Last week, CBS News put out a solid report identifying Los Angeles County as “ground zero” for hospice fraud. The numbers really speak for themselves.
Three years ago, California’s state auditor sounded the alarm that Los Angeles County had seen a 1,500% increase in hospice companies since 2010 – more than six times the national average relative to its elderly population.
Auditors estimated LA County hospices overbilled Medicare by $105 million in a single year.
The county went from 109 hospice agencies to 1,841 in just over a decade. Another 2,600 such companies were still applying for licenses in LA County alone. There’s no possible explanation for this other than fraud. CBS News then visited a cluster of these offices and found empty offices and people unwilling to talk.
Today, CBS has a follow up in which it visits one building in Van Nuys that is home to 89 hospice companies.
The building is among the most extreme cases of what’s known as “clustering” to turn up in a sweeping CBS News investigation — a grouping of large numbers of hospice offices that state auditors consider a major red flag for potential fraud.
The Van Nuys address for Merabi Plaza appears dozens of times in state records for licensed hospice companies. Inside the building’s entry hall, a directory lists numerous hospice agencies that line the long tiled hallways, although the building’s owner claims many are no longer there…
Auditors said the clustering of so many firms raised concerns because it suggests that “the number of agencies in these areas likely exceeds the number of patients who need services.”
On a 2nd visit to the building, CBS spoke to the owner who says he rents to anyone who presents as a legitimate business.
On a recent visit to the building, CBS News encountered the building’s owner, Kambiz Merabi. He said officials from Medicare came to his building two years ago specifically looking for hospice agencies, and he allowed them to conduct their inspections…
Merabi said the numbers that appear in government records differ from those on his tenant list. He shows only 12 hospice companies operating in his building. He explained that a number of the agencies had recently moved out of the building, though public records don’t yet reflect that, and hospices are required to notify authorities if they move.
Advocates say the discrepancy raises questions about what they call “ghost hospices.”
California AG Rob Bonta claims it’s no surprise California has the most fraud since it’s the largest state, but that doesn’t really explain why the fraud seems to be concentrated in Los Angeles or why it seems to have accelerated there much faster than anywhere else in the country. Clearly LA has a unique problem and Bonta’s office doesn’t seem to have done much to stop it.
Another interesting story here is the way in which this story had developed in the media. It’s amazing to see a major news outlet like CBS News essentially tag teaming this story with Nick Shirley. Normally, stories in which Democratic AGs are put on the spot and made to look bad don’t seem to get much traction with the national news. In fact, even after last week’s report, no other major national outlet seems to be digging into this. A search for “LA hospice fraud” under Google News turns up some local news reports, the CBS reports and one report from Fox News back in January.
From what I can tell, what really kicked this story off was a video which Dr. Oz, the administrator for Medicare and Medicaid Services, posted on Jan. 27. In the video, he is being driven through LA and points out all of the hospices clustered in a given area. He suggests there are signs of fraud. He specifically said it was being run “by the Russian, Armenian mafia.”
L.A. County has become an epicenter for health care fraud in America. Criminals have corrupted the system so much that fraud is now almost expected. President Trump has made it clear: we will not tolerate the patient harm or taxpayer funded theft any longer. More to come. pic.twitter.com/JOp8ltimq8
— DrOzCMS (@DrOzCMS) January 27, 2026
Gov. Newsom responded to that video by filing a civil rights complaint against Dr. Oz just a day or two later, essentially claiming his mention of the Armenian mafia was racist. You really can’t make this stuff up:
Gov. Gavin Newsom on Thursday filed a civil rights complaint against Dr. Mehmet Oz, the administrator for the Centers for Medicare and Medicaid Services, after Oz posted a video accusing Armenian crime groups of carrying out widespread healthcare fraud in Los Angeles…
In a letter to the Department of Health and Human Services, Newsom called on the agency to investigate “Dr. Oz’s baseless and racist allegations against Armenian Americans in California.”
“Such racially charged and false public statements by anyone involved in administering these critical federal healthcare programs seriously risks chilling participation in those programs by individuals targeted by the statements,” Newsom wrote in the complaint.
I’m sure the Armenian mafia appreciates having the governor protect them from mean Dr. Oz. Honestly, Newsom’s response is enough to make you wonder why he’s so eager to protect them. My guess is he’s just looking for any weapon close at hand to knock down reports about rampant fraud in California. That wouldn’t look good on his resume when he runs for president.
Here’s the latest CBS News report. Again, what’s most striking is that no one else in the national media seems interested in touching this.
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