California Man Pleads Guilty to Defrauding Medicare of Nearly $16 Million

A California man has pleaded guilty to defrauding Medicare of nearly $16 million through sham hospice companies and laundering the fraudulent proceeds. Juan Carlos Esparza, 33, of Valley Village, admitting to scheming with others to bill Medicare for hospice services that were not medically necessary and never provided. The defendants operated four sham hospices, one of which was owned by Esparza, and used foreign nationals' personal identifying information to conceal the scheme. Medicare paid the sham hospices nearly $16 million, which was laundered through various assets and accounts.

Key Takeaways:

• Juan Carlos Esparza pleaded guilty to health care fraud and transactional money laundering, facing a maximum penalty of 10 years in prison for each charge.
• The defendants operated four sham hospices, including House of Angels Hospice, which was owned by Esparza.
• They used foreign nationals' personal identifying information to conceal the scheme, including opening bank accounts, submitting information to Medicare, and signing property leases.
• Esparza spent $90,000 in fraudulent proceeds to purchase a vehicle.
• Co-defendant Petros Fichidzhyan was sentenced to 12 years in prison, and co-defendant Mihran Panosyan is scheduled to be sentenced on Sept. 8.
• The guilty plea is part of the Justice Department's ongoing effort to combat hospice fraud in the greater Los Angeles area.
• The FBI and HHS-OIG are investigating the case, with trial attorneys from the Criminal Division's Fraud Section and Assistant U.S. Attorney Tara B. Vavere handling asset forfeiture.

Statistics:

• Medicare paid the sham hospices nearly $16 million.
• The defendants laundered the fraudulent proceeds through various assets and accounts.
• Esparza spent $90,000 in fraudulent proceeds to purchase a vehicle.
• The Health Care Fraud Strike Force Program, led by the Justice Department's Criminal Division, has charged more than 5,800 defendants since March 2007.
• The defendants collectively have billed federal health care programs and private insurers more than $30 billion.
• Co-defendant Petros Fichidzhyan was sentenced to 12 years in prison.

Sources:

• Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department's Criminal Division
• Assistant Director in Charge Akil Davis of the FBI Los Angeles Field Office
• Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG)
• The FBI and HHS-OIG
• Trial Attorneys Sarah E. Edwards, Allison L. McGuire, and Michael Bacharach of the Criminal Division's Fraud Section
• Assistant U.S. Attorney Tara B. Vavere for the Central District of California