Federal Agencies Crack Down on Hospice Fraud California Operations
Hospice fraud California schemes just triggered a sweeping federal crackdown, and the numbers are staggering. Federal agencies recently announced arrests tied to a $50 million health care fraud takedown, exposing how certain hospice owners allegedly billed Medicare for unnecessary or undelivered care.
One case reportedly involved 626 hospice claims under scrutiny, while a separate $267 million Medi-Cal investigation highlights deeper oversight gaps statewide. For patients, families, and providers alike, understanding these developments is crucial.
Furthermore a $2 billion dollar L.A. Health Care fraud scheme was uncovered in Los Angeles just recently. This article breaks down the allegations, the investigations, and what comes next for California's hospice industry.
Federal Agencies Announce Arrests in California Health Care Fraud Cases
Federal prosecutors moved quickly against a network of Southern California health care providers accused of siphoning taxpayer money through fraudulent billing schemes. The action, carried out under the name "Operation Never Say Die," targeted individuals who allegedly used hospice care and other medical services as fronts for financial exploitation.
Who Did Federal Authorities Arrest, and Where Did They File Charges?
Eight defendants faced arrest as part of this coordinated action, working alongside the Vice President's Task Force to Eliminate Fraud. The group included three nurses, a chiropractor, and a person who presented himself as a psychologist. Six of the eight were scheduled to appear in United States District Court in downtown Los Angeles the same afternoon, while one defendant was set to appear in federal court in Idaho.
The defendants and their alleged roles included:
- Lolita Beronilla Minerd, a licensed vocational nurse who owned Topanga Hospice Care Inc.
- Gladwin Gill, a purported psychologist, and his wife Amelou Gill, a registered nurse, who ran 626 Hospice Inc.
- Nita Almuete Paddit Palma, already incarcerated on prior fraud convictions, and her husband Adolfo Cezar Catbagan, accused of operating hospice facilities together.
- Evelyn Tindimubona, a licensed vocational nurse connected to Comfort Choice Hospice Inc.
- Ivan Verne Lauritzen, tied to Valley Pacific Hospice Inc.
First Assistant United States Attorney Bill Essayli framed the arrests as part of a wider enforcement stance, stating that defendants "got caught and now face years in federal prison" for stealing health care benefits. Akil Davis, Assistant Director in Charge of the FBI's Los Angeles Field Office, described the Southern California region as a high-risk environment for hospice-related and other health care fraud, noting that the United States loses hundreds of billions of dollars annually to such schemes.
How Do Hospice Cases Fit Into the Broader $50 Million Alleged Fraud Takedown?
Hospice fraud California cases formed the core of the alleged $50 million scheme, though the takedown extended into private health plan fraud and immigration document fraud as well. Inspector General T. March Bell of HHS-OIG said the defendants allegedly "turned hospice care into a cash producing operation," calling the losses evidence of deliberate abuse of trust placed in health care providers. He added that the agency intends to deploy every available tool to dismantle hospice operations built on deception.
Labor officials also weighed in on the scope of harm. Department of Labor Inspector General Anthony P. D'Esposito described the arrests as part of an ongoing effort against those who exploit employee health care programs for personal gain, working alongside the FBI and the Department of Labor's Employee Benefits Security Administration. IRS Criminal Investigation Special Agent in Charge Tyler Hatcher said health care fraud diverts resources from legitimate patient care and undermines public trust in federal programs.
Beyond the hospice-related charges, the same takedown produced indictments involving a labor union health plan, chiropractic billing fraud, and a scheme exploiting the immigration green card process, bringing the combined scope of alleged losses across all categories to more than $50 million.
Prosecutors Detail Alleged Medicare Hospice Fraud Schemes
Court documents filed in the Central District of California lay out in granular detail how prosecutors believe each hospice operation turned patient referrals into a revenue stream, with specific dollar figures attached to every scheme.
Prosecutors Accuse Topanga Hospice Owner of Paying Recruitment Kickbacks
Minerd Lolita Beronilla Minerd, who operated Artesia-based Topanga Hospice Care Inc., allegedly submitted more than $9,174,117 in fraudulent hospice claims to Medicare between July 2020 and April 2025, with the program paying out more than $8,510,448 on those claims. Investigators found that numerous beneficiaries shared common addresses and lived far from the facility, a pattern consistent with organized recruitment rather than genuine local enrollment. According to the complaint, Minerd paid kickbacks to both beneficiaries and marketers for referrals of purported hospice patients. One beneficiary couple told investigators they were approached at a market, then visited at home by Minerd and three Topanga employees who promised free services plus $300 per month each, delivered in cash envelopes totaling $600 monthly over six months. Neither beneficiary had a terminal illness, a fact their own physician later confirmed. Topanga also reportedly supplied unneeded items such as nutritional shakes and wheelchairs. Perhaps most telling, the facility's non-death discharge rate reached approximately 85%, nearly five times the national average of 17.2% recorded in 2021, a gap investigators viewed as a strong indicator of ineligible enrollment.
Authorities Allege 626 Hospice Owners Billed for Unnecessary or Undelivered Care
Gladwin Gill and his wife, Amelou Gill, who owned the Glendale-based 626 Hospice Inc., doing business as St. Francis Palliative Care, face allegations of paying illegal kickbacks for referrals of patients who were not dying. Prosecutors say the couple submitted more than $5.20 million in fraudulent claims for hospice services that were either medically unnecessary or never provided at all, with Medicare paying out more than $4.00 million on those claims. The indictment further alleges the Gills laundered proceeds from the scheme and used the money for mortgage payments, car payments, international flights, and restaurant spending.
Indictment Alleges Palma Controlled Three Hospices Despite Her Exclusion
Nita Almuete Paddit Palma, already a thrice-convicted health care fraudster incarcerated in Seattle, faces an 11-count indictment alongside her husband, Adolfo Cezar Catbagan, for allegedly operating three Glendale hospices between June 2022 and April 2024:
- One Up Hospice Care Inc.
- Rosewood Hospice and Palliative Care Inc.
- Advance Hospice and Palliative Care Inc.
Catbagan served as nominal owner and CEO on paper, while prosecutors allege Palma actually controlled the companies despite being barred from Medicare participation. Investigators say physicians listed on hospice paperwork never actually treated the patients, and claims were submitted for beneficiaries who were not terminally ill. Combined, the three companies submitted at least $4.80 million in fraudulent claims, resulting in Medicare payments of at least $4.20 million. Notably, these allegations echo an earlier case in which Palma was convicted for a $10.60 million scheme run through separate hospices.
How Do Alleged Enrollment Abuses Affect Medicare Patients?
Behind every fraudulent claim sits a patient whose medical record determines whether Medicare will pay for the care they actually need. Hospice fraud California cases like those described above show what happens when that record gets falsified for profit, and the consequences for beneficiaries extend well beyond the dollar figures named in court filings.
What Medical Certification Does Medicare Require for Hospice Eligibility?
Medicare only covers hospice care when strict certification standards are met. A hospice doctor and the beneficiary's regular doctor, if one exists, must certify that the patient is terminally ill with a life expectancy of six months or less. The patient must also accept comfort care instead of curative treatment and sign a formal election statement before receiving any hospice services. Written certification must follow no later than two calendar days after each benefit period begins, and initial certifications can be completed up to 15 days in advance. Every certification requires a brief narrative written personally by the certifying physician, explaining the clinical findings that support the six-month prognosis, and that narrative cannot rely on checkboxes or standard language. After the initial 90-day benefit period, patients move into a second 90-day period, followed by an unlimited number of 60-day periods, with recertification required each time a hospice medical director confirms continued terminal status.
How Can Improper Hospice Enrollment Affect Patients' Treatment Coverage?
When these certification rules are ignored or falsified, patients face direct financial and medical harm. Once hospice benefits begin, Medicare stops covering treatment aimed at curing the terminal illness, along with prescription drugs meant to treat rather than manage symptoms. For beneficiaries wrongly placed on hospice, this creates a serious problem: they may be denied coverage for medical care they still need, even though they were never actually dying. One patient testified at trial that Medicare refused to cover a procedure because he had been listed as a hospice patient without his knowledge. Many families in similar cases believed they were receiving free home health services, not realizing hospice enrollment had occurred at all.
Investigators have additionally flagged broader coverage gaps tied to enrollment abuse. A federal audit found that Medicare improperly paid acute-care hospitals an estimated $190.1 million over five years for outpatient services that should have been covered under hospice per diem payments instead. That same audit estimated enrollees could have saved $43.6 million in deductibles and coinsurance that were incorrectly collected from them. Analysts have also pointed to long enrollment periods and high live discharge rates as warning signs of improper certification, noting that such patterns often indicate beneficiaries were enrolled without fully understanding or agreeing to the change in their coverage. In effect, a single falsified certification can ripple outward, cutting off a patient's access to necessary treatment while leaving taxpayers to absorb the cost of care that was never medically justified.
Lawmakers Question Oversight of California Hospice Providers
While federal prosecutors pursued arrests in Los Angeles, California's own oversight record drew renewed scrutiny from lawmakers in Washington, who argue state regulators failed to act on warnings that surfaced years earlier.
California Auditors Flag Provider Clustering and Disproportionate Growth
A March 2022 report from the California State Auditor found that Los Angeles County experienced a 1,500 percent increase in registered hospice providers since 2010, pushing the statewide total past 2,800 agencies, a figure six times the national average relative to the county's senior population. That total exceeds the combined number of hospice providers in 36 states and is 33 times greater than the entire state of Florida. Auditors identified clusters of 500 providers within a single 3-mile radius, with county hospices billing Medicare an average of $29,000 per patient against a national average of $13,200, and some providers billing as much as $74,000 per patient. Overbilling in the county reached at least $105 million in a single year. Investigators also flagged 18 providers sharing one doctor's Medicare number, collectively billing $600 million between 2021 and 2024, including $210 million in 2024 alone.
House Committees Seek Records and Answers From State and Federal Officials
House Oversight Committee Chairman James Comer launched a formal investigation, sending Governor Gavin Newsom a letter requesting records covering January 2019 to the present, with a response deadline of April 6, 2026. The request targeted the Departments of Public Health, Social Services, Health Care Services, and the DOJ's Division of Medi-Cal Fraud and Elder Abuse. CMS Director Mehmet Oz estimated Los Angeles County alone accounts for $3.5 billion in hospice fraud and 18 percent of national hospice billing, while Attorney General Rob Bonta previously called the situation "an epidemic".
California Officials Cite License Revocations and a Moratorium on New Providers
Newsom's office pointed to a 2021 moratorium on new hospice licenses, now extended through January 2027 after the state missed its deadline for emergency regulations. Officials cited more than 280 license revocations over two years, 300 providers under active investigation, and 284 arrests tied to enforcement efforts.
How Does California's Separate $267 Million Medi-Cal Case Differ From Federal Cases?
Unlike the federal Medicare indictments, California's state case targeted transnational networks using stolen identities to bill Medi-Cal through 14 fraudulent hospice providers, resulting in $267 million in improper claims before DHCS disenrolled affected beneficiaries and revoked every implicated license.
What Happens Next in the Federal Hospice Fraud Cases?
The legal process for each defendant now moves through separate tracks, with court dates, bond conditions, and charging documents varying from case to case depending on when and how prosecutors filed against them.
Which Court Appearances, Defense Responses, and Charging Updates Remain Pending?
Oren Shachar and Abraham Shin, both arrested June 18, appeared in court the same day and face a 16-count indictment alleging a $27 million scheme. A federal magistrate judge released both men on bond, and their trial is scheduled for August 11. Jeannie Choi, arrested days later, was expected to make her initial appearance in Los Angeles federal court shortly after. Lynn Galbraith, charged separately by information rather than indictment, faces a single health care fraud count tied to $2,266,694 in submitted claims and $2,140,606 in Medicare payouts. Her initial appearance in Santa Ana was pending in the following weeks, and a conviction would carry a statutory maximum of 10 years in federal prison.
Ivan Verne Lauritzen, arrested earlier in the same enforcement window, was released on a $10,000 bond following his initial appearance, with arraignment set for April 27. Minerd, the Gills, and Catbagan were all expected before a Los Angeles judge the same afternoon as their arrests. Palma, already incarcerated in Seattle, faces her charges while serving time from an unrelated conviction.
Penalties across these cases follow federal sentencing guidelines rather than case-specific terms. Health care fraud charges carry a maximum of 10 years, wire fraud up to 20 years, and aggravated identity theft adds a mandatory two-year consecutive sentence on top of any other term imposed. Every complaint and indictment named here remains an allegation, and each defendant retains the presumption of innocence unless proven guilty in court. Separately, federal officials disclosed on October 22, 2026, that a related takedown produced charges against 15 defendants, including six medical professionals, tied to losses nearing $2 billion.
Conclusion
Overall, hospice fraud California cases reveal a system exploited at nearly every level, from falsified certifications to entire networks built solely for profit. Federal arrests, mounting Medicare losses, and the $267 million Medi-Cal scheme together show how deeply deception took root across the state's hospice industry. Lawmakers now demand accountability, and officials point to license revocations and a continued moratorium as proof that reform is underway. Be that as it may, real change depends on sustained enforcement rather than isolated takedowns. For patients and families, vigilance remains essential since eligibility for care should never hinge on a falsified diagnosis. In the long run, restoring trust will require transparency at every stage.
References
[1] – https://www.justice.gov/usao-cdca/pr/8-arrested-health-care-fraud-takedown-including-owners-hospices-billed-taxpayers
[2] – https://www.justice.gov/usao-cdca/pr/glendale-woman-sentenced-9-years-federal-prison-106-million-hospice-fraud-scheme
[3] – https://www.medicare.gov/coverage/hospice-care
[4] – https://www.cgsmedicare.com/hhh/coverage/coverage_guidelines/cert_recert_requirements.html
[5] – https://www.congress.gov/crs-product/R49060
[6] – https://public-inspection.federalregister.gov/2026-09718.pdf
[7] – https://oig.hhs.gov/reports/all/2024/medicare-improperly-paid-acute-care-hospitals-an-estimated-190-million-over-5-years-for-outpatient-services-provided-to-hospice-enrollees/
[8] – https://oversight.house.gov/wp-content/uploads/2026/03/Ltr-to-Newsom-re-hospice-fraud.pdf
[9] – https://oversight.house.gov/release/oversight-committee-launches-investigation-into-rampant-taxpayer-fraud-in-california-hospice-programs/
[10] – https://www.cbsnews.com/news/congress-investigation-california-hospice-fraud-taxpayer-losses/
[11] – https://www.gov.ca.gov/2026/04/09/california-stops-major-hospice-fraud-scheme-in-la-brings-criminal-charges-to-hold-fraudsters-accountable/
[12] – https://www.justice.gov/usao-cdca/pr/health-care-fraud-takedown-results-10-socal-defendants-federally-charged-defrauding
[13] – https://oig.hhs.gov/fraud/enforcement/?text=hospice
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