California authorities revealed on Thursday a sophisticated scheme involving millions of dollars, where stolen identities from individuals outside the state were exploited to bill for hospice services under a government-funded insurance program. This scheme came to light as part of an ongoing nationwide crackdown on fraud, spearheaded by federal officials.
The state’s Attorney General, Rob Bonta, announced that charges have been filed against 21 people, with five arrests already made. This comes amid critiques from the Trump administration accusing California of insufficient efforts to combat fraudulent activities. Meanwhile, federal agencies have intensified their scrutiny of healthcare expenditures, resulting in the recent arrest of eight individuals in the Los Angeles area, all implicated in various healthcare fraud operations.
Bonta emphasized the non-partisan nature of this initiative, stating, “This isn’t a political game for us. This is about protecting taxpayer dollars, protecting the programs that sick and vulnerable Californians rely on, and protecting our state.” His remarks underline the seriousness with which California is approaching the issue, focusing on safeguarding vital public resources and services.
The investigation was triggered by the Department of Health Care Services, which alerted state prosecutors to potential fraudulent activities. According to Bonta’s office, investigators uncovered a plot where personal information of non-residents was purchased from the dark web. These identities were then illicitly enrolled in Medi-Cal, California’s Medicaid counterpart that offers free or affordable health insurance to low-income residents.
Further investigation revealed that the fraudsters acquired 14 hospice companies, using them to file fraudulent claims for hospice services under these stolen identities. The total amount billed through this scheme reached approximately $267 million, highlighting the vast scale and financial impact of the fraudulent activities uncovered.
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.
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