Mihran Panosyan of Winnetka, California, has pleaded guilty for his alleged involvement in a money laundering scheme that bilked Medicare of nearly $16 million. 

Panosyan entered a guilty plea on Monday to charges of Medicare billing fraud and laundering more than $4.6 million through sham hospice companies, according to an announcement from the U.S. Department of Justice (DOJ).

The years-long scheme included fraudulent spending of Medicare funds on various personal expenses including real estate and private school education costs for Panosyan’s child, the DOJ alleged.

“Panosyan worked with others to launder the proceeds of a massive Medicare fraud scheme, transferring the fraudulently obtained funds between multiple accounts before spending them,” the Justice Department stated in the announcement.”

Panosyan faces a maximum penalty of 20 years of imprisonment. Sentencing by a federal district court judge is scheduled for September 8, 2025.

The FBI and the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) investigated the case, which was prosecuted by the Justice Department’s criminal division. The U.S. Attorney’s Office for the Central District of California is handling asset forfeiture.

Panosyan was one of five people arrested in connection with the hospice fraud case last year.

Co-defendant Petros Fichidzhyan previously pleaded guilty to health care fraud, aggravated identity theft and money laundering. He admitted to wrongfully obtaining more than $1 million through fraudulent claims made using an unnamed physician’s Medicare license. Fichidzhyan allegedly funneled these funds into his home health care agency and attempted to cover up the scheme by paying the physician $11,000. He was sentenced to 12 years in prison in May.

A trial determining the other three defendants’ culpability in this case is scheduled to begin July 29. The case has three main components.

First, allegations include impersonating the identities of foreign nationals to use as the purported owners of the hospice businesses. Panosyan and his co-defendants created fraudulent identification documents, bank accounts, checkbooks, and credit and debit cards in the names of purported foreign owners, according to the DOJ announcement.

Second, the individuals allegedly submitted almost $16 million in false and fraudulent claims to Medicare for hospice services that were never requested or received by patients, many of whom were not terminally ill.

Third, the individuals are accused of laundering the businesses’ proceeds to conceal the real funding source including transferring money into accounts of “sham hospices” and other shell corporations, the DOJ announcement stated.

The case is among the most recent regulatory efforts to crack down on rising cases of fraud, waste and abuse, particularly in four hotbed states of California, Arizona, Nevada and Texas. These states have seen swarms of new hospices emerging in recent years and receiving federal payments. Multiple reports of unethical or illegal practices have surfaced, particularly among these new companies.

Regulators have ramped up efforts to curb fraud. Earlier this month the U.S. Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz has issued a public announcement warning against the most common tactics being employed by fraudulent hospice operators.

With greater fraudulent activity has come increased regulatory scrutiny and rising risk of criminal charges, particularly for violations of the False Claims Act (FCA). Though the vast majority of FCA cases do not result in criminal charges, some fraud cases have had hospice owners facing lengthy prison sentences and heavy financial repercussions. In some instances, hospices’ Medicare certification have been revoked, while others have been barred from practicing in the industry.

The hospice fraud cases that surfaced in California last year alone included charges resulting in civil action lawsuits, revocation of Medicare billing privileges and prison sentences. In one instance, a California-based hospice physician fled after pleading guilty in a nearly $30 million kickback fraud scheme.