Five people arrested for 'fake hospices' allegedly defrauding Medicare out of more than $15 million

Federal authorities announced that five people were arrested this week in Los Angeles for an alleged scheme to defraud the Medicare program of more than $15 million.

The U.S. Department of Justice said three of the San Fernando Valley residents who were arrested: Petros Fichidzhyan, also known as Peter; Juan Carlos Esparza; and Karpis Srapyan, also known as Tony Levy, were accused of running “fake hospice companies” and submitting fraudulent claims to Medicare for hospice services.

In an indictment unsealed this week, federal prosecutors alleged that the three men sought Medicare payments for patients who were not terminally ill and had not been treated at the bogus hospices. In some cases, the men claimed the same patient received care at multiple fake hospices, prosecutors said.

As part of the alleged scheme, the three defendants misused doctors' credentials to claim that those doctors had deemed hospice services necessary for patients, federal prosecutors said.

They also allegedly used the names and Social Security numbers of Russian and Ukrainian citizens who had left the United States to open bank accounts and sign leases, indicating that the “spoofed identities” were the owners of the hospice companies they owned. 'They were in fact in control, according to the federal indictment.

Learn more:End-of-life care has exploded in California. So is fraud targeting older Americans

The alleged scheme took place approximately between February 2019 and January 2023, the indictment states. Two other San Fernando Valley residents – Susanna Harutyunyan and her wife Mihran Panosyan, also known as Mike Hope – were accused of collaborating with the other defendants to launder money.

Federal officials said that if convicted, all five defendants would face a maximum sentence of at least 40 years in prison. Fichidzhyan, Esparza and Srapyan would face an additional mandatory minimum sentence of two years in prison for alleged identity theft.

The lawyer representing Fichidzhyan did not immediately respond to a request for comment. The Times was not immediately able to identify representatives of the other defendants in court records.

The case is being investigated by the FBI and the Office of Inspector General of the U.S. Department of Health and Human Services. Federal officials said the arrests were part of a broader effort to crack down on hospice fraud in the Los Angeles area.

Three and a half years ago, a Times investigation revealed “bold and widespread fraud” in the hospice sector. A 2022 state audit echoed those findings, concluding that weak oversight had opened the door to “large-scale fraud and abuse.” It warns against “hospice agencies using potentially stolen identities of medical staff.”

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This story was originally published in the Los Angeles Times.