California Attorney General Rob Bonta and the Department of Health Care Services announced charges against 21 suspects and the dismantling of a major hospice fraud scheme that defrauded the state of $267 million.

Operation Skip Trace resulted in the arrest of five people after ten locations were searched across Southern California. Two handguns and over $757,000 in cash were seized.

Investigators discovered a scheme in which individuals purchased personal identifying information from the dark web and enrolled out-of-state residents — who were completely healthy and unaware — into California's hospice care system through Medi-Cal. The companies would then bill the state for services that were never provided and launder the money through a complex web of shell companies.

"Not a single legitimate hospice service was ever provided, yet millions were billed in a brazen, calculated scheme that exploited the Medi-Cal system," said Attorney General Bonta.

The defendants are charged with conspiracy to commit health care fraud, health care fraud, money laundering, and identity theft, with aggravated white collar crime and money laundering enhancements.

This comes on the heels of a separate federal takedown that saw eight individuals arrested in a $50 million hospice fraud operation in the Los Angeles area.

Credit: California DOJ