Federal Investigators Uncover Multi Billion Dollar Medicare Fraud Ring Exploiting Physician Credentials in Los Angeles County

Federal investigators probe a $600 million Medicare fraud scheme in Los Angeles involving stolen provider numbers and a network of sham hospice companies.

By: AXL Media

Published: Mar 13, 2026, 5:24 AM EDT

Source: Information for this report was sourced from Fox News

The Mechanics of Professional Identity Theft

Federal records have exposed a sophisticated operation in Los Angeles where multiple home healthcare agencies allegedly misappropriated the credentials of Dr. Gilbert Faustina to facilitate a large scale billing scheme. Investigators found that while the 87-year-old physician reported receiving a modest $3,000 monthly stipend for part-time chart reviews, his unique ten-digit National Provider Identifier (NPI) was used to bill Medicare for over 29,000 patients. Between 2021 and 2024, the volume of claims associated with his number surged by 124 percent, with nearly $210 million billed in the last year alone. Faustina has denied any knowledge of the high-volume billing, suggesting that criminal actors utilized his professional standing to bypass standard verification protocols.

Exploitation of the Hospice Shell Game

The investigation highlights a "shell game" strategy employed by fraudulent providers to evade federal oversight and mandatory audits. By operating dozens of separate agencies out of single addresses, often appearing as nothing more than mail drops or empty storefronts, bad actors can keep individual patient counts low enough to avoid triggering automatic Medicare scrutiny. National experts, including Dr. Ira Byock, indicate that this fragmented structure is a deliberate tactic to remain "under the radar" of the Centers for Medicare and Medicaid Services (CMS). In some instances, a single building in Van Nuys was found to house over 100 registered hospice or home healthcare agencies, despite showing no signs of medical staff or actual patient care.

Geographic Concentration and Systemic Vulnerabilities

Los Angeles County has emerged as a disproportionate hub for healthcare billing anomalies, currently accounting for 18 percent of all home healthcare billing in the United States. Administrator Mehmet Oz, head of CMS, has publicly questioned the statistical impossibility of a single county maintaining 1,923 hospice providers, a figure that exceeds the totals of 36 states combined. This dense concentration of providers provides a fertile environment for "patient shuffling," where individuals are moved between various licenses to refresh billing cycles or escape detection during state level audits. The sheer volume of providers makes it nearly impossible for federal inspectors to conduct effective on-sit...