Six employees at Sherman Oaks hospice accused of fraud

Six employees of a Sherman Oaks hospice have been charged with operating a healthcare scam in which they submitted $9 million in fraudulent billing to the state and federal government for medical services never performed or medically unnecessary, the state attorney general’s office said Tuesday.

The suspects include a mother and her two children as well as physicians at We Care hospice, officials said. One suspect was arrested Tuesday, another remains at large, and four others are expected to surrender to authorities later this month.

“We Care obviously didn’t care about doing the right thing or helping sick people,” state Atty. Gen. Jerry Brown said in a prepared statement. “In total, they bilked the public out of $9 million and used the funds to enrich themselves and pay for expensive homes and luxury cars.”

Among those charged with grand theft and making fraudulent claims, according to authorities:

Milagros Delmendo, 58, of Northridge, owner of the hospice, who was arrested and booked into Los Angeles County Jail; Kristina Delmendo Deguzman, 31, of Studio City, the nursing supervisor, who is expected to surrender to authorities today; Mark Delmendo, 28, of Studio City, the human resources manager, who remains at large; Dr. Nolan Jones, 60, of Los Angeles, has agreed to surrender to authorities; Dr. Anselmo Alliegro, 78, of Dundalk, Md., who will surrender later this month.

Ramon Parayno, 46, of Studio City, who has agreed to surrender, authorities said, was charged with grand theft and making illegal payments.

As part of the scheme, Milagros Delmendo would pay Parayno a $500 “finder’s fee” for identifying and enrolling relatively healthy Medi-Cal and Medicare patients at the hospice and then billing the government for services never performed, court documents show. She would pay him another $500 for each month the patient stayed at the facility.

Parayno, in turn, would pay patients $200 to enroll at the hospice and for each month they remained, the documents show. At one point in 2005, according to the records, he made more than $20,000 in one month.

Jones and Alliegro, the doctors at the hospice, falsely diagnosed patients with terminal illnesses, according to the affidavit. The nursing staff was also directed by Milagros Delmendo, her son, Mark, and her daughter, Kristina, to note that patients had nonexistent symptoms such as shortness of breath or moderate to severe pain, court papers show.

The investigation began after a 2007 audit of the hospice found an especially low mortality rate. Between 2004 and 2005, a 400% increase in billing at the hospice led to closer scrutiny, the state attorney’s general’s office said.

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raja.abdulrahim@latimes.com