Federal Hospice Fraud Charges

Welcome to Spodek Law Group. Our goal is to give you the reality of federal hospice fraud prosecution - not the sanitized version law firm websites present, not the press release fiction the DOJ publishes, but the actual truth about what happens when you become a target. If you're reading this at 11pm because something happened today, because agents showed up or a letter arrived or someone called asking questions, then you need to understand something before you do anything else: the investigation into your hospice operation probably started months or years ago, and by the time they contacted you, they've already made decisions about your future.

That sounds harsh. It is harsh. But here is what most people in your situation do not understand until it is too late: hospice fraud charges do not require proof that you harmed anyone. You can be convicted for billing services that were actually provided to real patients who received real care - if the government decides those patients weren't "terminal enough" when you certified them. That certification - the physician's statement that a patient has six months or less to live if the disease runs its normal course - is the foundation of every single hospice fraud prosecution. And here's the part nobody tells you: CMS has never created clinical benchmarks defining what "terminal" actually means. There is no checklist, no threshold, no bright line. Your medical judgment becomes criminal liability evaluated years later by prosecutors who never examined a patient.

This is the hidden machinery of hospice fraud prosecution. The system treats your certification decision - a subjective clinical judgment made in real time about a living, breathing human being - as either correct or criminal, with nothing in between. And the outcome often depends less on what you actually did than on how your documentation reads to someone reviewing it five years later in an air-conditioned government office.

What Prosecutors Actually Look For

Here is the thing that catches people off guard. When federal prosecutors build hospice fraud cases, they do not start by asking "were patients harmed?" They start by asking "were certifications accurate?" These are completly different questions, and the difference will determine wheather you spend the next decade in federal prison or not.

The central allegation in nearly every hospice fraud prosecution is this: patients were admitted or retained who did not qualify for the Medicare hospice benefit because they were not terminaly ill. Notice what is missing from that sentence. No mention of patient harm. No mention of services not being provided. The entire criminal theory rests on the certification - whether the physician's prognostic judgment was "correct" according to prosecutors reviewing it years later.

Think about that. Let that sink in. A doctor sees a patient with advanced heart failure, reviews their history, examines them, and makes a clinical judgment that their life expectancy is six months or less if the disease progresses normaly. The patient receives hospice care. They're comfortable. Their family is supported. The care is real. But eighteen months later, the patient is still alive. To a family, thats a blessing. To a prosecutor, thats evidence of fraud.

Rodney Mesquias received twenty years in federal prison. Petros Fichidzhyan got twelve years. Shiva Akula got twenty years. These were not people who ran billing mills or filed claims for phantom patients. They operated hospices that provided services to real people. The crime was certification - signing off on patients who prosecutors later argued should never have qualified.

OK so what exactly are prosecutors looking for? The DOJ focuses on patterns, not individual cases. Medicare data analytics flag statistical outliers. If your hospice has patients who consistantly live longer then national averages, if your average length of stay exceeds industry norms, if your live discharge rate seems suspicous - these metrics trigger scrutiny. And once the scrutiny begins, every certification decision you ever made becomes potential evidence.

How the Investigation Started Before You Knew

Here is were it gets uncomfortable. If you are reading this because something just happened - agents at your door, a subpoena in the mail, a call from someone asking questions - I need you to understand something critical: the investigation into your operation probably began a year or more ago, and it almost certainly started with someone you know.

Eighty-six percent of False Claims Act settlements come from qui tam lawsuits. Qui tam. Latin for "he who sues." Translation: whistleblower. Under the False Claims Act, anyone with knowledge of fraud against a government program can file a lawsuit on the government's behalf. If the government recovers money, the whistleblower gets between fifteen and thirty percent of the total. On a ten million dollar settlement, that's potentially three million dollars - a life-changing payout for a former employee with a grudge or a conscience.

The whistleblower suit gets filed "under seal," meaning it is secret. The government has sixty days to investigate - but they routinely extend this to years. During this time, while you are operating normally, building your census, providing care, living your life, federal agents are interviewing your current and former employees. They are pulling your Medicare billing records. They are analyzing your certification patterns. They are comparing your data to every other hospice in the country.

And heres the kicker: someone on your staff might be cooperating. The person who handles your billing. The nurse who complained about admissions criteria last year. The marketer who left for a competitor. Anyone with inside knowledge. By the time you know there is an investigation, the government may have already deposed witnesses, obtained documents, and made preliminary determinations about whether your conduct was civil or criminal.

Todd Spodek always tells clients in healthcare fraud cases: assume you're already behind. Assume the government knows more than you think. And assume that the conversations you had with employees about "borderline" patients are already in their files.

The Six-Month Prognosis Problem

Here is the fundamental absurdity at the heart of hospice fraud prosecution. Physicians must certify that a patient has a life expectancy of six months or less if the terminal illness runs its normal course. This certification is required under 42 CFR 418.22. It is the eligibilty requirement. Without it, Medicare does not pay.

But here is what CMS has never done: create clinical benchmarks defining when someone qualifies as terminaly ill. No point system. No checklist. No objective criteria. The regulation says certification is "based on the physician's or medical director's clinical judgment regarding the normal course of the individual's illness." Clinical judgment. Subjective assessment. An educated guess about when a human being will die.

Medicine cannot predict death with precision. It is not possible. Patients with terminal diagnoses sometimes rally. Diseases do not follow textbook timelines. Good hospice care sometimes extends life. And yet prosecutors treat these certifications as if they were either true or false, with nothing in between - and they make that determination years after the fact, with the benefit of knowing exactly how long each patient actualy lived.

Dr. Victor Contreras, a physician in Ventura County California, was sentenced to twenty-four months in federal prison. His crime? Signing hospice certifications. The government argued his certifications were false - that patients were not terminal when he certified them. But nobody provided him with objective criteria for what "terminal" means. He used his clinical judgment. That judgment became criminal liability.

This is the system revelation nobody talks about: physicians are being sent to prison for making prognostic determinations that CMS refuses to define. The agency that requires the certification will not tell you how to make it correctly. But the prosecutors who come later will definately tell you that you made it wrong.

Sentences That Will Stop Your Heart

Let me be direct about what you are facing. Federal hospice fraud carries a maximum penalty of ten years in prison per count of healthcare fraud. If the fraud resulted in serious bodily injury, thats twenty years. If a patient died, it is life. Life in federal prison for a certification decision.

And these are not theoretical maximums that never get imposed. Look at the actual sentences from recent cases:

Rodney Mesquias: 20 years federal prison. His co-defendant Henry McInnis: 15 years. Petros Fichidzhyan: 12 years plus $17 million restitution. Shiva Akula: 20 years. Kristal Glover-Wing: 6 years. The Canon Healthcare owner: 20 years plus $42 million in penalties.

In early 2025, Jeffrey King was sentenced to 14 years for running what prosecutors called the largest healthcare fraud in DOJ history - a $1.2 billion scheme involving hospice and wound care. His wife Paulette pleaded guilty separately.

Sentences in hospice fraud cases are driven by "loss amount" under the federal sentencing guidelines. The more Medicare paid on allegedly false claims, the higher your sentencing range. A $2 million fraud gives you a very different starting point then a $20 million fraud. And prosecutors add enhancements: abuse of position of trust, number of victims, sophisticated means. Each enhancement pushes the guideline range higher.

Federal prison is not like state prison. There is no parole. You serve at least 85% of your sentence. A twelve-year sentence means at least ten years before you are eligible for release. And when you get out, your life is permanantly altered. Federal conviction means mandatory exclusion from Medicare, Medicaid, and all federal healthcare programs. Your medical license - if you have one - is probably gone. Your ability to work in healthcare anywhere, in any capacity, is finished.

Notice the pattern? The government does not need to prove patient harm. They need to prove improper certification. And the sentences do not scale to harm caused - they scale to dollar amounts billed.

Why Talking to Investigators Destroys Your Defense

Read that again. This is the section that will determine whether you spend the next decade in prison or not.

When federal agents contact someone under investigation - whether by phone call, showing up at your office, or sending a formal interview request - most people's instinct is to explain. To clarify. To help the investigators understand that whatever they think happened, there is actually a reasonable explanation. This instinct will destroy your defense.

Here is the reality: those agents already have your Medicare billing data. They have probly interviewed your employees. They may have documents from a whistleblower. They did not contact you to learn new information - they contacted you to get you on record making statements they can use against you later.

Every word you say to a federal agent, in any context, can be used in prosecution. There is no "off the record" conversation with the FBI. There is no casual chat that stays casual. If you tell an agent "we sometimes admitted patients who were borderline" or "the certifications were not always perfect" or "our marketers got aggressive" - those statements become government exhibits at trial.

Even worse: lying to a federal agent is a separate federal crime under 18 USC 1001. If you misremember a date, get a detail wrong, or say something that contradicts a document they already have, you can be charged with making false statements - even if they never charge you with the underlying fraud.

At Spodek Law Group, we have seen cases where the client's statements to investigators became the core of the prosecution. Cases that might have been defensible on the merits became unwinnable because the defendant talked. Every experienced federal defense lawyer will tell you the same thing: do not speak to investigators without counsel present, no matter how innocent you believe yourself to be.

The Consequence Cascade Nobody Explains

OK so lets talk about what actualy happens when the government comes after a hospice operation. It is not just prison. It is a cascade of consequences that destroys everything you have built, even if you never spend a day behind bars.

Here is how it typicaly unfolds:

Stage 1: The qui tam lawsuit is filed under seal. You do not know it exists. The government investigates for one to three years while you continue operating.

Stage 2: The government decides to intervene. This triggers one of two things: a Civil Investigative Demand (CID) or a search warrant. CID is civil - they want documents, interrogatory answers, possibly testimony. Search warrant is criminal - agents show up at dawn with badges and boxes.

Stage 3: Parallel proceedings begin. This is were the government's strategic advantage becomes overwhelming. They pursue civil False Claims Act liability AND criminal healthcare fraud simultaneously. The civil case uses "preponderance of evidence" standard - more likely than not. Criminal requires "beyond reasonable doubt." But documents produced in the civil case can be reviewed by criminal prosecutors. Your cooperation in one track creates exposure in the other.

Stage 4: Settlement pressure intensifies. The civil case threatens treble damages - three times the amount of Medicare payments plus $11,000+ per false claim. A hospice that billed $5 million could face $20-30 million in civil liability. Many defendants settle the civil case to stop the bleeding - and sometimes those settlements include criminal guilty pleas.

Stage 5: If criminal charges proceed, conviction triggers mandatory exclusion from Medicare. Even if you avoid prison through a plea deal, exclusion ends your healthcare career. You cannot own, operate, manage, or work for any entity that bills federal healthcare programs. It is permanent.

Restitution follows. You'll be ordered to pay back everything the government claims was improperly billed - often millions of dollars. This debt survives bankruptcy. It follows you forever.

And thats assuming you survive the investigation itself. Most hospices cannot operate while under active federal investigation. Referral sources dry up. Staff leaves. Patients get transferred. By the time the case resolves, there is often nothing left.

What to Do If Your Already Under Investigation

If you are reading this because something already happened - agents contacted you, you received a subpoena or CID, you learned about a qui tam suit, you got a target letter - then every hour matters. Here is what you need to understand about where you stand.

First: do not talk to anyone about the investigation except your attorney. This includes employees, business partners, family members, and especialy anyone who might be cooperating with the government. Attorney-client privilege is the only protection that absolutely cannot be broken. Everything else can be compelled.

Second: understand the timeline. If the government sent a CID, they're still in civil investigation mode. This does not mean criminal charges will not come - it means they have not charged you yet. This window is critical. An experienced federal defense attorney can sometimes persuade the government that errors, if they exist, were not intentional or willful. The difference between civil settlement and criminal prosecution often comes down to what happens in this window.

Third: preserve documents, but do not destroy anything. Document destruction during a federal investigation is obstruction of justice - a separate felony. Even if documents hurt you, destroying them will hurt you more.

Fourth: expect this to take years, not months. Federal investigations move slowly. The uncertainty is brutal. But the government's timeline creates opportunity for defense counsel to negotiate, to challenge their theories, to present evidence they might not have considered.

Fifth: call someone who handles federal healthcare fraud. This is not a general practice area. Federal hospice fraud defense requires specific experience with DOJ's healthcare fraud unit, with the False Claims Act, with Medicare regulations, with federal sentencing guidelines. Todd Spodek and the team at Spodek Law Group have defended hospice owners, medical directors, administrators, and staff against federal allegations. We understand how these cases are built, how they're charged, and how they can be fought.

The government has been building their case for years. They had investigators, auditors, data analysts, and cooperating witnesses. They have the resources of the DOJ, the OIG, and the FBI. You need experienced federal defense counsel who can match that preparation, challenge their assumptions, and fight for the outcome you deserve.

That window between first contact and formal charges - thats were federal cases are won or lost. It is were plea negotiations happen, were cooperating agreements get structured, were the government's theory can be challenged before it hardens into an indictment.

Do not waste that window explaining yourself to agents. Do not waste it hoping this goes away. And do not waste it with counsel who does not understand the specific world of federal healthcare fraud prosecution.

The next forty-eight hours determine the next twenty years. Use them wisely.

Every case is different. Every investigation has its own trajectory. But the fundamentals remain: the government has resources, investigators, and time on their side. What you have is the ability to respond strategically, to engage counsel who understands this specific arena, and to fight for an outcome that preserves as much of your future as possible. The prosecution machine is powerful but not infallible. Cases get resolved favorably when defendants stop talking to investigators, engage experienced counsel early, and mount aggressive challenges to the government's theories.

Call Spodek Law Group at 212-300-5196. We understand what you are facing. And we know how to fight it.