HealthCare Fraud Defense Lawyer | California Hospice Fraud Takedown & DOJ Arrests Explained 2026

More Than $50 Million in Intended HealthCare Fraud Losses at Risk

Federal prosecutors in Los Angeles have framed “Operation Never Say Die” as a sweeping healthcare fraud takedown. The underlying DOJ release, however, remains an accusatory document—not proof of guilt—and it leaves substantial room for the defense in each case.

What DOJ Says Happened in “Operation Never Say Die”

The U.S. Attorney’s Office for the Central District of California announced charges against multiple defendants—owners and operators of hospices and clinics, licensed vocational nurses, a clinician using an unaccredited psychology degree, chiropractors, and others—across several separate cases. The government’s overarching theory is that these defendants orchestrated schemes to bill Medicare and a union health plan for services that were not medically necessary, not provided, or tainted by illegal kickbacks.

Hospice Allegations: Non‑Terminal Patients and Cash Kickbacks

In several indictments, DOJ targets hospice businesses that allegedly enrolled patients who did not meet Medicare’s hospice eligibility criteria:

Topanga Hospice Care Inc. – USA v. Minerd.
A licensed vocational nurse is accused of billing Medicare for more than $9.1 million in hospice claims between 2020 and 2025, with about $8.5 million paid. DOJ asserts that many patients were not terminally ill, multiple beneficiaries shared addresses far from the hospice, and the defendant paid cash (roughly $300 per person per month) and other inducements (nutrition shakes, wheelchairs, walkers) to recruit patients for hospice care they did not need. Topanga reportedly had an 85% non‑death discharge rate, compared to a national average of about 17.2%, which prosecutors treat as a statistical red flag.
626 Hospice Inc. (St. Francis Palliative Care) – USA v. Gill, et al.
A man described as holding a psychology degree from an unaccredited institution and his nurse spouse allegedly operated 626 Hospice by paying kickbacks for non‑terminal referrals and submitting more than $5.2 million in hospice claims, with over $4 million paid. DOJ alleges they then laundered proceeds into personal expenses, including mortgage payments, home improvements, car payments, flights, dining, school tuition, and other household bills.
One Up, Rosewood, and Advance Hospice – USA v. Palma, et al.
A woman previously convicted in three federal fraud cases, and excluded from Medicare/Medicaid, allegedly continued to control three hospice entities in Glendale—One Up Hospice, Rosewood Hospice and Palliative Care, and Advance Hospice and Palliative Care—by placing her husband in as nominal owner and CEO while she directed operations. According to DOJ, these hospices billed Medicare for at least $4.8 million (over $4.2 million paid) in claims for patients who were not terminally ill, with physicians sometimes falsely certifying terminal status or billing for visits never performed.
Comfort Choice Hospice Inc. – USA v. Tindimobuna.
Another licensed vocational nurse is accused of orchestrating hundreds of hospice claims for dozens of non‑terminal patients, billing Medicare for more than $3.8 million and receiving approximately $3.4 million, allegedly while paying kickbacks to marketers in violation of the Anti‑Kickback Statute.
Valley Pacific Hospice Inc. – USA v. Lauritzen.
The CEO/CFO of Valley Pacific allegedly directed a scheme to enroll and bill hospice patients who did not meet Medicare’s criteria, producing a live discharge rate over 75%—again contrasted with a national 17% benchmark. DOJ further alleges forged physician signatures on enrollment forms and hospice certifications, with more than $580,000 billed and about $526,000 paid before CMS revoked Valley Pacific’s enrollment in the Medicare program.

Union Health Plan and Commercial Fraud Allegations

The takedown also targets alleged schemes against the ILWU‑PMA Welfare Plan and other insurers:

Ohana Wellness, R3New Wellness, and Others – USA v. Aulava‑Moala, et al.
Four defendants, including a chiropractor and the owner of a billing company, are charged with a $19‑million fraud against the ILWU‑PMA plan and others. Prosecutors allege they enticed plan members to submit to medically unnecessary services, fabricated or inflated documentation, and billed for chiropractic/physical therapy services that were unnecessary or not provided.
Chiropractic Billing Through a Proxy – USA v. Cartmell and USA v. Surace.
DOJ claims that a chiropractor (Cartmell) billed approximately $9.14 million to the ILWU‑PMA plan and received about $6.43 million before the plan terminated him. After termination, he allegedly continued by routing claims through another chiropractor (Surace), using Surace’s name and credentials in exchange for a share of the proceeds.
Bee Well Holistic Wellness Center – USA v. Griffen.
After Bee Well was terminated from the ILWU‑PMA plan, its owner allegedly arranged for two chiropractors to allow claims to be submitted under their names for services not rendered, using fictitious office addresses and spanning multiple states, submitting nearly $5 million in claims and receiving about $2.5 million.

See Federal Healthcare Fraud Defense: What Physicians and Healthcare Companies Need to Know About DOJ’s 2026 Enforcement Priorities

Immigration Medical Examination Fraud

Immigration Form Schemes – USA v. Ko.
A lawful permanent resident allegedly falsified immigration medical examination forms by posing as a nurse and later as a doctor, preparing documents indicating that green‑card applicants had been examined by civil surgeons when no such exams occurred.

Across all matters, DOJ emphasizes a coordinated strategy, the volume of alleged losses (over $50 million), and the involvement of many types of health care professionals. This is classic staging for a high‑profile enforcement campaign—but it does not settle any individual’s culpability.

Arrest Does Not Mean Guilt

The press release itself notes that indictments and complaints contain only allegations, and all defendants are presumed innocent until proven guilty. That is not boilerplate. In practice, prosecutors still face a series of legal and factual hurdles in each case:

Proving falsity:
They must show that patients were not terminally ill under Medicare hospice criteria or that billed services (chiropractic, physical therapy, psychological care) were not provided or were not medically necessary as those terms are actually defined and applied—not simply that the patterns look atypical.
Proving intent:
It is not enough to highlight high discharge rates, unusual referral patterns, or aggressive marketing. Prosecutors must prove that each defendant acted with knowledge or at least reckless disregard that the claims were false, that the kickbacks were illegal, or that the documentation was fabricated.
Proving individual responsibility:
DOJ must tie specific acts—billing decisions, certifications, kickback payments—to specific defendants. Titles such as “owner,” “CEO,” or “nurse” are not sufficient by themselves to establish participation in healthcare fraud.

A seasoned healthcare fraud defense lawyer will challenge each of these steps: what “terminally ill” meant in practice, how discharge statistics are interpreted, whether alleged kickbacks were in fact payments for legitimate services, and whether the right people are being charged.

Defendants’ Rights in a High‑Profile Healthcare Fraud Case

Despite the emotion and publicity around hospice and insurance fraud, defendants retain core rights:

Presumption of innocence. Jurors must begin with the understanding that the government bears the burden, and press releases—even from DOJ—are not evidence.
Right to counsel. Each defendant has the right to be represented, including by a healthcare fraud defense lawyer who understands Medicare hospice rules, union plan documents, and federal criminal procedure.
Right to confront and cross‑examine. Defendants can cross‑examine agents, cooperating witnesses, patients, and experts about how data were collected, what clinical standards were applied, and whether alternative explanations were considered.
Right to jury trial and due process. A conviction requires a unanimous jury, proper instructions, and proof beyond a reasonable doubt; pretrial detention and asset restraint issues must also be considered within constitutional limits.

Even in coordinated enforcement actions, these rights impose real constraints on how far DOJ can push its narrative in court.

Why Prosecutors Still Face an Uphill Battle in Complex Fraud Cases

The Supreme Court has repeatedly limited the government’s ability to use broad, amorphous theories in fraud prosecutions, including those that overlap with health care.

Honest‑Services Fraud and Overbroad Theories

In Skilling v. United States, the Court held that honest‑services fraud, 18 U.S.C. § 1346, is confined to bribery and kickback schemes, not all forms of alleged nondisclosure or mismanagement. In McDonnell v. United States, it narrowed the scope of what counts as an “official act” in corruption cases, rejecting expansive interpretations that risk criminalizing routine political interactions.

More recently, in Percoco v. United States, the Court unanimously reversed a conviction where a private person’s informal influence on government decision‑making was treated as honest‑services fraud, without a clear limiting principle. In each case, the Court resisted vague theories that could make nearly any suspect behavior prosecutable fraud.

Materiality and Scienter in False Claims‑Type Cases

In Universal Health Services v. Escobar, which involved mental health services billed to Medicaid, the Court emphasized that materiality under the False Claims Act is “demanding,” especially when the government continued to pay claims despite knowledge of alleged violations. And in United States ex rel. Schutte v. SuperValu Inc., the Court clarified that the defendant’s subjective belief about whether claims are lawful is central to the scienter inquiry.

Taken together, these decisions mean that:

Prosecutors cannot treat every regulatory deviation, documentation issue, or statistical anomaly as healthcare fraud.
They must confront what providers and administrators actually thought about medical necessity, eligibility, and billing rules at the time—not just what experts say in hindsight.

A careful healthcare fraud defense lawyer can integrate these precedents into motions, jury instructions, and trial arguments, forcing the government to move from narrative to proof.

Pretrial Publicity and the Right to a Fair Trial

Operations like “Never Say Die” are designed to generate strong headlines, complete with operation names, large dollar figures, and colorful details. That publicity raises legitimate concerns about whether jurors can remain impartial.Effects of Pretrial Publicity

Studies on pretrial publicity show that:

Negative, case‑specific media coverage can increase the likelihood that mock jurors and juries return guilty verdicts.
Detailed factual narratives—like DOJ’s description of cash payments, forged signatures, and lavish personal spending—have more impact than generic crime stories.paloaltou+1

This means that in a real jury pool, some prospective jurors will arrive with a specific story already in mind about hospice fraud in Southern California.

Legal Tools to Protect Fair‑Trial Rights

Courts acknowledge the risk but have also held that pretrial publicity does not automatically deprive defendants of a fair trial. Tools include:

Searching voir dire, often with written questionnaires, to identify juror exposure to coverage and attitudes about healthcare fraud.
Change of venue in extreme cases, where local publicity is unusually pervasive and inflammatory.
Clear jury instructions emphasizing that they must decide the case solely on in‑court evidence, not on media coverage.

Defenders can also document the volume and tone of publicity—press releases, video clips, social media shares—and argue for expanded safeguards where necessary.

Strategic Defense After a High‑Profile Healthcare Fraud Arrest

For those named in the DOJ release—or others who may receive target letters or subpoenas as the investigation continues—a few strategic realities stand out:

The government’s narrative is designed to sound overwhelming; it is not a neutral summary.
Each case is fact‑specific: patient records, plan documents, hospice regulations, and internal communications matter more than press‑conference sound bites.
Supreme Court precedent and general fraud law require prosecutors to prove actual deception, materiality, and intent—not just point to suspicious numbers.

An effective response starts with retaining counsel who understands this terrain. A skilled healthcare fraud defense lawyer will:

Rebuild the factual timeline from the ground up.
Test the government’s metrics and assumptions against clinical realities and industry practice.
Enforce constitutional limits on searches, seizures, statements, and charging theories.
Address pretrial publicity proactively, not reactively.

If you are facing a federal criminal charge, contact the healthcare fraud criminal defense lawyers at Watson & Associates LLC. Call Toll Free 1.866.601.5518.