Two California-based individuals were recently sentenced to prison for their alleged involvement in a nearly $16 million hospice fraud and money laundering case.

Juan Carlos Esparza, 33, and Susanna Harutyunyan, 39, were two of the five “foreign nationals” who allegedly operated four sham hospice companies in California, according to the U.S. Department of Justice (DOJ). The hospice operators are accused of submitting false Medicare claims for services that were either never provided or medically unnecessary.

Esparza was previously charged with conspiracy to commit health care fraud and aggravated identity theft. He pleaded guilty to health care fraud and money laundering and was sentenced to 57 months in prison. Harutyunyan also pleaded guilty to money laundering and received a prison sentence of 15 months. Esparza and Harutyunyan were each ordered to pay restitution that totalled a combined nearly $4.65 million.

“As part of the money laundering scheme, the defendants maintained fraudulent identification documents and other documents associated with the sham hospices, as well as bank documents, checkbooks and credit and debit cards in the names of purported foreign owners,” the DOJ said in a statement. “After defrauding Medicare, the defendants moved the funds between various assets and accounts, including bank accounts in the names of shell companies, to conceal the scheme.”

The FBI and U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) investigated the case, which is being prosecuted by the Justice Department’s criminal division.

The Justice Department accused the five individuals of spending the money on real estate, vehicles and other goods and services. All of the defendants were arrested in 2024 and were charged with conspiracy to launder money and money laundering.

Esparza and Harutyunyan are the most recent defendants to receive sentencing in the fraud scheme. Esparza, along with Petros Fichidzhyan and Karpis Srapyan, allegedly operated the four hospice companies. The defendants allegedly submitted false Medicare claims from July 2019 until January 2023 through the sham hospices. One of the companies, House of Angels Hospice, was owned by Esparza.

Fichidzhyan, Esparza and Srapyan allegedly concealed the scheme by using foreign nationals’ names and personally identifiable information to act as “straw owners” for the hospices and to open bank accounts, submit information to Medicare and sign property leases, according to the Justice Department.

Also allegedly involved in the fraud scheme was Mihran Panosyan, who pleaded guilty to money laundering. Panosyan has been ordered to pay restitution of nearly $4.7 million and received a 57-month prison sentence.

Fichidzhyan in May pleaded guilty to health care fraud and was sentenced to serve 12 months in prison. He was ordered to pay more than $17.12 million in restitution. Srapyan in July also pleaded guilty to conspiracy to commit money laundering and health care fraud. In addition to the recent federally court-ordered prison sentence, Srapyan was also ordered to pay $3.2 million in restitution to Medicare.