Responsible for $267 Million in Fraud, 21 Charged
“The charges, arrests, and the seizure of firearms and cash, are a result of State law enforcement officers from various departments working together. Combining resources and expertise has disrupted this major hospice fraud ring.”
CSLEA President Alan Barcelona
LOS ANGELES – On April 9, 2026, California Attorney General Rob Bonta and the California Department of Health Care Services (DHCS) announced charges filed against 21 suspects and the dismantling of a major hospice fraud scheme that defrauded California of $267 million. Operation Skip Trace resulted in the arrest of five people after ten different locations were searched in Southern California. In addition, two handguns and more than $757,000 in cash were seized.
“This is about protecting taxpayer dollars, protecting the programs that sick and vulnerable Californians rely on, and protecting our state,” said Attorney General Bonta. “Over the life of this fraud scheme, not a single legitimate hospice service was ever provided yet millions were billed in a brazen, calculated scheme that exploited the Medi-Cal system. This wasn’t a mistake or a loophole; it was deliberate fraud. This kind of abuse undermines trust, drains critical resources, and threatens care for those who truly depend on it. This is a perfect example that we have taken a firm stand to investigate, prosecute, and shut down hospice fraud wherever it exists.”
“Fraud is a direct attack on Medi-Cal members who rely on us for care, and we will not stand for it,” said California Department of Health Care Services Director Michelle Baass. “Our safeguards worked as designed: we identified irregularities early, stopped further improper payments, and suspended the fraudulent providers. Working closely with the California Department of Justice Division of Medi-Cal Fraud and Elder Abuse, California’s Medicaid Fraud Control Unit, we are ensuring those responsible are held fully accountable while strengthening oversight to protect Medi-Cal members and taxpayer dollars.”
The investigation was initiated after the California Department of Justice (DOJ) received a credible allegation of fraud from DHCS. Subsequent investigative efforts uncovered a scheme where individuals purchased personal identifying information for non-California residents from the dark web and enrolled those identities in Medi-Cal through Covered California. Fourteen hospice companies were purchased by straw owners and the billers began billing for hospice services for the stolen identities. No hospice services were ever rendered. The total fraudulent billing is approximately $267 million.
DOJ filed charges against 21 suspects, in three different criminal complaints. The defendants are charged with conspiracy to commit health care fraud, health care fraud, money laundering, and identity theft. In addition, there is an aggravated white collar crime enhancement and an aggravated money laundering enhancement. On Wednesday, April 8th, DOJ, with the assistance of California Department of Health Care Services and the California Franchise Tax Board, executed Operation Skip trace which included the execution of search and arrest warrants at locations throughout Southern California.
