California Dismantles $267M Hospice Fraud Scheme

More than 20 people charged in massive Medi-Cal fraud operation

Apr. 9, 2026 at 9:35pm

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An extreme close-up photograph of crumpled medical billing documents and financial records, dramatically lit by a harsh camera flash against a dark background, conveying the gritty, investigative nature of uncovering this large-scale healthcare fraud.A harsh, forensic examination of the financial records behind a massive California hospice fraud scheme that defrauded the state of over $267 million.Los Angeles Today

California officials announced the takedown of a 'massive hospice fraud scheme' that defrauded the state of over $267 million in Medi-Cal funds meant for end-of-life care. More than 20 people have been charged, with 5 arrests made so far, for their alleged involvement in a sprawling network of shell companies that schemed, stole, and laundered the funds.

Why it matters

The case highlights the ongoing battle against widespread healthcare fraud, especially in the hospice industry, which has been a target of increased scrutiny and enforcement efforts by state and federal authorities. It also pushes back against claims by Trump administration officials that California has failed to address rampant fraud in the state.

The details

The investigation, dubbed 'Operation Skip Trace', uncovered a network of shell companies that were purchasing personal identifying information on the dark web and enrolling out-of-state residents who were completely healthy and unaware into California's hospice care system. The companies would then allegedly bill the state for services that were never provided and launder the money through a 'complex web' of shell companies.

  • Last spring, California officials received a tip concerning alleged hospice fraud at 14 companies.
  • On Thursday, April 9, 2026, California officials announced the takedown of the $267 million fraud scheme.

The players

Rob Bonta

The California Attorney General who announced the takedown of the fraud scheme.

Bill Essayli

A Trump-appointed First Assistant U.S. Attorney who previously called California the 'kingdom of fraud' regarding healthcare fraud.

Mehmet Oz

The Health and Human Services administrator for the Centers for Medicare & Medicaid Services who has touted the Trump administration's efforts to root out fraud, particularly in the hospice industry in Southern California.

Gavin Newsom

The Governor of California whose office has sparred with federal officials over claims of rampant healthcare fraud in the state.

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What they’re saying

“Let this be a lesson to anyone targeting Medi-Cal and hospice care in California – we are on the case, and we're coming for you.”

— Rob Bonta, California Attorney General

“While health care fraud might be President Trump's shiny new political talking point, California DOJ has been going after health care fraud since 1979. Trump is late to the party.”

— Rob Bonta, California Attorney General

“This was a brazen, calculated criminal scheme that exploited the Medi-Cal system, stole from the state of California and Medicaid, and prevented the services and care from going to sick individuals who actually need it.”

— Rob Bonta, California Attorney General

What’s next

If found guilty, those charged could face up to 16 years in prison.

The takeaway

This case highlights the ongoing battle against widespread healthcare fraud, especially in the hospice industry, and demonstrates California's commitment to rooting out such schemes despite claims from the Trump administration that the state has failed to address the problem.