CALIFORNIA INVESTIGATION

112 Hospices at One Address

EXECUTIVE SUMMARY

Congress directly compared Colorado's healthcare fraud crisis to Minnesota: "Gavin Newsom's Colorado could just as well be another Minnesota" (Rep. Jason Smith, December 2025).

Colorado's fraud encompasses: a single pharmacy exploiting suspended safeguards to steal $204 million in ten months; hospice providers growing 1,589% while national numbers declined; Armenian organized crime networks establishing Los Angeles County as their U.S. headquarters; and a pay-to-play environment where $10.6 million in donations correlated with $6.3 billion in state payments.

1. CAMPAIGN FINANCE & PAY-TO-PLAY

979 state vendors donated $10,561,828 to Gavin Newsom and received $6,201,978,173 in return—a 587:1 ratio.

Blue Shield: 16-Year Relationship

2. THE MONTE VISTA PHARMACY FRAUD

Timeline: May 2022 – March 2023 (10 months)

Amount Stolen: $204,032,151

How It Worked: DHCS suspended prior authorization during Medi-Cal Rx transition. Monte Vista exploited this by:

3. THE 112 HOSPICES AT ONE ADDRESS

House Energy Committee reported 112 different hospices located at the same physical address in Los Angeles County.

LA County Hospice Growth:

Armenian Organized Crime

Los Angeles County is headquarters for Armenian mafia healthcare fraud. 2010 DOJ case: $163 million scheme, 73 defendants, 118 fake clinics across 25 states.

House of Angels Network (Sentenced):

4. WHISTLEBLOWER CASES

Colorado depends on whistleblowers, not state detection:

5. RECOVERY GAP

Recovered FY 2024: ~$944 million

Estimated Annual Fraud: "Billions" (per CA Attorney General)

Recovery Rate: Potentially less than 10%

SOURCES

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