California Charges 21 in $267M MediCal Hospice Fraud

California Attorney General Rob Bonta announced Thursday the charging of 21 individuals in a large-scale hospice fraud scheme that defrauded the state's MediCal program of more than $267 million. The operation, known as Operation Skip Trace, targeted a network of fraudulent providers in Southern California, where authorities searched 10 locations, arrested five suspects, and seized over $757,000 in cash along with two handguns.

Officials described the scheme as a deliberate effort to exploit MediCal, California's Medicaid program, by purchasing personal identifying information of healthy, out-of-state residents on the dark web. Fraudsters then enrolled these unaware individuals in the program through Covered California, posing them as eligible patients in need of end-of-life care. Straw owners acquired 14 hospice companies and submitted claims for services that were never provided, using fake records, nonexistent offices, and fabricated diagnoses to justify the billing. The illicit funds, totaling $267 million in improper claims paid with state and federal money, were laundered through a complex web of more than 130 shell companies, bank accounts, payment apps, and...