SACRAMENTO — California Attorney General Rob Bonta announced Thursday that 21 individuals have been charged in “Operation Skip Trace,” a sweeping investigation that uncovered one of the state’s largest hospice fraud schemes in recent years. Prosecutors allege the group used stolen personal data purchased on the dark web to file more than $267 million in fraudulent Medi-Cal claims for hospice services that were never provided.
According to the Attorney General’s Office, the defendants operated through a network of 14 straw companies and 130 shell entities. The scheme targeted out-of-state residents whose identities were bought online and then used to submit claims for hospice care supposedly delivered in California. No actual patients received services, and many of the billing addresses were linked to empty or abandoned facilities.
State officials said they have already recovered approximately $30 million of the stolen funds. The investigation is ongoing, and authorities expect additional charges and asset seizures in the coming weeks.
The fraud came to light in part through the work of independent journalist Nick Shirley, whose undercover videos exposed multiple “ghost” facilities across Los Angeles County. One site highlighted in his reporting, Healthy Life Adult Daycare, billed Medi-Cal nearly $20 million despite appearing completely vacant during his visits. Shirley’s footage, which showed locked doors, overgrown parking lots, and no signs of patient activity, helped draw public and official attention to the broader problem of hospice and adult-daycare fraud in the region.
“This scheme didn’t just steal money — it exploited a vulnerable system meant to care for our sickest residents,” Bonta said in a statement. “These defendants allegedly turned hospice care into a profit machine built on lies, fake companies, and stolen identities. We will not tolerate it.”
The case underscores growing concerns about hospice fraud nationwide, particularly within California’s Medi-Cal program, which has seen several high-profile busts in recent years. Officials noted that the use of dark web data and layered shell companies made the scheme particularly difficult to detect until whistleblower tips and on-the-ground reporting brought it into focus.
All 21 defendants face multiple felony counts, including conspiracy, Medi-Cal fraud, and identity theft. Arraignments are scheduled in Los Angeles Superior Court over the next several weeks.
The Attorney General’s Office is urging anyone with information about additional fraudulent hospice or adult-daycare operations to contact the Medi-Cal Fraud Division hotline.
