A jury has found a Glendale woman and a Lakewood man guilty of engaging in an illegal scheme involving kickbacks for patient referrals, resulting in approximately $3.2 million in fraudulent claims to Medicare. The Justice Department announced the verdict against Nita Palma, 75, and Percy Abrams, 74.
Palma was convicted on 12 counts of health care fraud and 16 counts of paying illegal kickbacks for health care referrals. Abrams was found guilty of six counts of receiving illegal kickbacks.
The evidence presented during the trial revealed that Palma had been excluded from Medicare due to previous convictions related to illegal kickbacks. Despite this exclusion, she acquired Magnolia Gardens Hospice through her daughter in 2015 and concealed her ownership from Medicare authorities.
Palma paid marketers, including Abrams, substantial sums for patient referrals that allowed her to bill Medicare for hospice care. Hospice services are intended for terminally ill patients with a life expectancy of six months or less and focus on comfort rather than curing illness.
Abrams misled prospective patients by stating they did not need to be dying to qualify for hospice care. He collected their personal information and sent it to Palma so she could bill Medicare fraudulently.
Between 2015 and 2016, Palma submitted around $3.2 million in false claims through Magnolia Gardens Hospice for patients who were not terminally ill. She received approximately $6,000 monthly per patient billed to Medicare while paying Abrams up to $1,000 per month per referred patient.
Some patients were unaware they were enrolled in hospice until they faced denial of necessary medical coverage under Medicare.
In response to Medicare's request for additional documentation supporting the claims, Palma directed employees at Magnolia Gardens Hospice to create fake patient charts which were then submitted as genuine records.
Court documents also allege that while awaiting trial, Palma took control of three other hospices and caused further fraudulent claims amounting to about $4.8 million.
United States District Judge Dolly M. Gee has scheduled sentencing for April 23, 2025. Both defendants face potential decades-long sentences in federal prison.
The investigation was conducted by the United States Department of Health and Human Services Office of Inspector General alongside the FBI. Assistant United States Attorney Roger A. Hsieh from the Major Frauds Section and Matt Coe-Odess from the General Crimes Section are prosecuting the case.