Five arrests made in $267M California hospice fraud case
Five people were arrested by California DOJ in a hospice fraud scheme that defrauded nearly $250 million, AG Rob Bonta announced on April 9.
Five people were arrested by the California Department of Justice in connection with a major health care and hospice fraud scheme in Southern California that defrauded taxpayers of nearly a quarter of a billion dollars, Attorney General Rob Bonta announced on April 9. In total, the state filed charges against 21 people.
The investigation, Operation Skip Trace, which the state’s DOJ initiated, uncovered and dismantled a Medi-Cal scheme in which 14 hospice companies purchased personal information of non-California residents on the dark web and enrolled the stolen identities in the state-administered Medicaid program.
How was the California hospice fraud case…
Investment fraud targets the human desire for financial growth by promising high returns with “low to no risk.”
- Ponzi Schemes: Named after Charles Ponzi, these schemes pay “returns” to earlier investors using the capital brought in by newer investors. There is no actual underlying business; the system collapses when new recruitment slows down.
- Pyramid Schemes: Similar to Ponzi schemes, but participants are usually required to sell a product or service. The primary “profit” comes from the recruitment fees of new members rather than actual product sales.
- Pump and Dump: Fraudsters spread false, positive rumors about a cheap stock (the “pump”) to drive up the price. Once the price peaks, they sell their shares (the “dump”), leaving other investors with worthless stock.