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Investigators allege that some operators went to extreme lengths to evade detection, including opening businesses under relatives’ names due to prior criminal records. One case alone has resulted in 11 defendants being tied to over $50 million in fraudulent billing.
First Assistant U.S. Attorney Bill Essayli did not hold back in assigning blame for the scale of the crisis.
“I call Gavin Newsom the ‘King of Fraud,'” Essayli said, “because he reigns over more fraud than we’ve seen in the history of the United States.”
Years of Warnings Ignored
What is fueling the political firestorm is not just the scale of the fraud—but how long officials were warned about it.
Back in 2022, California’s state auditor issued a formal alert to Governor Gavin Newsom, outlining a staggering explosion in hospice providers across Los Angeles County. Since 2010, the number of agencies had surged by roughly 1,500 percent, creating what watchdogs described as a dangerously saturated and poorly regulated system.
The county now reportedly has more hospice providers than dozens of entire states combined, despite not having a proportionally larger elderly population. Auditors highlighted suspicious patterns, including geographic clustering, questionable patient eligibility claims, and the use of stolen professional identities.
The warning reportedly described elements of the activity as “organized,” suggesting the involvement of coordinated criminal enterprises rather than isolated bad actors.
Despite the urgency, critics argue that meaningful regulatory action never materialized. A key deadline for implementing emergency hospice oversight measures—set for January 1, 2026—came and went without enforcement.
Meanwhile, federal officials moved forward.
Dr. Mehmet Oz, now leading the Centers for Medicare and Medicaid Services, contrasted the pace of federal intervention with California’s inaction.
“In 10 weeks we’re getting close to what Governor Newsom did in four years.”
A Decade-Long Fraud Machine
The roots of the crisis stretch back more than a decade. Federal prosecutors first linked organized crime networks to Medicare fraud in California as early as 2010, when dozens of individuals connected to an Armenian-American crime syndicate were charged in a $100 million healthcare scam.
Since then, authorities say the schemes have only grown more sophisticated.
Los Angeles County saw hospice agencies skyrocket from just over 100 in 2010 to well over 1,800 by 2021. Fraudsters allegedly exploited regulatory loopholes such as “license flipping,” allowing them to rapidly create new shell companies faster than oversight agencies could respond.
Investigators uncovered extreme cases of clustering, including dozens of hospice licenses tied to a single street and nearly 200 agencies registered to one building.
Even more disturbing are allegations that vulnerable seniors were targeted directly. According to federal findings, some individuals were offered small monthly payments and incentives to enroll in hospice care they did not need. Their Medicare information was then used to generate fraudulent claims—sometimes even billing for services tied to deaths that never occurred.
Officials estimate that tens of thousands of Medicare beneficiaries may have had their identities compromised in these schemes.
What Comes Next
Federal authorities indicate that the 221 suspended providers represent only the beginning of a broader enforcement push. Additional actions are expected as agencies continue reviewing hospice operations across California.
Dr. Mehmet Oz has announced plans to audit every hospice provider in the state before the end of the year—a move that could uncover even more fraudulent activity.
For now, the crackdown is being framed as a turning point. After years of alleged neglect, federal intervention has begun dismantling what officials describe as a deeply entrenched network of abuse.
But the political consequences remain uncertain.
Vice President JD Vance has signaled that accountability may not stop at the operators themselves. Referencing prior enforcement actions, he stated clearly that public officials are not beyond scrutiny.
“If he committed a crime, we’re absolutely going to prosecute it.”
As the investigation unfolds, the spotlight remains firmly on California’s leadership—and whether years of missed warnings will translate into real consequences.
Gavin Newsom Belongs In Prison!! IF YOU HAVE THE EVIDENCE, ARREST AND PROSECUTE HIM!!