Source: Office of United States Attorneys
LOS ANGELES – A Glendale woman was sentenced today to 108 months in federal prison for participating in a scheme in which hundreds of thousands of dollars in illegal kickbacks were paid and received for patient referrals that resulted in the submission of approximately $10.6 million in fraudulent claims to Medicare for purported hospice care.
Nita Almuete Paddit Palma, 75, of Glendale, was sentenced by United States District Judge Dolly M. Gee, who also ordered her to pay $8,270,032 in restitution.
At a separate hearing today, Judge Gee sentenced Percy Dean Abrams, 75, of Lakewood, to three years of probation, which will include two years of home confinement.
At the conclusion of a six-day trial, a federal jury in December 2024 found Palma guilty of 12 counts of health care fraud and 16 counts of paying illegal kickbacks for health care referrals. The jury also found Abrams guilty of six counts of receiving illegal kickbacks for health care referrals.
Palma was excluded from Medicare, a federal health insurance program for people aged 65 and older, because of prior federal convictions for receiving illegal kickbacks. While she was excluded from Medicare, Palma purchased Magnolia Gardens Hospice through her daughter and bought C@A Hospice through her husband in 2015 and concealed her ownership interest in both hospices from Medicare.
Palma then paid “marketers”, including Abrams, hundreds of thousands of dollars in illegal kickbacks for patient referrals that Palma could bill to Medicare for purported hospice care.
Hospice is only for those who are terminally ill and have a life expectancy of six months or less. Hospice provides comfort care to a patient instead of trying to cure the patient’s illness, and a patient forfeits certain benefits under Medicare when electing hospice.
Consistent with instructions provided by Palma, Abrams falsely represented to prospective patients that they did not need to be dying to be on hospice. After collecting personal identifying information from prospective patients that were not dying, Abrams sent the information to Nita Palma so she could bill Medicare for purported hospice care.
Through Magnolia Gardens Hospice and C@A Hospice, Palma caused the submission of approximately $10.6 million in fraudulent claims to Medicare beginning in 2015 for purported hospice care for patients that were not dying. Palma received approximately $6,000 each month a patient was billed to Medicare for hospice. In turn, Palma paid Abrams and other marketers up to $1,000 per month in illegal kickbacks for each patient referred to her that was billed to Medicare for hospice. Many of the patients that were billed to Medicare through Magnolia Gardens Hospice did not know they were signed up for hospice, and some patients only found out after they were denied medical coverage for services they needed.
During the health care fraud scheme, Medicare requested additional documentation from Magnolia Gardens Hospice to support the purported hospice claims. In response, Palma and her husband directed employees to create fake patient charts and had those fake patient charts submitted to Medicare. Court documents allege that while awaiting trial in this matter, Palma took control of three other hospices and caused the submission of approximately $4.8 million in claims for purported hospice care.
The United States Department of Health and Human Services Office of Inspector General and the FBI investigated this matter.
Assistant United States Attorney Roger A. Hsieh of the Major Frauds Section and Matt Coe-Odess of the Domestic Security and Immigration Crimes Section prosecuted this case.