Investigation Reveals Massive Fraud in California Daycare and Hospice Services
Journalist Nick Shirley has uncovered allegations of over $170 million in fraud relating to daycare and hospice services in California, which surpasses a previous scandal he reported in Minnesota.
On Monday, Shirley released a 40-minute video that documents his team’s encounters with suspected fraudsters reportedly living extravagant lifestyles funded by taxpayer money. He describes the situation as alarming, stating, “It’s like someone took over a motel building and turned it into 100 fraud rings.”
In a statement accompanying the video, he emphasized the gravity of the issue: “We all work too hard and pay too much tax for something like this to happen. These fraudsters have been operating without any significant opposition for years. It’s time to expose this and tackle America’s fraud crisis.” He notes that Medi-Cal, which is California’s equivalent of Medicare, is projected to increase from $108 billion in the fiscal year 2022 to about $222 billion by 2026.
“In Los Angeles, one in every ten dollars spent on home health care goes to this system,” Shirley pointed out. “The estimated fraud losses in California could reach hundreds of billions.” His team visited several daycare facilities, including residential homes, but found them mostly empty. At one particular daycare located in an apartment complex, they found only two children playing outside, with no adults present.
Shirley also highlighted that California has allocated $6 billion to over 39,000 childcare facilities across the state. In addition, he documented visits to a hospice center that had allegedly received millions in taxpayer funding. He revealed that two facilities billed around $6,000 for each beneficiary.
As Shirley continued his investigation, he learned of 15 more hospice centers in the same plaza, some of which may not even be registered with the Centers for Medicare and Medicaid Services, raising red flags about their legitimacy. “There are rumors suggesting ties to an Armenian-Russian gang,” he mentioned.
In a chilling finding, one hospice he visited had reportedly received around $1.3 million but was notably empty—lacking both staff and furniture. A source on his team commented, “These are not just shell companies; they are also shell buildings.” Additionally, extravagant vehicles including Mercedes and Teslas were spotted in the parking lot.
Shirley explained that fraudulent hospices manage to siphon taxpayer dollars by obtaining Medicare beneficiary numbers from individuals and enrolling them in care plans without their knowledge. He summarized this tactic as “welfare maximization,” observing that many businesses involved here seem to operate without any discernible signs of legitimacy.
