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A federal impeachment inquiry in Los Angeles has exposed what prosecutors say is an unscrupulous, multimillion-dollar scheme that turned end-of-life care into a cash grab, allegedly using immortals to defraud taxpayers of more than $50 million.
Eight defendants, including nurses, a chiropractor and an alleged psychiatrist, were arrested in an operation targeting private hospice and medical fraud schemes, according to the Department of Justice.
At the center of the lawsuit, hospice companies are accused of enrolling healthy patients, paying bills and pocketing millions in Medicare for treatment that was never needed or was never provided.
“We have a policy of zero tolerance for criminals who defraud the American taxpayer,” First Assistant U.S. Attorney Bill Essayli said Thursday. “The defendants arrested this morning who are accused of stealing millions of dollars in health care grants have been caught and are now facing years in prison.”
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Mugshots of multiple suspects accused of a $50 million health care fraud scheme tied to hospice jobs in Los Angeles (FBI)
Some of the high-profile allegations involved Anaheim nurse Lolita Minerd, who prosecutors say ran a hospice business that recruited patients on the market, promising free services and $300 a month to sign up.
The couple who signed up were not terminally ill, which their doctor confirmed, but they were allegedly paid $600 a month in cash envelopes while Medicare billed for end-of-life care.
Minerd's company alone submitted more than $9.1 million in claims, collecting about $8.5 million from taxpayers, authorities said.
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Federal agents are preparing for a coordinated operation targeting a multi-million dollar health care fraud network (FBI)
Investigators say the pattern repeated in most cases, patients who were not dying were registered in the hospice, vendors were paid illegal fees and providers paid while providing little or no care.
“The defendants indicted today are alleged to have turned hospice care into a revenue generating business, resulting in a loss of more than $50 million to taxpayers,” said HHS Inspector General T. March Bell. “Anyone who wants to equip hospice care to provide Medicare should expect to be held accountable.”
In one case, a Covina couple, a self-described nurse and psychiatrist, allegedly siphoned off more than $4 million in Medicare and used it for bills, international travel, restaurants and personal bills.
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Federal agents are preparing for a coordinated operation targeting a multi-million dollar health care fraud network (FBI)
Federal prosecutors say one of the perpetrators went too far, allegedly running multiple fake hospice companies while he was already facing charges in another case and was legally barred from running such businesses.
In addition to hospice fraud, authorities say the settlement uncovered a $19 million scheme targeting a union health plan, in which the defendants allegedly billed for false or unnecessary chiropractic care services and patient records.
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“Today's arrest is another decisive strike in our fight against fraud,” said Department of Labor Inspector General Anthony D'Esposito. “If you steal from workers or taxpayers, your time is up. We will find you, investigate and prosecute you.”
Officials say Southern California has become a hotbed of hospice-related scams and other fraudulent health care schemes.
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“The Southern California region is a high-risk area for hospice-related fraud and many other types of health care fraud,” said Akil Davis, assistant director in charge of the FBI's Los Angeles Field Office. He noted that the US loses hundreds of billions of dollars a year due to health care fraud, driving premiums, co-pays and taxes on Americans.
Authorities say the crackdown, called Operation Never Say Die, is part of a campaign to dismantle fraud networks that prey on taxpayers and vulnerable patients.
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“Healthcare fraud undermines government programs, threatens public trust and diverts resources from legitimate patient care,” said IRS Criminal Investigation Special Agent in Charge Tyler Hatcher. “Those who profit at the expense of taxpayers and patients will be held accountable.”
Officials also warned that the damage goes far beyond dollars.
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“When employee benefit programs fall victim to fraud, it's not just the programs that hurt, everyday working Americans, their families and their communities are hurt,” said Robert Prunty of the Department of Labor.
If convicted, most defendants face up to 10 years in federal prison, with some cases carrying even longer sentences.
