California Attorney General Rob Bonta said Thursday that state investigators uncovered a hospice fraud scheme that prosecutors allege relied on stolen identities and billings tied to public health insurance, charging 21 people and arresting 5 so far. Bonta said investigators traced the conduct to information obtained from the dark web, which officials said was used to enroll people outside California in Medi-Cal before hospice companies were purchased and billed.
According to Bonta’s office, the scheme started after the California Department of Health Care Services notified state prosecutors of potential fraud. Investigators then found what Bonta described in a news release as a plan in which individuals bought personal information for non-California residents from the dark web and used those identities to participate in Medi-Cal.
Bonta said the program provides free or low-cost health insurance to low-income individuals and families, and prosecutors allege the stolen identities were used within that system. The office said the individuals then bought 14 hospice companies and began billing for hospice services using the identities.
Bonta said the defendants billed a total of about $267 million. He said the charged conduct included conspiracy to commit health care fraud, health care fraud, money laundering, and identity theft, along with aggravated white collar crime and money laundering enhancements.
“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.
Gov. Gavin Newsom also addressed the allegations in the release, saying, “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.”
Bonta said his office has filed 119 hospice-related criminal cases and secured 51 convictions under his leadership. The announcement landed against a backdrop of expanded national anti-fraud enforcement, with federal officials saying they launched a nationwide effort to target improper spending in federal benefit programs.
The AP report said federal officials have been arresting people involved in various health care fraud schemes in and around Los Angeles, and that President Donald Trump signed an executive order in March to create an anti-fraud task force led by Vice President JD Vance. The report said many of the efforts have focused on states run by Democrats, while Republican-led Florida was among those asked to share information on how they identify, prevent and address Medicaid fraud.