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Press Release

Organizer of $9 Million Scam Sentenced to 8 Years in Federal Prison in Scheme to Provide Hospice to Patients who were not Terminally Ill

For Immediate Release
U.S. Attorney's Office, Central District of California

          LOS ANGELES – A Placentia woman was sentenced today to 96 months in federal prison related to her operation of a hospice that submitted more than $9 million in fraudulent bills to Medicare and Medi-Cal for purportedly providing end-of-life care to patients who were not actually dying.

          Priscilla Villabroza, 70, was sentenced by United States District Judge S. James Otero, who characterized the defendant’s conduct as “callous” and “despicable.” In addition to the eight-year prison term, Judge Otero ordered the defendant to pay $7,433,329 in restitution.

          Villabroza is one of 10 defendants who were charged in relation to a fraud scheme run out of the Covina-based California Hospice Care, which Villabroza purchased in late 2007 while under investigation in a prior health care fraud case.

          Between March 2009 and June 2013, California Hospice submitted nearly $9 million in fraudulent bills to Medicare and Medi-Cal for hospice-related services, and the public health programs paid nearly $7.5 million.

          “This scheme is one of many that has victimized taxpayers who fund public healthcare programs,” said United States Attorney Eileen M. Decker. “This scheme also victimized patients who were needlessly put into hospice and had changes made to their treatment for non-medical reasons. As this case clearly demonstrates, healthcare fraud is not a victimless crime.”

          All 10 defendants charged in relation to the California Hospice scheme have pleaded guilty to healthcare fraud charges or were convicted at trial. One of the defendants was accepted into a diversion program.

          Following a two-week trial that ended last month, Sri Wijegoonaratna, known as Dr. J., 61, of Anaheim, and Boyao Huang, 43, of Pasadena were found guilty of federal health care fraud charges for falsely certifying that Medicare patients were terminally ill, and therefore qualified for hospice care, when the vast majority of them were not actually dying. Judge Otero is scheduled to sentence defendants Wijegoonaratna and Huang on August 15.

          As part of the California Hospice fraud scheme, Villabroza secretly purchased and managed the company, while representing that her daughter, who was also charged in the case, was the true owner. The scheme involved illegal payments to “marketers” or “cappers” for referrals of Medicare and Medi-Cal beneficiaries, false and fraudulent documentation by nurses and false certifications by doctors that the beneficiaries were terminally ill and therefore entitled to hospice benefits – even though the vast majority of them were not terminally ill. Participants in the scheme also fraudulently altered medical records in response to Medicare audits to make the beneficiaries appear sicker than they were in an attempt to deceive the auditors into believing that the beneficiaries were entitled to benefits.

          In the prior case, Villabroza was convicted for her role in a scheme that defrauded the Medi-Cal program by fraudulently billing for in-home care provided to disabled patients. She was sentenced in that case to 4½ years in federal prison.

          The investigation into California Hospice was conducted by the United States Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; the California Bureau of Medi-Cal Fraud & Elder Abuse; and IRS Criminal Investigation.

          This case is being prosecuted by Assistant United States Attorney Steven Arkow of the Major Frauds Section and Assistant United States Attorney Leon W. Weidman, Special Assistant to the United States Attorney.

Updated April 17, 2023

Press Release Number: 16-138