California Authorities Indict 21 Individuals in $250 Million Hospice Fraud Scheme

California authorities have recently uncovered a complex multimillion-dollar scheme involving the misuse of stolen identities from individuals outside the state. The fraudulent activity was linked to billing for hospice services under a government insurance program.

State Attorney General Rob Bonta announced charges against 21 individuals, with five arrests made so far. This action comes amid criticism from the Trump administration, which accused California of insufficient efforts to curb fraud.

In response, federal officials have initiated a nationwide crackdown on improper spending, particularly within federal benefit programs. Just last week, eight people were apprehended in connection with various healthcare fraud cases in the Los Angeles area.

“This isn’t a political issue for us. It’s about safeguarding taxpayer money, maintaining essential programs for vulnerable Californians, and upholding the integrity of our state,” Bonta emphasized in a press statement.

The investigation began after the Department of Health Care Services alerted state prosecutors to potential fraudulent activities. Investigators uncovered a scheme where personal data of non-California residents was purchased from the dark web. This information was then used to enroll individuals in Medi-Cal, California’s version of Medicaid, which offers free or low-cost health insurance to low-income families and individuals.

Then, those individuals bought 14 hospice companies and began billing for hospice services for the stolen identities. They billed a total of about $267 million, Bonta’s office said.

The individuals are charged with conspiracy to commit health care fraud, health care fraud, money laundering, and identity theft with aggravated white collar crime and money laundering enhancements.

“For years, California has led the charge to protect public programs from fraud and abuse,” Gov. Gavin Newsom said in the news release. “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.

Under Bonta, the state has filed 119 hospice-related criminal cases and secured 51 convictions, his office said.

The Trump administration has made California a focus of its national anti-fraud efforts and zeroed in on Medicare hospice fraud in the Los Angeles area. President Donald Trump signed an executive order in March to create an anti-fraud task force led by Vice President JD Vance. Most of the efforts have focused on states run by Democrats, though Republican-led Florida was among those asked to share more information on how they identify, prevent and address Medicaid fraud.