Two individuals involved in a $10.6 million fraudulent Medicare hospice billing scheme have received sentences, with one facing imprisonment.

Nita Almuete Paddit Palma, owner of the California-based companies Magnolia Gardens Hospice and C@A Hospice, was sentenced on Wednesday to 108 months in federal prison. Palma in 2024 was convicted and found guilty of 12 counts of health care fraud, as well as 16 counts of illegal kickbacks. She was ordered to pay upwards of $8.27 million in restitution.

Palma paid marketers hundreds of thousands of dollars for illegal health care referrals. Among the marketers was Percy Dean Abram, who was sentenced to three years of probation, including two years of home confinement. Abram was found guilty of six counts of receiving kickbacks for health care referrals, with Palma paying him $6,000 for each month that yielded patient referrals, according to the U.S. Department of Justice (DOJ).

“Consistent with instructions provided by Palma, Abrams falsely represented to prospective patients that they did not need to be dying to be on hospice,” the DOJ stated in an announcement. “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.”

Palma purchased Magnolia Gardens Hospice through her daughter and she also bought C@A Hospice through her husband in 2015. Several patients enrolled by Magnolia Gardens Hospice were not eligible, and some individuals were not aware that they had been placed in hospice. Palma concealed her ownership of both hospices from Medicare, according to the Justice Department.

Palma had previously been banned from the Medicare program due to earlier involvement in other kickback schemes. Court documents allege that while awaiting trial in this matter, she took ownership of three other hospices, through which approximately $4.8 million in false hospice claims were submitted.

All told, the hospice fraud scheme has resulted in roughly $10.6 million in false claims since 2015.

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) and the FBI investigated this matter. Assistant U.S. Attorney Roger Hsieh of the Major Frauds Section and Matt Coe-Odess of the Domestic Security and Immigration Crimes Section served as prosecutors for the case.