the arrests and charges in the $267 million hospice fraud scheme.

Kim Johnson

The secretary of California Health and Human Services, who said the companies in question were removed from the Medicaid program and payments were halted as soon as the fraud was discovered.

Erica Pan

The director of the California Department of Public Health, who stated the department is actively investigating hospice providers in Los Angeles County to protect patients and safeguard the integrity of the healthcare system.

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What they’re saying

“This wasn't a case of billing errors, cutting corners, or upcharging care. This was a brazen, calculated criminal scheme that exploited the Medi-Cal system, stole from the state of California and Medicaid, and prevented services and care from going to sick individuals who actually need it.”

— Rob Bonta, California Attorney General

“Any misuse of stolen identities, or improper billing, is unacceptable and undermines the trust Californians place in this program.”

— Kim Johnson, Secretary of California Health and Human Services

What’s next

The California Department of Public Health stated it had revoked eight licenses at the Friar Street address, with another 12 providers in the process of being revoked. Separately, the Centers for Medicare and Medicaid Services had terminated the certifications of 21 providers at that location.

The takeaway

This case highlights the ongoing problem of healthcare fraud, particularly in the hospice industry, and the need for stronger oversight and accountability measures to prevent bad actors from exploiting taxpayer-funded programs and depriving legitimate patients of critical care.