Authorities in California have apprehended five individuals in connection with a suspected multi-million dollar hospice fraud scheme, officials reported on Thursday.

According to California Attorney General Rob Bonta, the fraudulent operation swindled over $267 million from Medi-Cal, the state’s Medicaid program. In total, charges have been filed against 21 individuals involved in the scheme.

The arrests stem from a statewide investigation, named “Operation Skip Trace,” which focused on several locations across Southern California.

During a press conference, Attorney General Rob Bonta revealed the charges against those implicated in this extensive hospice fraud network.

“This wasn’t a mere oversight or an instance of mismanagement,” Bonta emphasized. “This was a deliberate, sophisticated criminal enterprise aimed at exploiting the Medi-Cal system. It siphoned funds from California and Medicaid, hindering access to essential services for genuinely needy patients.”

The investigation kicked off following a report from the state Department of Health Care Services, which highlighted potential hospice fraud at 14 different companies. Bonta’s team subsequently scrutinized these firms, along with eight individuals suspected of engaging in money laundering activities.

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State Assemblymember Alexandra Macedo enters the Merabi Professional Medical Plaza Building in Van Nuys on March 13, 2026. Macedo said she found 197 hospices registered to this address and, with other Republican lawmakers, called on Gov. Gavin Newsom to address abuses in the industry. (Sarah Reingewirtz/MediaNews Group/Los Angeles Daily News)

Investigators found that those involved purchased personal identifying information for people living outside of California on the dark web, then enrolled them in Covered California by posing as California residents.

“Straw owners” then bought a number of hospice companies and began billing Medi-Cal for services never provided to those stolen identities. The suspects used fake records, nonexistent offices, and fraudulent diagnoses to justify these claims, Bonta said.

“Meanwhile, the so-called patients were healthy, out-of-state, and completely unaware that they had been enrolled in hospice care,” he said.

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California Health and Human Services Secretary Kim Johnson said the DHCS halted payments and suspended all fraudulent hospice providers. “There is a moratorium currently in place through January 2027 for new licensed providers,” Johnson noted.

“Once the money was paid out, it was funneled through a complex web of over 130 shell companies and hidden across bank accounts, payment apps, and cryptocurrency to evade detection,” Bonta added. “The money was laundered.”

No actual medical services were provided, Bonta noted. He said all 21 suspects are accounted for through arrest, active warrants, or notices to appear before a judge. While announcing the suspected fraud, Bonta also criticized the Trump administration amid its claims of rampant fraud in California.

“There are those in this federal administration who can only see things through a political lens and want to politically weaponize [this],” he said. “And they love to go after the fourth-largest economy in the world, the greatest state in the nation, the great state of California.”

California has been at the center of fraud concerns in recent weeks and has been called out by the federal anti-fraud task force led by JD Vance. Last week, eight people were arrested as part of a federal sweep tied to an alleged $60 million fraudulent Medicare billing scheme, Fox 11 Los Angeles reported.

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