A Los Angeles man pleaded guilty on Monday to laundering more than $4.6 million in connection with a Medicare hospice fraud scheme, the Department of Justice (DOJ) said in a statement.
Prosecutors said Mihran Panosyan, 46, of Winnetka, used the funds to purchase real estate and pay for his child’s private school and other personal expenses.
He is scheduled to be sentenced on Sept. 8 and faces up to 20 years in prison.
Panoysan allegedly worked with four others to launder nearly $16 million as part of the scheme.
Three of his co-defendants allegedly used the identities of foreign nationals no longer in the United States to operate several fake hospice companies, the DOJ said in a statement.
Medicare paid the shell companies nearly $16 million after his co-defendants allegedly submitted false claims for hospice services for “patients who were not terminally ill and who never requested nor received hospice services,” according to the DOJ.
Panosyan and his co-defendants allegedly used fake identification documents, bank accounts, checkbooks, and credit and debit cards in the names of the foreign owners.
Panosyan transferred the money into bank accounts under the names of the purported foreign owners, the sham hospices, and other shell companies, laundering more than $4.6 million in fraudulently obtained funds, the DOJ said.
His attorneys could not be reached for comment.
One of Panoysan’s co-codefendants, Petros Fichidzhyan, was sentenced to 12 years in prison after he pleaded guilty to health care fraud, aggravated identity theft, and money laundering last month.
The trial against the other three defendants is set to begin on July 29, the DOJ said.
Surge in Hospice Fraud
Los Angeles has seen a significant increase in hospice Medicare fraud since 2010.
According to a 2022 California State Auditor report, the county has had an explosive and disproportionate growth in hospice agencies in relation to its aged population.
Hospice agencies in the county increased by more than 1,589 percent between 2010 and 2021, increasing from 109 to 1,841 agencies.
The aging population increased by only 40 percent, with 1 million to 1.4 million during that time.
According to the report, there are about 1,600 aged persons per hospice agency in Los Angeles County.
The report also found that hospice agencies in Los Angeles overbilled Medicare by an estimated $105 million in 2019 alone.
Between January 2019 to August 2021, Public Health received more than 3,500 license applications for new hospice agencies in California, more than double over the past 18 years. About 75 percent of those applications were for locations in Los Angeles County.
The report found that Los Angeles had suspicious circumstances leading report investigators to believe there could be rampant hospice fraud and abuse in the medical and Medicaid system.
Indicators of fraudulent hospice agencies included high numbers of hospice agencies clustered in specific locations.
The county also had higher-than-normal rates of live discharges or long durations of hospice care, when compared to the rest of the state and country.
To qualify for Medicaid or medical in California, a doctor must determine that the patient has less than six months to live, or otherwise be terminally ill. The unusually high rate of live discharge could mean that those admitted didn’t have a terminal illness or didn’t otherwise qualify for hospice care, investigators said in the audit.