FBI cracks down on alleged $60M hospice fraud in LA County

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(The Center Square) – The FBI made multiple arrests Thursday in Los Angeles County in connection with allegations over a total of $60 million in hospice-related Medicaid fraud.

First Assistant U.S. Attorney Bill Essayli announced the arrests for Operation Never Say Die during a news conference.

"Federal agents from multiple agencies descended on fraudsters throughout Southern California, executing multiple arrests and search warrants," Essayli told reporters.

Eight people were arrested, Essayli said, and charges will be brought against 15 individuals who are accused of defrauding $60 million in health care fraud in greater Los Angeles County, including allegedly operating fraudulent hospice care businesses. 

Lolita Minerd, 65, from Anaheim, ran Artesia-based Topanga Hospice Care, which ran a $9.1 million price tag over five years, Essayli said.

According to Essayli, one couple said they were approached by Minerd at a grocery store to sign up as patients for her hospice care business. Essayli said they each received $300 a month from Minerd for allowing her to use their names as patients for her business.

Medicare paid $8.5 million on fraudulent claims filed on this couple's behalf, Essayli said.

Another couple, Gladwin and Amelou Gill, who were both previously convicted of tax evasion charges, were barred by law from opening a hospice, so they used their daughter's name to open the hospice care, Essayli said. He added their hospice received more than $4 million in Medicare reimbursement payments, and he noted they discharged 70% of their patients. 

Another person named in the press conference, Nita Palma, 76, who was previously convicted of health care fraud and is in a federal prison in Seattle, operated another hospice fraud company in Glendale with her husband Adolfo Catbagan, 68, of Glendale, for more than a year and a half, Essayli said. He added the couple submitted more than $4.8 million in fraudulent hospice care claims and got back more than $3.2 million from Medicare.

"This is not just a fraud problem. This is a California problem," Essayli said during the press conference. "The problem you see in California is that there is no vetting and no checking. They do not care because it's not their money." 

The press conference followed an early morning arrest of Gladwin and Amelou Gill in Los Angeles.

Dr. Mehmet Oz, the administrator for The Centers for Medicare and Medicaid, said during the news conference that he was present in Los Angeles during the couple's arrest.

"These law enforcement leaders and these brave men and women that I was able to witness this morning go after these criminals are doing God’s work," Oz said. "And they're going to be able to do it more effectively because there's been a demand made by the president and vice president of an all-of-government effort."

One of the hospice care facilities billed Medicare more than $9.1 million over five years for the care of patients who were supposedly terminally ill, Essayli said. He added the facility discharged 85% of their patients - five times the national average for a facility that is supposed to care for dying patients.

Assemblymember Alexandra Macedo, R-Tulare, reacted on Thursday to the arrests.

“Dr. Oz was excited to share with me that arrests were happening, and that this was just the beginning of what they would be doing out in California to combat hospice fraud,” Macedo told The Center Square on Thursday. “But they have a lot of questions as to how this was allowed to happen under [Gov.] Gavin Newsom’s watch for as long as it did.”

Macedo conducted a hospice fraud investigation herself in recent weeks, finding multiple hospice care businesses registered to addresses that are the locations of empty lots or run-down, empty buildings, according to previous reporting by The Center Square.

Her investigation showed that 300 separate businesses were tied to a small number of addresses, which she drove out to herself. She also found that many of the phone numbers associated with those businesses were disconnected. Macedo sent the results of her investigation to Congress.

“What my investigation showed me is who the ‘straw men’ were as the registered agents,” Macedo told The Center Square. “But there is very clearly somebody teaching them how to do this, or, in my opinion, a puppet master, so finding out who these people are attached to will come out with time.”

According to the U.S. House Committee on Oversight and Government Reform, Medicare, which reimburses hospice care providers, was defrauded an estimated $3.5 billion from fraudulent Medicare reimbursement payments just in Los Angeles County.

“The recent hospice fraud arrests in California are a stark reminder that government healthcare programs are vulnerable to abuse without strong oversight,” state Sen. Tony Strickland, R-Huntington Beach, told The Center Square on Thursday, answering questions by email. “Millions in taxpayer dollars were siphoned off while vulnerable patients were put at risk. It’s time for real accountability, aggressive enforcement, and consequences for those who failed to act.”

Some Democratic and Republican lawmakers who have authored Medicare-related legislation in California or who represent districts that include Los Angeles did not respond to The Center Square on Thursday. Other lawmakers on both sides of the aisle communicated through a spokesperson that they were not available to comment. The Centers for Medicare and Medicaid and the FBI did not respond to The Center Square's requests for comment.

While representatives with Newsom's office were not immediately available to discuss the arrests, they directed The Center Square to a comment that Newsom's press office posted on X on Thursday morning. 

"Great to see the federal government root out fraud in Trump’s federal health care system in California!" the press office said. "We're fully supportive." The post goes on to note "@CAGovernor Gavin Newsom banned new hospice licenses in 2021 because of rampant fraud."