Healthy patients allegedly lured into $50M hospice scam as feds expose cash kickbacks and fake care

A sweeping federal takedown in Los Angeles has exposed what prosecutors say is a brazen, multimillion-dollar scheme that turned end-of-life care into a cash grab, allegedly using people who weren't even dying to rip off taxpayers out of more than $50 million.

Eight defendants, including nurses, a chiropractor and a purported psychologist, were arrested in a crackdown targeting sham hospice operations and fraudulent medical billing schemes, according to the Justice Department.

At the center of the case, hospice companies are accused of signing up healthy patients, paying kickbacks and pocketing millions from Medicare for treatment that was never needed or never provided.

"We are enforcing a zero-tolerance policy for criminals who defraud American taxpayers," First Assistant U.S. Attorney Bill Essayli said Thursday. "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."

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One of the most striking allegations involves an Anaheim nurse, Lolita Minerd, who prosecutors say ran a hospice business that recruited patients at a market, promising them free services and $300 a month in cash to enroll.

The couple who signed up weren't terminally ill, something their doctor confirmed, but were allegedly paid $600 a month in envelopes of cash while Medicare was billed for end-of-life care.

Minerd's company alone submitted more than $9.1 million in claims, collecting roughly $8.5 million from taxpayers, authorities said.

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Investigators say the pattern repeated across multiple cases, patients who weren't dying were enrolled in hospice, marketers were paid illegal kickbacks and providers cashed in while delivering little or no legitimate care.

"The defendants charged today allegedly turned hospice care into a cash producing operation, resulting in more than $50 million in losses to taxpayers," said HHS Inspector General T. March Bell. "Anyone who seeks to weaponize hospice care to bilk Medicare should expect to be held accountable."

In another case, a Covina couple, a nurse and a self-described psychologist, allegedly pulled in more than $4 million from Medicare and spent it on mortgages, international travel, restaurants and personal bills.

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Federal prosecutors say one repeat offender went even further, allegedly running multiple fraudulent hospice companies while already facing charges in a separate case and legally barred from operating such businesses.

Beyond hospice fraud, authorities say the takedown uncovered a $19 million scheme targeting a labor union's health plan, where defendants allegedly billed for fake or unnecessary chiropractic and therapy services and even fabricated patient records.

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"Today's arrests are another decisive strike in our war on 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 you and hold you accountable."

Officials say Southern California has become a hotbed for hospice-related scams and other health care fraud schemes.

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"The Southern California region is a high-risk environment for hospice-related and many other forms of health care fraud," said Akil Davis, assistant director in charge of the FBI's Los Angeles Field Office. He noted the U.S. loses hundreds of billions of dollars annually to health care fraud, driving up premiums, co-payments and taxes for Americans.

Authorities say the crackdown, dubbed "Operation Never Say Die," is part of a broader push to dismantle fraud networks exploiting both taxpayers and vulnerable patients.

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"Health care fraud undermines federal programs, threatens public trust and diverts resources away 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 the damage goes far beyond dollars.

"When employee benefit plans become targets for fraud, it's not just the plans that are hurt, everyday working Americans, their families and their communities are hurt," said Robert Prunty of the Department of Labor.

If convicted, many of the defendants face up to 10 years in federal prison, with some charges carrying even longer sentences.