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Press Release

Owner of Texas chain of hospice companies sentenced for $150 million health care fraud and money laundering scheme

For Immediate Release
U.S. Attorney's Office, Southern District of Texas

BROWNSVILLE, Texas - A corporate executive has been ordered to prison after his conviction related to falsely telling thousands of patients with long-term incurable diseases, such as Alzheimers and dementia, they had less than six months to live and subsequently enrolling them in hospice programs.  

A federal jury in McAllen convicted Rodney Mesquias, 48, San Antonio. The one-month trial in November 2019 was one of the first criminal hospice fraud prosecutions the Department of Justice has presented to a federal jury.   

Today, U.S. District Court Judge Rolando Olvera ordered Mesquias to serve a total of 240 months in federal prison and to pay $120 million in restitution.

“Financial healthcare fraud is abhorrent enough, but to fraudulently diagnose patients with dementia or Alzheimer’s is the pinnacle of medical cruelness to both the patient and their family,” said U.S. Attorney Ryan K. Patrick of the Southern District of Texas. “They falsely gave patients life ending diagnosis and they will pay the price with years behinds bars.”

“Mesquias funded his lavish lifestyle by exploiting patients with long-term, incurable diseases by enrolling them in expensive but unnecessary hospice services,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “This significant sentence represents the department’s continued commitment to pursue those who orchestrate and commit healthcare fraud schemes.”

Mesquias and his co-conspirator Henry McInnis, 48, were both convicted of one count each of conspiracy to commit health care fraud, conspiracy to commit money laundering and conspiracy to obstruct justice as well as six counts of health care fraud. Mesquias was separately convicted on one count of conspiracy to pay and receive kickbacks. 

From 2009 to 2018, Mesquias and McInnis engaged in a scheme that involved $150 million in false and fraudulent claims for hospice and other health care services. Mesquias owned and controlled the Merida Group, a large health care company that operated dozens of locations throughout Texas. McInnis was Merida Group’s CEO. 

“Families seek to give comfort and support to their ailing loved ones when all other medical options are gone,” said Special Agent in Charge Christopher Combs, FBI San Antonio Division. “It is unconscionable and evil to prey upon the most vulnerable in our community to commit fraud against government-funded programs. The FBI is committed to protecting our communities from those who may not have the strength to protect themselves.”

“Mesquias’ scheme included paying kickbacks to physicians and fraudulently enrolling vulnerable beneficiaries in hospice care that prevented them from accessing curative care -- all done to steal millions of dollars from Medicare to fund lavish personal spending,” said Special Agent in Charge Miranda L. Bennett, Department of Health and Human Services Office of Inspector General’s (DHHS-OIG) Dallas Region. “This victimization is intolerable, and our investigators and law enforcement partners will continue to work hard to bring such criminals to justice and to protect those relying on federal health care programs.”

According to evidence presented at trial, the Merida Group, Mesquias and McInnis adopted a strategy to market their hospice programs as providing medical benefits “you don’t have to die to use.” They also aggressively enrolled patients with long-term incurable diseases, such as Alzheimers and dementia, and limited mental capacity who lived at group homes, nursing homes and in housing projects.

In some instances, Merida Group marketers falsely told patients they had less than six months to live and sent chaplains to lie to the patients. They also discussed last rites and preparation for their imminent death.

Hospice services require patients to be suffering from a terminal illness expected to result in death within six months. Not only were patients not in such circumstances, they were walking, driving, working and even coaching athletic sporting events in some instances. However, Mesquias, McInnis and others kept patients on services for multiple years in order to increase revenue.

Placing patients on such palliative hospice care meant they were unable to obtain medical coverage for curative medical services. 

Mesquias also fired employees who refused to go along with the fraud. He often  directed them not to “[expletive] with his patients or [expletive] with his money” by discharging patients from services. One co-conspirator said with respect to hospice patients “the way you make money is by keeping them alive as long as possible.” This included engaging in surgical and other medical interventions that were designed to extend life through the use of medical technologies, according to trial testimony.

The evidence further established Mesquias and McInnis obstructed justice by causing the creation of false and fictitious medical records. Further, they produced them to a federal grand jury in order to attempt to avoid indictment.  The records added false diagnostic information, making it appear that patients were dying when, in fact, they were not.

Mesquias and McInnis also were convicted in connection with laundering the proceeds of the fraud. The jury found they used monies to purchase expensive vehicles such as a Porsche, expensive jewelry, luxury clothing from high-end retailers such as Louis Vuitton, exclusive real estate, season tickets for premium sporting events and a security detail and bottle service at high-end Las Vegas nightclubs. Mesquias and McInnis also treated physicians to lavish parties at these elite nightclubs, providing them with tens of thousands of dollars in alcohol and other perks in exchange for medically unnecessary patient referrals.

McInnis will be sentenced at a later date. Two other co-conspirators have pleaded guilty and are awaiting sentencing.

DHHS-OIG, FBI and Texas Health and Human Services Commission conducted the investigation. Assistant U.S. Attorney Andrew Swartz of the Southern District of Texas and  Assistant Chief Jacob Foster and Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section re prosecuting the case.

The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, DHHS Centers for Medicare & Medicaid Services, working in conjunction with the DHHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at

Updated December 16, 2020

Health Care Fraud