A sprawling network of “invented” hospice companies in Los Angeles has allegedly siphoned as much as $5 billion from federal coffers, Health and Human Services Secretary Robert F. Kennedy Jr. told lawmakers on Thursday.
During a House Ways and Means Committee hearing, Kennedy detailed a scheme where fraudulent operators recruited healthy individuals from low-income neighborhoods, offering them $600 cash and flat-screen televisions to enroll in end-of-life care they didn’t need.
While the government paid out roughly $6,000 per “patient,” Kennedy noted a glaring anomaly in the data: “The interesting thing is almost none of them ever died.”
The exchange was sparked by Representative Beth Van Duyne (R-TX), who questioned Kennedy about a specific address—14545 Friar Street in Van Nuys, California. Van Duyne claimed the location had been linked to over 100 different hospice licenses.
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She noted that while she had previously pressed former Secretary Xavier Becerra on the matter with little result, the current administration has shifted its approach.
Kennedy reported that the administration has already moved to shut down 500 hospices in the Los Angeles area.
“A lot of these places—like you say—they were just invented addresses,” Kennedy told the committee. He explained that while a typical hospice stay lasts about 18 days, the individuals enrolled in these sham programs “stayed forever” because they were never actually terminally ill.
The crackdown follows the formation of an anti-fraud task force led by Vice President J.D. Vance, which held its inaugural meeting on March 27. To date, the task force has suspended federal funding to nearly 450 suspected facilities.
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According to Kennedy, the fraud was driven by specific “foreign communities,” including certain Estonian and Armenian groups operating in Southern California.
He clarified that while these groups represented a small fraction of the broader, “incredibly great” Armenian community in Los Angeles, the individuals involved were “making hundreds of millions of dollars out of fraud and just stealing money from us.”
The revelations in Los Angeles mirror recent reports of large-scale welfare and daycare fraud in other states. Independent investigations and whistleblower reports have recently flagged similar suspicious activity involving millions in federal funds in Minnesota, Maine, Ohio, and Washington state.
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