California authorities have charged 21 individuals in connection with a large-scale hospice fraud scheme that cost the state’s medical system approximately $267 million. The case, announced by Attorney General Rob Bonta in April 2026, is the result of an extensive investigation dubbed Operation Skip Trace, which targeted a network of sham hospice companies operating primarily across Southern California.

At the center of the alleged conspiracy are five principal defendants who were arrested and face multiple felony charges including insurance fraud, money laundering, conspiracy, and identity theft. Prosecutors allege that the accused obtained personal identifying information of individuals who did not reside in California by purchasing data from the dark web. Without the victims’ knowledge, these identities were used to enroll them in Medi-Cal programs through Covered California. The conspirators then acquired hospice companies and submitted claims billing the state for services that were never provided.

According to the criminal complaint, the fraudulent operation exploited the Medi-Cal system methodically and intentionally. “Over the life of this fraud scheme, not a single legitimate hospice service was ever provided, yet millions were billed in a brazen, calculated scheme,” Bonta said, emphasizing that this was deliberate fraud rather than a systemic loophole or administrative error.

The scheme involved submitting false claims not only to California’s Medi-Cal program but also to federal health care programs. Authorities revealed that more than $30 million in recovered state funds were funneled through over 130 shell companies. The defendants reportedly used diverse methods to conceal the flow of illicit proceeds, including payment applications and cryptocurrency transactions.

Among those charged are corporate executives believed to have orchestrated the extensive series of false claims. Some of the implicated hospice companies reportedly operated without physical facilities, further pointing to the fraudulent nature of their business operations.

Bonta highlighted that hospice fraud is an ongoing issue nationwide and stressed that the problem is not unique to California. This crackdown forms part of a broader initiative by state and federal agencies to identify and dismantle similar fraudulent hospice operations elsewhere in the country.

If convicted, the primary suspects face the possibility of lengthy prison sentences, with some penalties potentially extending beyond ten years. The Attorney General’s office continues to investigate to ensure accountability and prevent further abuse of public healthcare funds.