California Attorney General Rob Bonta announced the takedown of an alleged $267 million hospice fraud scheme targeting Medi-Cal during a Los Angeles press conference April 9. Prosecutors charged 21 people and arrested five in what state officials called the largest hospice fraud case in California history.
Operation Skip Trace involved searches at 12 locations across Southern California. Authorities seized two guns and $757,000 in cash. The charges include conspiracy, healthcare fraud, money laundering and identity theft, with white-collar crime enhancements for all defendants.
All defendants are presumed innocent until proven guilty in court.
The Alleged Scheme
Prosecutors say the operation worked by purchasing personal data from residents of other states through dark web networks. Organizers allegedly used this information to register fake “patients” in the Medi-Cal program and acquired 14 hospice companies through shell owners.
The companies billed for end-of-life care for people who never lived in California, according to the attorney general’s office. None of the 14 companies provided any actual hospice services during their operation, prosecutors allege. FOX 11 reports the companies were linked to approximately 130 shell entities. Authorities have recovered about $30 million of the alleged $267 million scheme.
Federal Operation Runs Parallel
Federal authorities conducted their own operation the same day called Never Say Die, making eight arrests and charging 15 people. The federal case targets Medicare rather than Medi-Cal, with alleged fraud totaling $60 million.
The Department of Justice says healthy people were enrolled as terminally ill patients. Some received $300 monthly payments to agree to be listed as dying, while others were unaware bills were being submitted in their names. Medicare pays $5,000 to $6,000 monthly per hospice patient. The money allegedly funded homes, cars and overseas travel.
Federal prosecutor Bill Essayli warned potential fraudsters: “We will wake you up at six in the morning with an FBI visit.”
Political Battle
Hospice fraud in California has become a flashpoint between the state and the Trump administration in recent months.
Centers for Medicare and Medicaid Services Administrator Mehmet Oz accused California of inaction in January, claiming $3.5 billion in hospice fraud in Los Angeles and linking it to “Russian Armenian mafia.” Governor Gavin Newsom filed a discrimination complaint. Bonta responded that the Trump administration was weaponizing a real problem while Medicare remains a federal program under CMS oversight.
Newsom said the state-level charges mean Trump “won’t be able to pardon these individuals in exchange for donations.” The comment referenced Philip Esformes, a Florida nursing home owner convicted of $1.3 billion in fraud whose 20-year sentence Trump commuted in 2020. Esformes served less than five years.
Scale of the Problem
The California State Auditor warned of likely widespread fraud in 2022. Hospice agencies in Los Angeles County grew from 109 in 2010 to 1,841 in 2021 — a 1,600% increase. The county had 45 times more hospices per elderly resident than New York and 59 times more than Florida.
Commercial companies drove virtually all growth. The auditor found the combination of indicators suggested “large-scale, organized efforts” to defraud Medicare and Medi-Cal in Los Angeles County.
A single hospice with 20 patients can collect approximately $122,000 monthly, according to the audit. A CBS News investigation found one Los Angeles County doctor, Rajiv Bhuva, appeared on Medicare bills for nearly 2,800 patients across 126 different hospices in 2024.
Federal authorities have revoked billing privileges for three-fifths of California’s new hospice providers in the past year. More than 200 providers have been suspended since early 2025. The state imposed a moratorium on new licenses in 2021 and has revoked more than 280 existing ones. Another 300 remain under review.
Bay Area Impact
All known cases center on Southern California, with Los Angeles County as the epicenter. But Medi-Cal serves nearly 15 million Californians statewide with an annual budget of approximately $184 billion. Every dollar stolen from the program means one less dollar reaching legitimate patients, including in the Bay Area where tens of thousands of elderly residents receive hospice care through Medi-Cal and Medicare.
License revocations and provider suspensions affect more than just fraudsters. Families whose relatives genuinely need hospice care face uncertainty about whether their provider will continue operating.
Reporting Fraud
Fraudsters often recruit elderly people, immigrants and those with language barriers. Many don’t understand they’ve been enrolled in hospice or that someone is billing in their name.
Suspected hospice fraud can be reported online at oag.ca.gov/dmfea/reporting or by calling the Department of Justice Division of Medi-Cal Fraud & Elder Abuse at (800) 722-0432. Warning signs include hospice enrollment without a doctor’s referral, offers of gift cards or money for enrollment, or patients not receiving promised services.