In a time when healthcare is a luxury for the average American, scammers used this moment to take advantage of taxpayer dollars. On April 2, the Justice Department (DOJ) announced a $50-million insurance fraud scam bust involving eight people from several different hospice care facilities stealing from Medicaid.
“We are enforcing a zero-tolerance policy for criminals who defraud American taxpayers,” said First Assistant United States Attorney Bill Essayli. “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.”
Among the eight individuals being charged with fraud, three were nurses, a chiropractor, and a psychologist. The defendants scammed Medicare by billing them with false reports of terminally ill patients and listing themselves as beneficiaries.
“The Southern California region is a high-risk environment for hospice-related and many other forms of health care fraud,” said Akil Davis, the assistant director in charge of the FBI’s Los Angeles Field Office. “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. We aim to reverse that trend with ‘Operation Never Say Die’ and others like it.”
Six of the defendants were arrested and made initial appearances on April 2 in the United States District Court in downtown Los Angeles. One defendant is expected to make his initial appearance in the U.S. District Court in Idaho.
“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 U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Today’s takedown reflects HHS-OIG’s commitment to deploy every tool at our disposal and collaborate with our law enforcement partners to dismantle hospice operations built on deception. Anyone who seeks to weaponize hospice care to bilk Medicare should expect to be held accountable.”
Lolita Beronilla Minerd, a licensed vocational nurse, was arrested for allegedly filing fraudulent hospice claims to Medicare through her Artesia-based Topanga Hospice Care.
Minerd billed Medicare for hospice services for people who are not suffering from terminal illnesses, often by recruiting people and providing kickbacks, the DOJ alleged.
Overall, the 65-year-old is accused of fraudulently receiving over $8.5 million.
Four people, including a licensed chiropractor, are accused of filing fake chiropractic and physical therapy claims to the International Longshore and Warehouse Union Pacific Maritime Association, a labor union’s health plan, and other private insurers.
The DOJ said the four accused submitted fraudulent claims under several chiropractic and physical therapy companies: Ohana Wellness Center, Ohana Management, and R3New Wellness in Carson, as well as the Huntington Beach-based One Life Acupuncture APC.
Gregory Cartmell, a licensed chiropractor in Idaho, and his co-conspirator Vincent Surace are accused of fraudulently receiving over $6.4 million by submitting fake chiropractic claims to the ILWU-PMA health plan.
The DOJ alleged that a woman, now in federal prison for hospice fraud, and her husband used their three Glendale-based hospices even though the wife had already been barred from owning health care facilities.
The woman, 76-year-old Nita Almuete Paddit Palma, is also accused of running the sham hospices while she was out on bail before her trial for fraud charges.
Palma and her husband, 68-year-old Adolfo Catbagan, allegedly stole from Medicare at least 4.2 million.
Federal investigators said Young Joo Ko financially benefited from the U.S. government by posing as a nurse and creating fake immigration documents. Ko is accused of claiming that non-existent immigration applicants needed medical examinations.