Twenty-one people have been charged as part of a massive fraud scheme that defrauded California's Medi-Cal system out of $267 million. According to California Attorney General Rob Bonta, the investigation, called Operation Skip Trace, led to the arrest of five principal conspirators on suspicion of insurance fraud, money laundering, conspiracy, and identity theft.
Key Takeaways
Twenty-one individuals have been charged in connection with a massive $267 million hospice fraud scheme that defrauded California's Medi-Cal system. The operation, known as Operation Skip Trace, involved purchasing personal information from non-residents on the dark web and billing for services never provided.
- 5 principal conspirators arrested; 21 charged in total
- Scheme bilked Medi-Cal out of $267 million over several years
- Defendants allegedly used stolen identities to enroll fake patients in hospice care
- No legitimate hospice services were ever provided, according to prosecutors
The defendants allegedly purchased personal identifying information from non-California residents on the dark web and enrolled them in Medi-Cal through Covered California without their knowledge. They then bought hospice companies and billed the state for services they never rendered. Bonta emphasized that "this wasn't a mistake or a loophole; it was deliberate fraud." As reported by Los Angeles Times, prosecutors allege that Robert Sabiron Rubillar and Liezyl Rubillar, CEO and CFO of Legal Systems Billing Solutions, masterminded the scheme. The couple, along with three others, were arrested as state investigators served search warrants at ten locations across Southern California.
According to CBS News, the defendants collected money without providing a single legitimate hospice service. The law enforcement effort targeted 14 hospice companies and involved billing the government for hospice care using stolen identities. Tyler Sadwith, DHCS' chief deputy director of health care programs and California state Medicaid director, told CBS News that over 300 hospices are currently under investigation for possible license revocation.
The charges include conspiracy to commit healthcare fraud, healthcare fraud, money laundering, and identity theft. Defendants also face aggravated white-collar crime and money laundering enhancements. According to Fox News, California Health and Human Services Secretary Kim Johnson noted that the DHCS halted payments and suspended all fraudulent hospice providers. "There is a moratorium currently in place through January 2027 for new licensed providers," Johnson stated.
The investigation highlights broader concerns about healthcare fraud, with federal authorities also cracking down on similar schemes in Georgia, Texas, and Ohio. Bonta stressed that fraud is not unique to California but acknowledged the state's significant funding levels make it a target. The charges are part of ongoing efforts by state and federal prosecutors to address hospice fraud, which has become a politically charged issue.
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