Federal authorities arrested eight people across the Los Angeles area on Thursday in connection with a series of alleged health care fraud schemes that totalled more than $50 million in intended losses. The operation, dubbed "Operation Never Say Die" by the FBI, targeted individuals accused of exploiting taxpayer-funded programs, primarily by creating fake hospice-care centres that billed Medicare for patients who were not terminally ill.
The U.S. Attorney’s Office for the Central District of California announced that the arrests included three nurses, a chiropractor, and a psychologist. The defendants are charged with running elaborate schemes designed to illegally obtain millions from federal health programs. Six of the accused were scheduled for their initial court appearances in Los Angeles on Thursday, with another appearing in Idaho.
According to the Justice Department, five of the cases involved hospice facilities located in Glendale, Artesia, Tarzana, and Simi Valley. These businesses allegedly recruited and enrolled patients who did not qualify for hospice care, which is reserved for individuals with a life expectancy of six months or less. The facilities then submitted fraudulent claims to Medicare for services that were either medically unnecessary or never provided. In addition to the hospice fraud, two other schemes were uncovered, one involving the defrauding of a West Coast labour union’s health care plan and another related to the forgery of immigration medical documents.
A coordinated crackdown
The arrests were part of a coordinated effort involving the Vice President’s Task Force to Eliminate Fraud, the FBI, the Department of Health and Human Services Office of Inspector General (HHS-OIG), and the Department of Labor. Officials emphasized a hard-line stance on health care fraud, which they say undermines the integrity of the nation's health system.
The defendants charged today allegedly turned hospice care into a cash producing operation, resulting in more than $50 million in losses to taxpayers. The magnitude of the losses underscores a deliberate abuse of the authority and trust afforded to health care providers,” said Inspector General T. March Bell of the HHS-OIG.
Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office, described Southern California as a "high-risk environment" for such crimes. "The United States loses hundreds of billions of dollars annually to healthcare fraud at the expense of all American taxpayers, whose benefits decrease as premiums, co-payments and taxes grow," Davis said in a statement. "Our aim is to reverse that trend with ‘Operation Never Say Die’ and others like it."
Officials have not released the names of all the individuals or the specific hospice companies involved as the investigation continues. The charges reflect a growing focus on rooting out waste and criminal activity within the health care sector, particularly in lucrative areas like hospice care.
Political tensions over fraud enforcement
The federal takedown has also highlighted political friction between the Trump administration and California's state government. First Assistant U.S. Attorney Bill Essayli, an appointee of the current administration, referred to California as the "kingdom of fraud" during a press conference announcing the arrests. The Trump administration has made California a focal point of its national anti-fraud efforts, alleging the state has been lax in controlling improper spending.
Governor Gavin Newsom’s office pushed back against this characterization, stating that California has been aggressively tackling hospice fraud for years. A spokesperson noted that the governor signed a law in 2021 to place a moratorium on new hospice licenses due to widespread fraud concerns. The state has since revoked more than 280 hospice licenses, with an additional 300 providers currently under investigation.
"Glad the federal government is finally stepping up to do their part,” Newsom’s press office wrote in a post on the social media platform X. The exchange underscores a broader debate over whether states or the federal government should lead the charge against health care fraud, which costs the country billions of dollars each year, a figure that could impact large taxpayer-funded projects.
The broader impact of hospice fraud
Hospice fraud represents a particularly egregious form of health care abuse. The system is designed to provide compassionate end-of-life care, funded by Medicare for eligible seniors and disabled individuals. Fraudulent operators exploit this trust by billing for non-existent patients, enrolling healthy individuals, or offering kickbacks to patient recruiters, as detailed in the Department of Justice press release. In other medical news, UChicago Medicine debuts robotic tech for lung cancer detection.
This not only drains taxpayer funds but also risks implicating vulnerable people in criminal schemes and can prevent legitimate patients from receiving the care they need. Dr. Mehmet Oz, who runs the Centers for Medicare and Medicaid Services (CMS), said that federal officials "took out" 221 hospices in the last 10 weeks alone, though further details on those actions were not immediately available.
The defendants arrested in the Los Angeles-area bust now face years in federal prison if convicted. First Assistant U.S. Attorney Essayli delivered a stern warning, saying, "The defendants arrested this morning who are charged with stealing millions of dollars of health care benefits got caught and now face years in federal prison."
