U.S. Attorney E. Martin Estrada | U.S. Department of Justice
A jury has found a Glendale woman and a Lakewood man guilty of participating in a scheme involving illegal kickbacks for patient referrals, leading to fraudulent Medicare claims amounting to approximately $3.2 million. The Justice Department announced the verdicts today.
Nita Palma, 75, from Glendale, was convicted on 12 counts of health care fraud and 16 counts related to paying illegal kickbacks for health care referrals. Percy Abrams, 74, from Lakewood, was found guilty on six counts of receiving illegal kickbacks for health care referrals.
During the trial, evidence showed that Palma had been excluded from Medicare due to previous convictions involving illegal kickbacks. Despite this exclusion, she acquired Magnolia Gardens Hospice through her daughter in 2015 and hid her ownership from Medicare authorities.
Palma allegedly paid marketers like Abrams significant sums in kickbacks for patient referrals that were then billed to Medicare as hospice care services. These services are intended only for terminally ill patients with a life expectancy of six months or less.
Abrams reportedly misled potential patients by stating they did not need to be terminally ill to receive hospice care. He collected personal information from these individuals and sent it to Palma so she could bill Medicare fraudulently.
The fraudulent activity resulted in around $3.2 million in false claims submitted between 2015 and 2016 through Magnolia Gardens Hospice for non-terminal patients. Palma received about $6,000 monthly per patient billed to Medicare and paid up to $1,000 per month in kickbacks per referred patient.
Some patients billed through Magnolia Gardens were unaware they were enrolled in hospice until denied coverage for necessary medical services. In response to Medicare's requests for documentation supporting the claims, Palma allegedly directed employees to fabricate patient charts.
Court documents also suggest that while awaiting trial, Palma took control of three additional hospices and submitted approximately $4.8 million more in claims for supposed hospice care.
Sentencing is scheduled before United States District Judge Dolly M. Gee on April 23, 2025. Both defendants face potentially lengthy federal prison terms if convicted as charged.
The investigation was conducted by the United States Department of Health and Human Services Office of Inspector General alongside the FBI. The case is being prosecuted by Assistant United States Attorney Roger A. Hsieh from the Major Frauds Section and Matt Coe-Odess from the General Crimes Section.
