California arrests 5 in $267M hospice fraud scheme

California authorities arrested five people and charged 21 others in a sweeping fraud scheme that defrauded the state's Medicaid program, Medi-Cal, of $267 million. The operation, dubbed "Operation Skip Trace," targeted 10 locations in Southern California and seized over $757,000 in cash. According to California Attorney General Rob Bonta, the scheme involved purchasing stolen identities from the dark web, enrolling them in Medi-Cal, and billing for hospice services that were never provided. The defendants allegedly used straw owners to buy 14 hospice companies and submitted fraudulent claims using fake records and diagnoses. Bonta emphasized that the scheme was "brazen and calculated," exploiting the system to steal from taxpayers and deprive legitimate patients of care. The investigation began after a tip from the California Department of Health Care Services, which flagged fraudulent activity at the hospice agencies. The charges include conspiracy to commit health care fraud, health care fraud, money laundering, and identity theft. All the hospice companies involved were state-licensed and approved to bill Medi-Cal. The case highlights ongoing concerns about healthcare fraud in California, with federal officials previously raising alarms about the state's hospice agencies.