Hospice FRAUD Empire–NEWSOM BUSTED!

Fraud blocks under magnifying glass on invoices.

California taxpayers are hemorrhaging millions as 742 fraudulent hospice agencies continue bilking Medicare despite years of warnings, with investigators discovering 89 shell companies registered to a single vacant Los Angeles building where piled-up mail and dead phone lines expose Governor Newsom’s catastrophic failure to stop organized crime networks.

Story Highlights

CBS News found 89 hospice agencies registered to one empty Van Nuys building with no patients, staff, or operational signs—just abandoned offices and disconnected phones.
742 hospice agencies across LA County show red flags for fraud but remain operational, billing Medicare for nonexistent services using credentials stolen from the dark web.
Governor Newsom’s administration missed a January 1, 2026 deadline to implement emergency regulations recommended by a 2022 state audit that exposed “weak controls” enabling large-scale fraud.
Assemblywoman Alexandra Macedo discovered 197 agencies at another Van Nuys address, demanding transparency as terminal patients are denied dignity while fraudsters exploit lax oversight.

Shell Companies Exploit Vulnerable Patients

CBS News journalists physically visited a Van Nuys Boulevard building where 89 hospice agencies are registered, uncovering a ghost operation. The building stood vacant with piled-up mail, disconnected phone lines, and no signs of medical care. These shell companies exploit California’s broken licensing system to bill Medicare and Medi-Cal for services never provided to dying patients. Fraudsters purchase stolen medical credentials from the dark web, creating fake agencies that exist only on paper while taxpayers fund phantom care for America’s most vulnerable citizens.

LA County Becomes National Fraud Epicenter

Los Angeles County hosts approximately 1,800 licensed hospice agencies, with 500 crammed within just three miles in Van Nuys alone—an impossible concentration for legitimate operations. State standards identify 742 agencies showing multiple fraud indicators, yet they continue operating without intervention. This clustering emerged after 2020 when lax state licensing allowed rapid proliferation despite repeated warnings. Between January 2015 and August 2021, the California Department of Public Health received over 2,100 complaints including 350 alleging fraud or abuse, yet routinely granted licenses to suspicious applicants without verifying management qualifications or investigating red flags.

Newsom Administration Ignores Audit Deadlines

A 2022 State Auditor report documented “weak controls” creating opportunities for “large-scale fraud” by organized networks, recommending emergency regulations including identity verification requirements. Governor Newsom’s administration failed to implement these protections by the mandated January 1, 2026 deadline, allowing fraudulent operations to persist unchecked. While Newsom’s spokesperson touts revoking 280 licenses and DOJ partnerships, critics note this response ignores the core problem: the state continues licensing agencies despite knowing fraud indicators exist. This regulatory failure reflects the same government incompetence conservatives warned about when Democrats prioritize bureaucratic processes over protecting citizens from criminal exploitation.

Republican Leaders Demand Accountability

Assemblywoman Alexandra Macedo conducted her own investigation at a separate Van Nuys building, discovering 197 hospice agencies registered to one address. Finding no patients and a broken system, she sent a letter to Governor Newsom demanding immediate action on the overdue regulations. Attorney General Rob Bonta acknowledged enforcement focuses on reacting after damage occurs rather than preventing fraud, stating officials must “react to red flags, not just count them.” This admission confirms what taxpayers already knew: California’s Democrat-controlled government allows criminals to operate openly while legitimate rural hospice providers face stigma and regulatory burdens that drive up costs.

Taxpayers Fund Organized Crime Networks

The fraud extends beyond individual scammers to organized networks systematically defrauding federal healthcare programs. These criminals rent dilapidated “Medical Plaza” properties in disadvantaged LA communities, registering hundreds of fake agencies to industrial-scale billing operations. Terminal patients and their families suffer denied care when they need comfort and dignity most, while billions in Medicare funds enrich fraudsters instead of serving Americans who contributed taxes their entire lives. Legitimate hospice operators face increased scrutiny and compliance costs, creating barriers that harm honest providers. This represents government waste and regulatory failure at its worst—protecting criminals while burdening law-abiding citizens with the consequences of progressive mismanagement.

The hospice fraud crisis exposes fundamental problems with California’s bloated bureaucracy under Democrat control. Years of warnings, audits, and investigations produced minimal action while fraudsters continued exploiting dying patients and taxpayers. As President Trump works to restore accountability in Washington, California serves as a cautionary tale of what happens when government prioritizes procedure over protection, allowing organized crime to flourish under the cover of inadequate oversight and delayed reforms that never materialize.