Hospice fraud drained $267 million from California’s medical system using fake patients and shell companies

California’s medical system lost $267 million to a fraud scheme that used stolen identities to fabricate hospice patients and bill for services never delivered. Defendants bought personal identifying information of non-residents on the dark web, then enrolled those individuals in Medi-Cal through Covered California without their knowledge. They acquired hospice companies—Cherish Hospice Inc., Emanuel Hospice, and Azure Hospice Care Inc.—and began submitting claims for care that never occurred. No legitimate hospice services were provided. The operation funneled payments through more than 130 shell companies, dispersing funds across bank accounts, payment apps, and cryptocurrency. One account, held by Sarkis Ksachikyan, received $33 million in government funds. State officials have recovered over $30 million so far.