California authorities have dismantled a massive $267 million hospice fraud scheme in Los Angeles, leading to charges against 21 individuals. The crackdown follows independent investigations by journalist Nick Shirley, who has also highlighted potential fraud in other state-funded programs.
State officials announced the arrests and charges, revealing a sophisticated operation that allegedly used stolen identities to enroll individuals in Medi-Cal for hospice services that were never provided. Attorney General Rob Bonta confirmed that five principal conspirators face charges including insurance fraud, money laundering, and identity theft. The scheme involved 14 fraudulent hospice providers, with no legitimate services ever rendered, according to state authorities.
The state's actions come after independent journalist Nick Shirley released a 40-minute video on X in March, exposing alleged widespread fraud within California's hospice and daycare systems. Shirley's investigation claimed to uncover over $170 million in suspect billings, with "ghost" centers operating from empty lots and luxury vehicles parked outside dilapidated facilities. His work garnered millions of views and sparked public outcry.
The tweet from Mark Fabela, addressed to Nick Shirley, stated, "> "@nickshirleyy Once you’re finished with the hospices, Californians have something else you should look into. https://t.co/xiMzVyXoP8" This suggests a public expectation for Shirley to expand his investigations beyond hospice care. Shirley previously gained prominence for exposing alleged daycare fraud in Minnesota, a pattern he claims is mirrored, and even larger, in California.
California Governor Gavin Newsom's office has emphasized the state's long-standing efforts to combat fraud, citing a statewide task force, a moratorium on new hospice licenses, and the revocation of over 280 licenses in the past two years. However, critics, including federal officials and independent journalists like Shirley, have pointed to a significant surge in hospice enrollments in Los Angeles County, raising questions about oversight. The ongoing investigations underscore a broader concern regarding the integrity of publicly funded programs in California.
