California Didn’t Miss the Fraud…It Licensed It, Funded It, and Screamed Racism When Caught

Gavin Newsom appears rattled — again.

One wonders how many smears, scandals, and charges of gross incompetence a single politician can absorb before the facade starts to crack.

This time, the irritant is Dr. Mehmet Oz, a top gun from Washington. He is in Newsom’s backyard (actually a less desirable zip code) uncovering — yet again — another industrial-scale fraud while acting as the powerful administrator of the Centers for Medicare & Medicaid Services.

This is not a man who shows up with a clipboard and a punch-the-clock attitude. He arrives with an army of auditors.

Earning his salary, Dr. Oz identified what he described as one of California’s hotbeds of healthcare fraud. The scene? A four-block radius containing an astonishing 42 hospice operations — a clustering so implausible it might as well have been illuminated by a sign reading: Please Arrest Me. No “Learing Center” typo gave away this criminal scheme. But Dr. Oz did note that the business names suggested ties to the Russian-Armenian mafia — an observation that, while provocative, was hardly the most alarming detail. That was simply the tip of the Titanic-sized iceberg.

There was more. Much more — just a short freeway drive away.

Dr. Oz’s team had barely touched ground when they uncovered a staggering network of fraudulent “healthcare providers” in Los Angeles County. Among the top fraudsters (competition was fierce): “210 hospice agencies crammed into a single square mile, with 112 licenses tied to one unsigned commercial building — many showing no evidence of actual operations.” No staff. No patients. No buzzers. Just licenses multiplying like rabbits.

None of this, however, was about to knock Gov. Newsom off his political perch. Enter the public-relations squad, working to assure hard-working taxpayers the governor was very much on the job. Why, he’d even passed legislation — SB 664, a moratorium on issuing new hospice licenses back in October 2021.

But wait — there’s more! The administration had revoked over 280 hospice licenses and was “reviewing another 300 for possible revocation.” Reviewing. Evaluating. Considering. Strong verbs were clearly hard at work as the bureaucratic squad scrambled to contain yet another public-relations disaster.

Would such assurances muzzle the rising disgust of taxpayers? Apparently not. Facts kept surfacing regarding runaway deceptive schemes, and Dr. Oz kept piling them on.

His team discovered that a moratorium proves ineffective in dismantling an already licensed network of even amateurish scammers. Worse still, it failed to fix the very problem that allowed this financial disaster to materialize in the first place. As investigators bluntly noted, the moratorium “did little to correct the weak oversight that had already allowed hundreds of questionable hospices to get licensed due to insufficient verification.”

Translation: The barn doors were slammed shut long after the horses had applied for licenses and billing codes.

Fraudsters proved remarkably skilled at out-bureaucratizing the bureaucrats. Their playbook was simple — and effective, including: rapidly acquiring and flipping licenses; building shell-company networks through multiple hospice entities before the moratorium; and quietly side-stepping government oversight by transferring ownership of the nonexistent entities to new fake hospice centers.

Where were the state employees paid to conduct oversight?

Perhaps Gov. Newsom — or one of his many well-compensated adjutants — might have followed the example of intrepid reporter Nick Shirley and, like Dr. Oz, actually hit the streets to see what was operating (or conspicuously not operating) right under their noses.

But that would have required initiative.

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