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LOS ANGELES — California officials on Thursday said they uncovered a multimillion-dollar scheme to use stolen identities from people outside the state to charge for hospice services paid for with a government insurance program.
State Attorney General Rob Bonta said officials have charged 21 and have so far arrested 5 people involved as the Trump administration accused California of not doing enough to crack down on fraud.
Federal officials have launched a nationwide effort to target improper spending in federal benefit programs, arresting eight people last week they said were involved in various health care fraud schemes in and around Los Angeles.
“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,” Bonta said in a news release.
After the Department of Health Care Services notified state prosecutors of potential fraud, investigators discovered a scheme in which individuals bought personal information for non-California residents from the dark web and enrolled them in Medi-Cal, the state’s equivalent of Medicaid, Bonta’s office said. The program provides free or low-cost health insurance to low-income individuals and families.
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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