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California AG announces arrests in $267 million hospice fraud scheme

April 10, 2026

The California Department of Justice has arrested five people and charged 21 total for their alleged roles in a hospice fraud scheme that pilfered $267 million through Medi-Cal, state Attorney General Rob Bonta announced Thursday, April 9.

Bonta announced the busts, dubbed “Operation Skip Trace,” during a news conference in Los Angeles where he spent much of the time pushing back against the Trump administration’s claims that California is not doing enough to address rampant fraud in the state’s hospice industry.

“This is just the latest example of the California DOJ’s long-standing, ongoing and successful efforts to combat hospice and medical fraud,” Bonta said. “We’ve been doing it for years, we’ve been doing it successfully before certain people in this country decided to think about it for the first time.”

Investigators seized two handguns and $757,000 in cash from raids at 12 locations throughout Southern California. The DOJ’s Division of Medi-Cal Fraud and Elder Abuse has recovered about $30 million from the fraudulent billings so far.

“This wasn’t a case of billing errors, cutting corners, or upcharging care,” Bonta said. “This was a brazen, calculated criminal scheme that exploited the Medi-Cal system, stole from the state of California and Medicaid, and prevented services and care from going to sick individuals who actually need it.”

The Department of Health Care Services initially flagged the potential fraud to state law enforcement in May 2025. Investigators then identified 14 hospice companies, purchased through straw owners, that were using the stolen identities of non-California residents, purchased from the dark web, to enroll those individuals, without their knowledge, in Medi-Cal through Covered California.

“They used fake records, non-existent offices and fake diagnoses to justify these claims,” Bonta said. “Meanwhile, the so-called patients were healthy, out of state and completely unaware they had been enrolled in hospice care.”

No hospices services were ever rendered, officials said. The billings were laundered through 130 shell companies and cryptocurrencies, according to the DOJ.

The charges, filed across three criminal complaints, include conspiracy, insurance fraud, identity theft and money laundering. Many of the payments were allegedly submitted through Legit Billing Solutions, a Rancho Cucamonga-based company run by Roberto Sabiron Rubillar Jr. and Liezyl Rubillar, according to the complaints.

The Rubillars are the only people named in all three complaints.

Kim Johnson, secretary of California Health and Human Services, said the companies in question were removed from the Medicaid program and payments were halted as soon as the fraud was discovered. The department also reassessed the systems in place to catch such fraud.

The department is improving those safeguards by ensuring hospice claims are paid only when the proper documentation is provided, establishing a faster and more secure online process and developing stronger checks and balances to weed out fake and stolen identities earlier, Johnson said.

“Any misuse of stolen identities, or improper billing, is unacceptable and undermines the trust Californians place in this program,” she said.

California imposed a moratorium on new hospice licenses in 2022 after a state audit raised concerns about the potential for “large-scale fraud and abuse” within the industry. That moratorium is currently slated to end in January 2027.

Much of the alleged fraud in California is tied to Los Angeles County. Hospices linked to the $267 million scheme are located in Van Nuys, Tarzana, Glendale, Torrance and Garden Grove, records showed.

“There is a lot of it in Los Angeles County, there is no doubt about it,” Bonta said, before noting that hospice fraud is a problem throughout the country. California, as the most populous state in the country, has a proportionate amount of fraud, he said.

The federal government is also increasing its oversight in Texas, Georgia, Ohio and other states as well, he said.

Under his tenure, the Department of Justice has conducted 294 hospice-related investigations, filed 119 hospice-related criminal cases and secured 51 convictions, he said.

Critics, however, continue to point to Los Angeles County as “ground zero” for fraud due to the density of hospices in certain communities. Hundreds of hospices are registered within blocks of each other in Van Nuys, for example, and vastly outpace the need.

The number of active hospices in the five-county Greater Los Angeles area spiked from 722 in 2018 to 1,799 in 2024. Today, the same region — L.A., Orange, San Bernardino, Riverside and Ventura counties — accounts for nearly a quarter of the hospices in the country.

That number grew, despite the moratorium, because hospices go through a two-pronged approval process. California approves the license, which gives a hospice the right to exist, but the U.S. Centers for Medicare and Medicaid, or CMS, approves the right to bill the taxpayer-funded health care systems for services provided.

A significant number of hospices obtained licenses prior to the moratorium and then sat on those licenses, sometimes for years, before progressing to the federal approval process, experts said.

The federal side did not have a corresponding moratorium in place.

Last month, hospice and home health care providers in California sent a letter to CMS requesting exactly that. The letter asked Dr. Mehmet Oz, the administrator of CMS, to halt new enrollments from providers in California “until more durable corrective measures are developed and implemented.”

The announcement of “Operation Skip Trace” came about a week after federal authorities announced separate charges against 15 people for $50 million in hospice and health care fraud in Southern California. During the news conference regarding “Operation Never Say Die,” federal officials similarly took shots at the administration of Gov. Gavin Newsom, who they called “The King of Fraud.”

At the time, Oz said CMS is reviewing “every single hospice in California” and has revoked approvals for 230 hospices in the last 10 weeks alone.

California officials, amid the national debate, have repeatedly highlighted their fraud prevention efforts over the years to try to counter the federal government’s messaging. Newsom, on social media, has blamed CMS, at one point saying he was “glad to see the feds finally taking seriously the fraud in the programs they themselves manage.”

And Bonta, during his news conference, said the White House “is late to the party.”

On April 7, more than 80 investigators and surveyors from the California Department of Public Health, Department of Health Care Services and Department of Tax and Fee Administration swarmed an office building in Van Nuys spotlighted in the political battle due to the excessive numbers of hospices registered to the address.

The state audit identified 112 hospices at 14545 Friar St. back in 2021, while a state database linked 89 to that address this year. A federal source, meanwhile, listed about 40 certified hospices at that location as of January.

A person enters the Merabi Professional Medical Plaza Building in Van Nuys on Friday, March 13, 2026. State Assemblymember Alexandra Macedo says she found 197 hospices registered to this address in Van Nuys and has, along with other Republican lawmakers, called on Gov. Gavin Newsom to address abuses in the industry. On Tuesday, April 7, 2026, LA County Board of Supervisors passed a motion to work with federal and state enforcement efforts of fraud in home care and hospices in LA County. (Photo by Sarah Reingewirtz, Los Angeles Daily News/SCNG)

The compliance check went door to door in the Friar Street building. Video released by the Department of Public Health shows investigators knocking on a door and calling a listed number only to find it disconnected.

The footage shows individuals carrying cardboard boxes and wheeling a filing cabinet out of the building.

The Department of Public Health found that only 19 of the hospices at that location are licensed by the state and eligible to bill Medi-Cal. Another 109 have never been issued a license. More than half of the hospices were denied because of the moratorium, according to a news release

“As part of our ongoing work, we are in Los Angeles County actively investigating hospice providers,” said Dr. Erica Pan, director of CDPH, in a statement. “Protecting patients and safeguarding the integrity of our health care system remains our top priority, and we will continue to hold providers accountable.”

An investigation by the Southern California News Group found that a group registered 22 hospices at that address in a year, including 15 hospices incorporated on a single day inside a single suite. Though no physical subdivisions existed, each hospice used a variation of “Suite 205” with a letter appended to it — from “A” to “P” — to circumvent rules prohibiting hospices from operating out of the same physical space.

Those hospices all received licenses, despite having overlaps in addresses and personnel, and collected $12.3 million from Medicare and Medi-Cal. Three were later involuntarily decertified by CMS, including one that assigned terminal illnesses to patients who were not, in fact, dying.

Last month, CDPH stated it had revoked eight licenses at the Friar Street address, with another 12 providers in the process of being revoked. Separately, CMS had terminated the certifications of 21 providers, according to a spokesperson.

The building’s owner advertises “virtual offices,” with day passes to use actual office space, specifically to industries needing to “obtain licenses” in the state. State law requires hospices to maintain a physical office, even if care is provided in someone’s home or in another facility.

California AG announces arrests in $267 million hospice fraud scheme Orange County Register

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California AG announces arrests in $267 million hospice fraud scheme

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