Attorney General Rob Bonta announced the charges on April 9, alongside the California Department of Health Care Services. According to the California Department of Justice, the scheme involved purchasing stolen personal identifying information for non-California residents from the dark web, enrolling those fictitious identities in Medi-Cal through Covered California, and then acquiring 14 hospice companies through straw owners to submit fraudulent billing against those phantom enrollees. Investigators allege that no hospice services were ever rendered over the life of the scheme.
Bonta described the conduct in direct terms. "Over the life of this fraud scheme, not a single legitimate hospice service was ever provided yet millions were billed in a brazen, calculated scheme that exploited the Medi-Cal system," he said. "This wasn't a mistake or a loophole; it was deliberate fraud."
The charges were filed in three separate criminal complaints. All 21 defendants face conspiracy to commit health care fraud, health care fraud, money laundering, and identity theft, along with aggravated white-collar crime and aggravated money laundering enhancements. The enforcement action, dubbed Operation Skip Trace, was executed on April 8 with search and arrest warrants at locations across Southern California — the press release references both ten and twelve locations in different passages. Five individuals were arrested, two handguns were seized, and investigators recovered more than $757,000 in cash.
DHCS Director Michelle Baass credited her agency's internal controls with detecting the fraud. "Our safeguards worked as designed: we identified irregularities early, stopped further improper payments, and suspended the fraudulent providers," she said. The California Franchise Tax Board assisted in executing the warrants.
Governor Gavin Newsom's statement accompanying the announcement included a pointed reference to the state-level nature of the charges. "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," Newsom said, adding: "Since these are state charges, Donald Trump cannot pardon these individuals in exchange for campaign donations."
The DOJ's Division of Medi-Cal Fraud and Elder Abuse, California's Medicaid Fraud Control Unit, led the investigation. The division receives 75 percent of its funding through a federal grant from the U.S. Department of Health and Human Services, totaling $77,652,892 for federal fiscal year 2026, with the remaining 25 percent funded by the California Attorney General's Office. During Bonta's tenure, the office has conducted 294 hospice-related investigations, filed 119 hospice-related criminal cases, and secured 51 hospice-related convictions. All 21 defendants are presumed innocent until proven guilty.