WATCH: California probe ends $267M in alleged hospice fraud

California Attorney General Rob Bonta has announced the results of a massive hospice fraud bust in Los Angeles County. Known as Operation Skip Trace, the bust ended a hospice fraud scheme that defrauded Medi-Cal of $267 million, Bonta said. "These are funds that are paid for by Californian taxpayers, funds that are meant to provide care to Californians in need," said Bonta at a press conference Thursday in Los Angeles. "It is unacceptable, it is illegal, and we will not stand for it." Medi-Cal is California's version of Medicaid. On April 2, the Office of the Attorney General filed felony criminal charges against 21 suspects. Charges include health care fraud, money laundering and identity theft. OAG followed that on Wednesday by executing search and arrest warrants at 10 locations. Five suspects have been arrested so far throughout Southern California. "This is our case, a California case, from beginning to end," said Bonta. "While health care fraud might be President Trump's shiny new political talking point, California DOJ has been going after health care fraud since 1979." Operation Skip Trace was initiated after a tip from the California Department of Healthcare Services of alleged hospice fraud at 14 companies. California DOJ's Division of Medi-Cal Fraud & Elder Abuse investigated those companies, as well as a billing company and eight individuals suspected of money laundering. According to Bonta, those involved in this scheme would purchase personal identifying information for people who live outside of California on the dark web and then enroll them into Covered California, posing as California residents. Participants in the alleged fraud then bought hospice companies and began billing Medi-Cal for nonexistent services for those stolen identities, Bonta said. "They used fake records, nonexistent offices and fake diagnoses to justify these claims," Bonta told reporters. "Meanwhile, the so-called patients were healthy, out of state and completely unaware that they had been enrolled in hospice care." After the money was paid out, Bonta said it was funneled through a "complex web of over 130 shell companies" hidden across bank accounts, payment apps and cryptocurrency. Bonta explained the alleged fraud was a "brazen, calculated, criminal scheme" to exploit the Medi-Cal system. "They stole from the state of California and Medicaid and prevented services and care from going to sick individuals who actually need it," said Bonta. "Let this be a lesson to anyone targeting Medi-Cal and hospice care in California. We are on the case, and we are coming for you." California Health and Human Services Secretary Kim Johnson agreed. "When the state identifies a problem, we take action," Johnson told reporters at Bonta's press conference. "Today's announcement is an example that demonstrates our commitment and effectiveness to act decisively when we see evidence of fraud in the programs we administer." Gov. Gavin Newsom, who said in 2025 that he will consider running for president, congratulated his fellow California officials and agencies for their "swift work" in bringing the charges. "Since these are state charges, Donald Trump cannot pardon these individuals in exchange for campaign donations," the Democratic governor said. The Center Square on Thursday sought comment from the White House, which referred the news outlet to Vice President JD Vance's office. Vance – who in March 2026 was put in charge of a federal task force to eliminate fraud – did not respond by press time. Susan Shelley of the Howard Jarvis Taxpayers Association said California officials did not take meaningful steps to investigate and stop hospice fraud after the state auditor warned of it in a report titled, "The State's Weak Oversight of Hospice Agencies Has Created Opportunities for Large-Scale Fraud and Abuse." The report was released in 2022. "Taxpayers can be grateful that the federal government has taken strong action against fraudsters and schemes that have stolen hard-earned tax dollars," said Shelley, the association's vice president of communications. "It's good news that the state attorney general has now decided to help," Shelley told The Center Square. The Howard Jarvis Taxpayers Association has offices in Los Angeles and Sacramento. Assembly Minority Leader Heath Flora told The Center Square that this is tax season - a good time to remember that more needs to be done to ensure tax dollars are wisely spent. "This is not even a debate about which vulnerable population should be prioritized for government services," said Flora, a Republican who serves Amador, Calaveras, Sacramento, San Joaquin and Stanislaus counties. "This is an acknowledgment, at both the state and federal levels, that there is a massive, organized criminal effort to defraud California's social safety net programs that taxpayers are footing the bill for." Tim Anaya, vice president of Pasadena-based Pacific Research Institute, said this is something that taxpayers of every state should care about and pay attention to at this time. Anaya explained taxpayers have a right to expect that programs are going to spend tax dollars properly. He added governments at every level should do better at oversight. "We should take this example of today to demand that elected officials and law enforcement at every level of government all across the country, they have their watchdog hats on," Anaya told The Center Square. "We do it in our private lives when we are balancing our checkbooks every month. Why don't we have the same expectations for government officials spending the people's checkbook? Why aren't they doing this every day? And why aren't they doing a better job of it? So absolutely, these are important."