LOS ANGELES — The U.S. Department of Justice on Thursday announced what they called a major health care fraud takedown throughout Southern California, which included the arrest of doctors and nurses.

First Assistant U.S. Attorney Bill Essayli was joined during a press conference by several law enforcement agencies including the FBI, and Dr. Mehmet Oz, head of the Centers for Medicare and Medicaid Services.

They said they served a series of search and arrest warrants throughout the region, from Covina to Lakewood in Los Angeles County. Eight people were arrested and more than a dozen are being charged for suspected health fraud.

They also mentioned fraudulent hospice care.

“These defendants recruited beneficiaries who were not terminally ill, and paid them to pose as patients receiving hospice care. Medicare then paid millions of dollars – hundreds of millions of dollars – on false and fraudulent claims submitted by fraudsters,” said Essayli.

Among those arrested were a Covina couple. Prosecutors said 66-year-old psychologist Gladwin Gill and his wife, Amelou Gill, a registered nurse, operated a fraudulent hospice business out of Glendale.

“This particular hospice submitted more than $5.2 million in fraudulent claims, and Medicare actually paid out more than $4 million,” Essayli said.

Gill’s attorney told our sister station, ABC7 Eyewitness News in Los Angeles, he denies the allegations and looks forward to his day in court.

Oz announced a broader review of hospice providers in the state.

“We’re going to review every single hospice in California to make sure that they’re all appropriate, and we hope to do that expeditiously. We’ll do it this year,” Oz said.

During the news conference, federal authorities were questioned about a video California Gov. Gavin Newsom said in January his office was reviewing. In that video, Oz, who is Turkish American, was shown standing in front of an Armenian-owned bakery in Van Nuys while alleging widespread fraud in the area.

Essayli confirmed that none of the defendants named Thursday were connected to that video. Oz responded to outcry that his accusations, which the business owner denounced as false, were discriminatory.

“I was stating the facts as they’ve been explained to me, and we have a lot of evidence of where the fraud is, just looking at the numbers,” Oz said.

Oz did not provide any evidence against a specific business in connection to that video. He suggested that half of Los Angeles County hospice care facilities are fraudulent, pointing to survival percentages as evidence.

“World experts at CMS say if you’ve got 100% or near survival, certainly if you’ve got a survival over 50% for population that’s supposed to have passed in six months, you’ve got a problem,” he said.

Newsom responded to accusations that California had not done enough to address hospice fraud, saying in part, “The Trump Administration – home to the biggest fraudsters on Earth – is trying to blame California for issues with THEIR federal programs.”

His press office said the state has taken action for years, including suspending more than 280 licenses and banning new ones.

A home-based food movement has been heating up in California, with home cooks turning their beloved family recipes into small businesses. 

When most people get laid off, they update their résumés. James Houlahan preheated his oven.

“It’s pretty brutal, and since nobody’s hiring, I just figured I need to make a job for myself,” he said.

So the San Francisco Bay Area resident went back to a family recipe and decided to take a risk, with a whisk. He started making pavlovas, a light, meringue-based Australian dessert, crisp on the outside and soft in the middle.

“It’s something my mom and I always joked about whenever we’d bring a pav to a party, this thing kills,” Houlahan said. “So we figured, someone’s gotta make a business out of this.”

So he did, out of his own kitchen in Alameda. 

And that’s not a loophole. A 2019 law called MEHKO, or Microenterprise Home Kitchen Operation, allows people to cook and sell food right out of their homes. Since then, more than 1,000 of these home kitchens have opened across California, operating under a growing but still patchwork system.

There are rules: food must be made from scratch and sold the same day. Not every county is on board, but there is now a push to expand it statewide.

Roya Bagheri, the executive director of The Cook Alliance, the nonprofit behind MEHKO, said the law is gaining momentum across the country as other states consider their own versions. 

“The cost of getting something like a food truck or a brick and mortar restaurant is so high, this creates an access to enter the food industry,” she said.

A study by the group showed more than a third of home kitchen operators have used MEHKO as a stepping stone into something bigger.

But for some, the law is still a little undercooked. Jot Condie, president and CEO of the California Restaurant Association, warned that some counties may not have the resources to take it on.

“If they don’t have the budget, there may not be a rigorous inspection procedure, and that is a huge concern for us,” Condie said.

As for Houlahan, he’s betting on his own kitchen and his mother’s name: Marianne’s Pavlovas. And his customers, like Flora Tso, are already sold.

“Nowadays it just gives us more choice,” she said.

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