Federal authorities have detained eight individuals across Southern California, accusing them of orchestrating a massive $50 million fraud scheme targeting Medicare patients in hospice centers.
Federal officials on Thursday announced the arrests of eight people in the Los Angeles area, accusing them of participating in various health care fraud schemes that total $50 million. Five of these distinct cases involve hospice-care centers located in the cities of Glendale, Artesia, Tarzana, and Simi Valley. According to the US Attorney's Office, these facilities allegedly billed Medicare for patients who were not terminally ill and therefore did not qualify for hospice services. In addition to the California operations, one individual was arrested in Idaho and another in Los Angeles for allegedly defrauding a West Coast labor union's health care plans. A separate arrest in Los Angeles involved accusations of forging immigration medical documents.
The Trump administration has recently identified California, and specifically the Los Angeles area, as a primary focus of its national anti-fraud efforts, alleging that the Democratic-led state is failing to crack down on improper spending. First Assistant US Attorney Bill Essayli, a Trump appointee, characterized California as the "kingdom of fraud" during a news conference announcing the charges. This statement highlights a sharp political divide, as Gov. Gavin Newsom's office responded by stating the state has already aggressively cracked down on hospice fraud. The Governor's office noted that he signed a law in 2021 to stop providing new hospice licenses due to fraud concerns. Furthermore, the state claims it has revoked more than 280 hospice licenses in the last two years and currently has 300 providers under investigation.
Dr. Mehmet Oz, who runs the Centers for Medicare and Medicaid Services (CMS), weighed in during a news conference, stating that federal officials "took out" 221 hospices in the last 10 weeks. He further declared that his agency is going to "review every single hospice in California." Oz's agency also announced a proposal for a new, publicly available hospice scoring system using care metrics to better identify facilities that might be illegitimate. Earlier in January, Oz posted a video on social media in front of an Armenian bakery in Los Angeles, alleging that roughly $3.5 billion in hospice and home care fraud had occurred in the city and that "quite a bit of it" was run by "the Russian Armenian mafia." This specific claim led to a civil rights complaint by Newsom's office, which argued that Oz had targeted Armenians with "baseless and racially charged allegations."
The largest Medicare fraud case announced Thursday involved an Artesia-based hospice center. Prosecutors state that the owner of this facility submitted more than $9 million in fraudulent hospice claims to Medicare and was paid more than $8.5 million on those claims. Investigations revealed that the owner paid beneficiaries and marketers for referring purported hospice patients to her company. One couple reported they were each promised $300 per month to sign up for hospice care even though they did not need it. Additionally, prosecutors said the couple received unnecessary items such as nutritional shakes, nonprescription vitamins, and wheelchairs. Another person charged in a new hospice fraud case is currently serving federal prison time in Seattle after being convicted in a previous hospice fraud case in December 2024. Her husband was arrested as a co-defendant Thursday morning.
Authorities also announced charges against a Los Angeles nurse who used a hospice center in Tarzana to submit more than $3.8 million in claims. Of that amount, Medicare paid approximately $3.4 million. However, she has not yet been arrested. Court dates have not been set, and it was not immediately clear if any of those arrested had legal representation. The administration has highlighted fraud around the country across federal benefits programs such as Medicare and Medicaid. President Donald Trump signed an executive order in March to create an anti-fraud task force led by Vice President JD Vance, which met for the first time last week. 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.
"We are enforcing a zero-tolerance policy for criminals who defraud American taxpayers," Essayli said in a statement announcing the California charges. On social media, Gov. Newsom wrote, "Glad the federal government is finally stepping up to do their part," following the federal announcement. The administration's push includes a specific focus on hospice fraud as a major area of financial loss. While the federal government pushes for a national crackdown, the interaction between the Trump administration and California officials remains tense. The Los Angeles arrests mark a significant escalation in the federal government's approach to combating these alleged financial crimes. Oz noted that Medicare fraud is a central component of the current enforcement actions. As the legal proceedings begin, the scrutiny on California's healthcare infrastructure is expected to intensify under the new federal oversight mechanisms.
The convergence of federal anti-fraud task forces and state-level licensing revocations suggests a prolonged period of regulatory tightening for California's hospice industry. With Dr. Oz committing to a full review of every hospice facility, the sector anticipates a wave of new compliance audits and potential closures for non-compliant centers. The implementation of the proposed scoring system could fundamentally alter market dynamics, forcing providers to meet higher, transparent care standards. Given the political rhetoric exchanged between the administration and Governor Newsom, the federal government is likely to maintain a high-pressure stance on California, potentially leading to more frequent federal interventions in state-level health oversight. The long-term impact may be a significantly reduced rate of hospice fraud as the combined forces of state revocations and federal criminal enforcement reshape the operational landscape of Los Angeles healthcare.
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