Twenty-one individuals are facing prosecution in connection with a large-scale hospice fraud operation that authorities say defrauded California’s healthcare system of $267 million.
Attorney General Rob Bonta announced the findings of an investigation dubbed Operation Skip Trace on Thursday. Five primary conspirators were taken into custody on suspicion of numerous felonies, including insurance fraud, money laundering, conspiracy, and identity theft for their alleged involvement in an intricate hospice fraud scheme that spanned Southern California.
If found guilty, each could face a minimum of ten years in prison.
According to state prosecutors, the defendants obtained the personal identifying information of non-Californians from the dark web and, without their consent, enrolled them in Medi-Cal via Covered California. The defendants subsequently acquired hospice companies and started billing the state for services they never actually provided, as stated in the criminal complaint.
“Throughout the duration of this fraudulent scheme, not a single legitimate hospice service was ever offered, yet millions were invoiced in a bold, calculated scheme that preyed on the Medi-Cal system,” Bonta remarked. “This was not an oversight or a loophole; it was intentional fraud. This form of exploitation erodes trust, depletes vital resources, and jeopardizes care for those who genuinely need it.”
Prosecutors allege that Robert Sabiron Rubillar and Liezyl Rubillar, the CEO and CFO of Legal Systems Billing Solutions, orchestrated the fraud. The couple, along with three others, were arrested on Wednesday as state investigators executed search warrants at ten locations across Southern California.
They face charges of conspiracy and insurance fraud for allegedly filing fraudulent claims to Medi-Cal for Cherish Hospice Inc., Emanuel Hospice, and Azure Hospice Care Inc., according to another criminal complaint.
In a separate criminal complaint that also names the couple, another 16 individuals are charged with insurance fraud, identity theft, and conspiracy to commit health insurance fraud. In that complaint, prosecutors allege that Levon Darakchyan and Roberto Rubillar Jr. used fictitious patients to apply for hospice payments from the federal government for JTN Hospice, Medlight Hospice, LED Hospice, Beloved Hospice Care, Hope of LA Hospice, Sunset Hospice, Secured Hospice, and TC Hospice.
The group channeled government funds into bank accounts held by other conspirators involved in the case, including $33 million into an account owned by Sarkis Ksachikyan, according to the criminal complaint. Prosecutors claim that the conspiracy employed an intricate network of fronts, and many of the hospice locations were not traditional facilities.
“After the funds were disbursed,” Bonta stated, “they were routed through a convoluted network of over 130 shell companies and concealed across bank accounts, payment applications, and cryptocurrency to avoid detection.”
According to the attorney general, state officials have recovered over $30 million in state funds lost to the scheme.
The charges mark the latest in a series of significant actions taken by both state and federal prosecutors, as investigations into hospice operators have intensified. During his presidency, Trump and his administration sought to position California, particularly Los Angeles County, as the focal point of hospice fraud.
Last week, federal officials apprehended eight individuals and charged 15 in an alleged scheme to embezzle over $50 million in healthcare funds by operating fraudulent hospice facilities in Southern California.
Bonta mentioned on Thursday that federal authorities were also intensifying efforts in Georgia, Texas, and Ohio, highlighting that hospice fraud is a nationwide issue.
“To suggest this is solely a California issue is absurd,” he asserted.
