California Atty. Gen. Rob Bonta and First Assistant U.S. Attorney. Bill Essayli traded barbs at news conferences about health care fraud in downtown Los Angeles Thursday morning, sniping at each other over the billions lost to welfare plans and the increasingly politicized efforts to stop them.
“California has a fraud problem,” Essayli said at the 9:30 a.m. news conference, where he and a phalanx of federal investigators announced a mass takedown of doctors and others who they say lured vulnerable patients into unnecessary surgical procedures, sham treatment programs and bogus palliative care, bilking taxpayers out of nearly $2 billion.
“Whether it’s hospice fraud, health care fraud, or election fraud, California is the most successful at fraud,” the prosecutor added, appearing to connect those cases to his office’s simultaneous attempt to sequester midterm ballots that they said were delivered to noncitizens.
Bonta hit back at his own news conference across the street, saying Esayli deliberately evaded his team’s contribution to the raid — including the arrest of a surgeon accused of performing unnecessary and invasive procedures for profit — part of what he called the “inappropriate politicization and weaponization” of medical fraud investigations.
“For us, this is not a political game,” Bonta said. “This is about protecting taxpayer dollars, protecting the programs that sick and vulnerable Californians depend on, and protecting our state.”
Among the most chilling allegations revealed Thursday, two Angelenos were accused of paying so-called “body brokers” in Texas to recruit out-of-state homeless residents and people in 12-step programs into fake sobriety homes in California, where they were allegedly signed up for expensive insurance policies and frequently left to languish in decrepit squats.
“It was not a treatment, it was not a cure. It was exploitation,” said Colin McDonald, assistant U.S. attorney general for the National Fraud Enforcement Division.
Sober living homes have repeatedly come under fire in Southern California, most recently after the death of Cindy Crawford’s son, Presley Gerber, at a sober living home in Santa Monica in September.
In another case, an Anaheim cardiothoracic surgeon and a Tarzana chiropractor allegedly teamed up to refer patients to unnecessary and sometimes repeated X-ray-guided procedures to remove plaque from their arteries in what McDonald called “a fraudulent assembly line.”
Bonta said state investigators were responsible for the arrest of Anaheim surgeon Dr. Harold Tabie, accused of collecting more than $100 million in Medicare claims.
Three other Angelenos were accused of forcing local elderly people to receive hospice care when none of them were dying — a form of fraud for which “Los Angeles became ground zero,” McDonald said.
Prosecutors called it “one of the most expensive operations in the state of California.”
The Justice Department said in a press release that 15 defendants had been charged, including six medical professionals. Federal authorities said eight people were arrested, and five of them are expected to make their first appearance this afternoon in U.S. District Court in downtown Los Angeles. Two others were scheduled to appear in the Northern District of Texas and one in the Northern District of Illinois. It is unclear whether they are represented by lawyers; they have not yet entered a plea to the charges.
The Trump administration has named public benefits fraud among its big villains, blaming bad actors in blue states — and often the states themselves — for the sharp rise in the cost of care.
Medicaid and Medicare fraud rates have exploded in the wake of the COVID-19 pandemic, when many rules were relaxed and oversight was strained by efforts to expand care.
Last fall, the Justice Department went after Medicaid-funded autism treatment programs concentrated in Minnesota’s Somali community, while seeking to portray the state’s governor, Tim Walz, as complicit in their operation.
Essayli has similarly hammered California Gov. Gavin Newsom and other state Democratic leaders over hospice fraud and other schemes exploiting public benefits, frequently calling the governor the “fraud king.”
Welfare fraud has become something of a political football, as last year’s looming tax and spending funding cuts threaten to deprive millions of Americans of food assistance and health coverage and leave millions more in limbo amid tough new work rules.
Prosecutors now regularly trade barbs over whether California fraudsters or Washington’s austerity policies are responsible for the growing inaccessibility of care for average voters.
“I think the attorney general is having a press conference to talk about what he’s done: arresting fraudsters after they’ve stolen hundreds of millions of dollars is not enough,” Essayli said. “The fraud should never have happened in the first place.”
Bonta lamented that state investigators were denied any credit for their work in the federal government’s enforcement actions, noting that Essayli thanked local and state partners but did not identify teams.
“We are one of the state partners. This was a joint investigation that we were part of,” Bonta said. “We made the arrest of one of the main defendants – my team on the ground that was doing the work – and I didn’t expect that, but it would have been appropriate for anyone, including the first assistant, to recognize the team that was working on this case announced today.”
While claiming the omission was political, he also credited rank-and-file federal investigators with a shared interest in “(enforcing) the law and improving the lives of Californians.”
“When we are at our best, we put politics aside,” he said. “We don’t use fraud as a bludgeon, as a cudgel.”
Bonta had taken the podium to tout his own accusations of large-scale fraud against more than 100 people who allegedly benefited from a state-funded home care program, taking money to care for a family member that Medicaid simultaneously paid to care for in a hospital or nursing home.
In-Home Supportive Services, also known as IHSS, is a state program that can help fund the care of low-income disabled children, dependent adults and the elderly, and has been hailed as a way to keep more people in their homes and avoid costly and sometimes dangerous congregate care.
Many of the program’s beneficiaries are relatives, Bonta said.
“Even though the alleged fraud represents only a small fraction of California’s $30 billion IHSS budget, any abuse of Medi-Cal puts funding for our most vulnerable residents at risk,” Bonta said.
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