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Hospice care is supposed to be a sacred service, providing comfort and dignity to the terminally ill in their final months of life. But for Nita Almuete Paddit Palma, a 75-year-old Glendale woman with a decades-long history of healthcare fraud, hospice was just another way to steal from Medicare. According to federal court documents filed in United States v. Nita Almuete Paddit Palma and Percy Dean Abrams, Case No. 2:20-cr-00536-DMG, Palma and her co-conspirators submitted approximately $10.6 million in fraudulent claims for patients who were not dying and often did not even know they had been enrolled in hospice.
Nita Palma’s criminal history in healthcare fraud stretches back more than three decades. In 1995, the California Court of Appeal affirmed her conviction on six counts of receiving unlawful remuneration in a Medi-Cal kickback scheme. She received probation, 180 days in county jail, and a $60,000 fine. That conviction stemmed from a scheme in the late 1980s where Palma paid operators of board-and-care homes $40 per patient for Medi-Cal eligibility stickers, which she then used to bill the state for medical supplies.
But that conviction did not stop her. In 2010, Palma was indicted again, this time in federal court, for paying illegal remunerations under the federal Anti-Kickback Statute. A jury convicted her, and in 2012 the Ninth Circuit Court of Appeals affirmed her conviction and 42-month federal prison sentence. That conviction resulted in her exclusion from Medicare, meaning she was legally barred from participating in any federal healthcare programs.
For most people, two convictions and federal exclusion would have ended any involvement in healthcare. For Nita Palma, it was merely an obstacle to work around.
According to the Department of Justice, while excluded from Medicare, Palma purchased Magnolia Gardens Hospice through her daughter and bought C@A Hospice through her husband in 2015. She concealed her ownership interest in both hospices from Medicare, using family members as straw owners to continue billing the very programs from which she had been banned.
With control of two hospices, Palma implemented a scheme built on the same foundation as her previous crimes: illegal kickbacks for patient referrals. She paid marketers, including co-defendant Percy Dean Abrams, hundreds of thousands of dollars in illegal kickbacks to recruit patients for her hospices. According to court documents, Palma paid up to $1,000 per month for each patient referred to her that was billed to Medicare. In return, she received approximately $6,000 per month for each patient enrolled.
Hospice care under Medicare is reserved exclusively for patients who are terminally ill with a life expectancy of six months or less. When a patient elects hospice, they forfeit certain Medicare benefits because the focus shifts from treating the illness to providing comfort care. This makes hospice fraud particularly harmful to victims.
According to federal prosecutors, Percy Dean Abrams falsely represented to prospective patients that they did not need to be dying to be on hospice. Following instructions provided by Palma, Abrams collected personal identifying information from people who were not terminally ill and forwarded that information to Palma so she could bill Medicare for purported hospice services.
Many of the patients billed through Magnolia Gardens Hospice did not even know they had been enrolled in hospice. According to court documents, some patients only discovered the enrollment after they were denied medical coverage for services they actually needed. By being fraudulently enrolled in hospice without their knowledge, these patients lost access to Medicare benefits they were entitled to receive.
When Medicare requested additional documentation to support the hospice claims being submitted by Magnolia Gardens, Palma and her husband directed employees to create fake patient charts. These fabricated medical records were then submitted to Medicare to justify claims for patients who had never received hospice services or who did not qualify for hospice care.
Perhaps most remarkably, according to court documents, while awaiting trial in this matter, Palma took control of three additional hospices and caused the submission of approximately $4.8 million in additional fraudulent claims for purported hospice care. Even facing federal prosecution for a decade-long fraud scheme, she allegedly continued to steal from Medicare.
In October 2020, a federal grand jury in the Central District of California returned an indictment charging Nita Palma with 12 counts of health care fraud under 18 U.S.C. Section 1347(a)(2) and 16 counts of paying illegal kickbacks for health care referrals under 42 U.S.C. Section 1320a-7b(b)(2)(A). Percy Dean Abrams was charged with six counts of receiving illegal kickbacks under 42 U.S.C. Section 1320a-7b(b)(1)(A).
The case was assigned to United States District Judge Dolly M. Gee and prosecuted by Assistant United States Attorneys Roger A. Hsieh of the Major Frauds Section and Matt Coe-Odess of the Domestic Security and Immigration Crimes Section. The investigation was conducted by the United States Department of Health and Human Services Office of Inspector General and the FBI.
At the conclusion of a six-day trial in December 2024, a federal jury found Palma guilty on all 28 counts. The jury also found Abrams guilty of all six counts of receiving illegal kickbacks.
On August 5, 2025, Judge Gee sentenced Nita Palma to 108 months in federal prison, nine years, and ordered her to pay $8,270,032 in restitution. At 75 years old, having spent more than three decades defrauding government healthcare programs, Palma will likely spend most or all of her remaining years in federal custody.
At a separate hearing the same day, Judge Gee sentenced Percy Dean Abrams to three years of probation, including two years of home confinement. The disparity in sentences reflects Abrams’s lesser role in the scheme as a marketer rather than the mastermind.
The Magnolia Gardens case is part of a larger pattern of hospice fraud that has plagued California in particular. According to the Los Angeles Times and ProPublica investigations, California has become a hotbed for hospice fraud schemes that target vulnerable patients and drain billions from Medicare. The state has struggled to regulate the industry effectively, with new hospices continuing to receive Medicare certification even when state authorities have raised concerns.
In this case, Palma exploited the same vulnerabilities that have enabled countless other schemes: the difficulty of verifying terminal diagnoses, the ease of recruiting vulnerable patients through kickbacks, and the challenge of detecting fraud in an industry built on trust. She used family members to hide her ownership, fake charts to satisfy auditors, and marketers who told patients whatever lies were necessary to get them enrolled.
Behind the millions of dollars in fraudulent claims are real victims. Patients who did not know they had been enrolled in hospice, who lost access to medical care they needed because someone had fraudulently declared them terminally ill. Taxpayers who funded Medicare with the expectation that it would serve the genuinely ill, not enrich career criminals. And legitimate hospice providers whose reputations suffer when cases like this make headlines.
Nita Palma built a career spanning more than 30 years on exploiting government healthcare programs. She was convicted in 1995 and continued. She was convicted in 2010 and continued. She was excluded from Medicare and continued. Only now, at 75, facing nine years in federal prison and more than eight million dollars in restitution, has her scheme finally come to an end.
The case was investigated by the United States Department of Health and Human Services Office of Inspector General and the FBI.
Verifiable case records used in this investigation
Federal Grand Jury Indictment charging Nita Palma with 12 counts of health care fraud and 16 counts of paying illegal kickbacks, and Percy Dean Abrams with 6 counts of receiving illegal kickbacks in the Magnolia Gardens Hospice fraud scheme
Judgment in a Criminal Case for Percy Dean Abrams sentencing him to three years probation with 24 months home detention for receiving illegal kickbacks in healthcare fraud scheme
United States Trial Memorandum detailing the government's evidence of Nita Palma's $10.6 million hospice fraud scheme including her prior convictions, use of straw owners to hide Medicare exclusion, kickback payments to marketers, and fabrication of patient charts
[0:00] Hello again, it’s your friendly host, Steve Rode. This time I’m bringing you a case that overlaps with the kinds of stories I’ve been chasing for decades in the consumer debt world. It’s a reminder that when someone gets a taste of fast or easy money, the temptation to return to it, even after being caught, can be irresistible. In this episode, I’m going to tell you about how one woman stole millions of dollars and prevented people from getting their regular medical care. The fraudster seems so addicted to the scam that she simply could not stop herself. I’ve been working on episodes that were heavy and filled with many victims and tragic circumstances. You’ve heard them since you’re already subscribed to this podcast, I’m sure. [0:55] By pulling unwitting patients into this scam, they weren’t just stealing money, they were stealing treatment. Imagine being told you were end of life, and suddenly the chemotherapy, the dialysis, the therapies that could keep you alive, all got cut off. [1:15] For me, the reason this case is important is not only did both of my parents need hospice care at the end of their life, But, when Medicare is told that a person is now at the end of their life, dying, and in need of comfort care before they die, everything changes. The system assumes that recovery is no longer possible. Treatments that fight illness stop. Chemotherapy ends. Dialysis cut off. Even regular visits with a family doctor, the kind that keeps people stable and healthy, may no longer be covered. Much of the care people depend on to stay well disappears because hospice is built only for comfort, not for getting better. This scheme didn’t just line pockets. It made people sicker. It may even have shortened lives. And all for what? Profit? That’s why this case is such a big deal. It wasn’t just about dollars and cents. It was about stealing time and hope and medical treatment from people. [2:32] I mean, think about it. Hospice is supposed to be about dignity, about comfort in the final chapter of life. Instead, in this case, it was twisted into a business model where every patient became a paycheck and every signature a dollar sign. [2:50] In today’s case, we meet Nita Palma, also known in earlier records as Nita Katbagen, a woman who went by several names and spent decades finding her way back into the system. Court filings under Katvagin name tied her to earlier convictions, but by 2015, she was back at it again, weaving herself into new companies and schemes. Like every episode in this series, what you’re about to hear is based entirely on court documents, sworn testimony, and public records. Nothing more, nothing less. At the end of this episode, I’ll tell you how you can download all the source documents yourself so you can read the official record directly. [3:37] Let’s jump in. I think you’ll find this one fascinating, even though it has no gore. You know, I thought this would be just another white-collar scam story without human tragedy. And you’ll see in the very next moment, I was wrong. Before we go one more step, I need to tell you. This podcast is for educational and informational purposes only. Nothing in this episode should be taken as legal advice, medical advice, or professional guidance. [4:14] It’s August 5th, 2025, Los Angeles. The federal courthouse hums with anticipation. The air thick with tension. Reporters lean forward with pens poised. Laptops on their lap. Families sit pressed together on the hard wooden benches, waiting for the gavel to fall. At the defense table, Nita Palma stands in custody. 75 years old, her hands grip the edge of the table until her knuckles whiten. Her eyes stay fixed, forward, not on the judge, not on the gallery. Her face is unreadable, a mask that betrays nothing. Judge Dolly Gee leans forward from the bench, her voice steady, deliberate, carrying across the hushed courtroom. 108 months. A pause. The sound stretches. Nine years and $8.3 million in restitution. [5:23] The gallery barely stirs, no gasp, no whisper, just the faint scrape of the reporter’s pen and the shifting juror’s chair. Palma doesn’t flinch. Some in the audience glance at each other, eyes wide, but no one dares to break the silence. She has denied wrongdoing for years. At one earlier hearing, she told investigators flatly, I did not do anything wrong. But here on sentencing day the weight of decades of fraud finally sets in and the truth is this it wasn’t just about money it was about what that money took away from patients from families from care that should have been there i mean imagine being one of those families in the gallery hearing the sentence but remembering the nights when a nurse never came when medicine didn’t arrive when the word hospice stole options instead of offering comfort. [6:26] The story doesn’t begin in a courtroom. No, it begins decades earlier, with red flags that were impossible to ignore. 1995, a California jury convicts Nita Katbagen of Medi-Cal kickbacks. More than $200,000 moved through the scheme. Money traded for patients, not care. She serves jail time, probation, and pays heavy fines. For most people, that would have been the end. A conviction like that is supposed to scare you. It scars your name, your reputation, your ability to work in health care. It’s the kind of black mark that’s supposed to close doors forever. But not for Nita Palma. In 1997, her name appears in the Federal Register, officially excluded from being eligible to receive Medicare payments. Fourteen years later, in 2011, that exclusion was reaffirmed after, guess what, another conviction. Palma had never been reinstated. Her name was on the government’s blacklist, a warning to anyone who cared to look. [7:38] I mean, imagine that page Thin paper, black ink, and a long, sterile list of names Among them, Palmas A permanent ban It should have been the end of the story And yet, in a system as vast as Medicare, Exclusion was not an iron gate It was more like a flimsy lock One Palma would rattle and test and eventually learn to pick, Families later told reporters the fraud was anything but abstract. [8:12] One California woman said her mother was still out in the yard gardening when she was enrolled in the hospice care. Another couple thought they were getting free drinks at a strip mall only to later discover their Medicare information had been used to enroll them in hospice. Yet the warning wasn’t enough. Instead of stopping, those early red flags became a pattern a cycle Palma would return to again and again. And as we’ll see, those early warnings weren’t just ignored by Palma. They were ignored by the very system meant to stop her. [8:53] 2010, federal prosecutors bring Palma into court once again. This time, the charge? Illegal remunerations. Kickbacks dressed up as business deals. The courtroom is smaller than the grand chambers of Los Angeles, but the stakes feel enormous. Palma sits with her lawyer, face calm, as witnesses describe how money passed hands. The jurors take notes, pens scratching rhythmically, eyes darting towards Palma. The sentence this time, 42 months in federal prison, three years of supervised release, a punishment meant to end a career of fraud. [9:35] 42 months, nearly four years, time that could change a person, break old habits, pushed them to start over. For most people, prison is the end of the line, but prison didn’t break the pattern. Even after she filed her appeal, an appeal that failed in 2012, Palma was already looking for her next angle. I mean, picture her in a prison jumpsuit, walking in the yard, talking in hushed tones with other inmates. Some might have been planning for freedom. Um, Palma seems to have been planning her return to fraud. By 2015, she was under supervision. Most people would keep their head down, finish their term quietly. But Palma was different. Apparently, she was restless and watching and waiting. You think she’d lie low. Instead, she made a move that shocked even investigators. I’m going to tell you about that coming up. [10:35] 2015, Palma was still excluded from Medicare, still under supervision. But on paper, a new hospice appeared Magnolia Gardens The buyer was listed as her daughter, Michelle Vargas But according to court filings and trial exhibits Palma actually signed her own name on the purchase agreement Only to vanish from the federal forms Replaced by her daughter’s signature A straw owner A paper mask, Behind the scenes, prosecutors said Palma controlled Magnolia. Bank accounts for Magnolia and her other company, C&A Hospice, were tied to her. Records showed she used one to pay for the other, shifting checks back and forth, feeding one scheme into the next. [11:26] Imagine those offices, the low hum of fluorescent lights, the faint smell of antiseptic, the printers spitting out forms that would carry false diagnoses. And that wasn’t a hospice filled with comfort and compassion. It was, according to government filings, an assembly line of fraud. To fill beds, prosecutors allege she turned to marketers. Court records described recruiters promising families free medication, free equipment, free care, even when patients weren’t dying. Some marketers were paid $1,000 per patient per month. Every name became another line in Palma’s handwritten notebooks, Families told reporters some patients were even signed up in strip malls and parking lots One couple said they thought they were getting free drinks Only to later discover that Medicare information had been used to enroll them in hospice, Doctors noticed At an interdisciplinary meeting, according to testimony Dr. Evelyn Basco said the patients didn’t qualify Palma snapped back How am I supposed to make payroll if all the patients are discharged? [12:45] In January 2016, trial exhibits showed Dr. John Thrope texted Palma S.H. Very healthy, running down steps in her home Putting her on hospice is an abuse, One California family said their mother wasn’t dying at all. She was walking and gardening. Yet, hospice enrollment meant she couldn’t get her pacemaker checked by her doctor. Regular, routine medical care stopped instantly when enrolled in hospice. Hospice is supposed to ease suffering at life’s end. But here, prosecutors argued, it was twisted into something grotesque. A place where the healthy were declared dying so someone else could profit Palma wasn’t working alone Another figure was waiting in the wings And that story comes right up. [13:45] Magnolia Gardens didn’t run on its own, Palma had help Enter Percy Abrams A recruiter, a marketer, a man with connections His intake sheets, according to trial exhibits listed both Magnolia and C&A. To him, the two hospices were interchangeable. For prosecutors, they were twin engines of fraud. In ledgers later shown to jurors, names lined the pages. Pasqua, Turner, Black, and Abrams. Each with numbers beside them, each prosecutor said a price tag for human referrals. Think of what those ledgers represented. Not patients with names, families, and lives, but line items, commodities, each worth a payout, each stripped of humanity and medical care. On tape, Abrams’ voice drops to a whisper. It’s illegal. They’d put me under the jail if they found out. [14:52] Prosecutors said he was still offered cash for hospice referrals. Later in court filings, Abrams urged he was motivated by compassion and that his payments were tithes to his church. They were donations, not greed. Families recalled nurses showing up uninvited, pressuring loved ones into hospice enrollment, sometimes offering equipment or housekeeping, sometimes just to sign papers. What looked like help was a sales pitch with life-altering consequences. With Abrams on board, prosecutors argued the scheme had marketers and money. But that wasn’t the end of it. They said Palma kept scheming even after indictment. October 2020. After years of whispers and texts and notebooks filled with names, the case finally crystallized into black ink on paper. An indictment. 12 counts of health care fraud. 16 counts of paying kickbacks. For Percy Abrams, six counts of receiving them. The numbers leapt off the page. More than $3.2 million in claims. Two and a half million actually paid. Kickback checks as high as $7,000. [16:16] Picture the prosecutors walking into the grand jury with binders, stacked, waist-high, evidence tabbed and highlighted, every page another piece of a machined, designed not for care but for cash. [16:31] In the language of the court, it was neat and clinical. In reality, it was the blueprint of a fraud machine that was about to be tested in court. [16:44] The indictment was only the beginning. What followed were months of pretrial motions, hearings, and strategy. Palma sat at the defense table, her interpreter whispering beside her. Palma’s past defined her present, and she seemingly knew it. The government pressed to admit that past, her earlier convictions, her exclusions. The defense fought just as hard to keep them out. calling them prejudicial, unfair. The courtroom became a chessboard, attorneys sparring over what jurors could see, what history they could weigh. Onlookers leaned forward, sensing the importance. This wasn’t background noise. It was a fight over Palma’s entire narrative. Imagine the attorney shuffling papers, sliding binders across the table, raising objections that echoed through the chamber. Each side wasn’t just arguing over law, they were battling to control the story the jury would hear. Meanwhile, prosecutors revealed something more troubling. Even under indictment, Palma was still signing incorporation papers. New hospices, new names, fresh companies waiting in the wings. [18:05] I mean, picture the prosecutors sliding those documents across the judge’s bench. Fresh ink, fresh signatures, companies born while another was collapsing. It was as if she was defending one crime while already setting up the next. But the real shock would come when jurors opened the binders themselves. And I’ll tell you about that coming up. [18:32] December 2024. After years of buildup, the trial begins. The jurors file into Judge Gee’s courtroom. Notebooks in hand, eyes sharp with fatigue. They settle into the jury box, the air heavy with expectation. The government didn’t just tell them about the fraud, it showed them. Stacks of binders landed on desks with a dull thud. Pre-signed forms, doctored charts, evidence that prosecutors argued didn’t just speak. It shouted! One juror leaned forward tracing a physician’s signature that looked too perfect. Later, Dr. Daniel Lineres testified that those certificates carried his electronic signature, but he never signed them. Another binder revealed charts backdated to satisfy Medicare audits. One page was almost absurd. A doctor’s name was literally taped on it. [19:35] Imagine being a juror in that moment, flipping through pages, seeing the taped-on signatures, realizing this wasn’t a clerical error. It was, according to prosecutors, fraud made tangible in ink and glue. But here’s the shocking part. When Medicare looked closely, they said nearly every claim fell apart. Out of the 270 claims reviewed, 266 were denied. 98 percent. It wasn’t just sloppy paperwork. Prosecutors told jurors it was wholesale forgery. The pattern was clear, page after page, binder after binder. In a trial, numbers can blur, but here 98 percent told a story by itself. This wasn’t an accident. It was, prosecutors argued, a business model. Jurors saw fraud spelled out in binders, but that’s not where it ended. [20:40] More revelations are coming up. [20:44] June 2017. Federal agents close in on C&A Hospice. The investigation that had lived in Files and Whispers was suddenly at the door. [20:57] Outside, Special Agent Bernard approached Nita Palma. She looked smaller than she did in court, shoulders stiff, clutching her purse. You know you’re excluded, right? You can’t participate in health care. Palma said, yeah, yeah, yeah. And without missing a beat, she said, I don’t work there. But inside, agents found what prosecutors later presented in court. Composition notebooks tracking kickback payments, records where physician signatures had been taped. Doctor files, evidence of manipulation as blatant as glue and scissors. Picture the agents flipping through those binders. The sound of pages turning, a signature, half peeled from charts where they had been taped. Fraud was not just alleged, but physically pasted together, according to trial exhibits. The irony was stark. On one table sat binders documenting her past fraud. On another, prosecutors said were brand new incorporation papers, proof that even while under indictment, Palma was laying the groundwork for her next move. [22:13] Agents packed the doctored files into evidence boxes. The sound of tape sealing cardboard, echoing through the office. Every box carried, as prosecutors described, a piece of the truth she had tried to hide. And if Palma’s own words betrayed her, Abrams’ time on the stand would do the same. I’m going to tell you about that next. When Percy Abrams took the stand, the courtroom leaned in. His reputation as a community man, a neighbor, a churchgoer, had followed him inside. But now, he faced the jury. He spoke softly at first, saying he didn’t know that being paid per patient was wrong. His hands folded on the witness stand, eyes fixed on his lawyer, voice carrying a note of practice sincerity. Imagine sitting in the jury box hearing this man speak gently, almost pastorally, and wondering, could someone like him really have known what he was doing was wrong? And then the government pressed play. From the speaker came Abrams’ own voice, caught in an undercover recording. It’s illegal. They’d put me under the jail if they found out. [23:40] The contrast was devastating. To the jury, it wasn’t a matter of opinion anymore. [23:45] It was a matter of proof. Two portraits of the same man. One insisting on ignorance. The other whispering, and, And that’s what made it so powerful. Jurors weren’t left to wonder about intent. They heard it in his own words, dripping with fear and certainty. His words sealed his fate. But that’s not the end. The jury still had to decide Palma’s fate, too. [24:17] December 11, 2024. Eight days of testimony have led to this moment. Jurors sit stiffly as the clerk begins to read. Faces tight, eyes forward. One by one, the counts are announced. Guilty, guilty, guilty, guilty, guilty. For Nita Palma, all 28 counts. For Percy Abrams, all six counts. But the verdict wasn’t just about paper crimes. Victims themselves had testified. [24:51] Beneficiaries all told jurors they were never terminal Some described walking their dogs, taking trips Even driving across town while they were listed as dying One daughter described the shock of opening a letter Declaring her father was in hospice When he was very much alive, Doctors confirmed what families already knew These patients didn’t belong in hospice care, One daughter later told investigators We didn’t even know mom had been signed into hospice Until her regular doctor bills stopped being paid She wasn’t dying But the moment she was enrolled, the treatment stopped, That disbelief echoed reporting from the California Health Report Where one family said, my mother was not dying She was gardening as they said she was terminal. [25:47] Imagine hearing that testimony in the hushed courtroom Every juror suddenly alert Every pen paused above a page The air electric with disbelief and anger, The words hung heavy in the room As the verdict was finished Guilty on all accounts, Now you might think that would finally close the chapter, But that’s not all. Sentencing would reveal even more about how far Palma went. [26:25] The courtroom felt different when Percy Abrams returned for sentencing. The tension of the verdict had given way to something quieter. A tug of war between sympathy and accountability. Support letters had poured in. Neighbors, fellow church members, community leaders. On the judge’s bench sat a stack of them. Each one describing a generous neighbor, a faithful friend, a man of upright character. Picture the pile Envelopes opened Pages creased from handling Words flowing with kindness And they painted Abrams as someone trustworthy, charitable And a man who gave more than he took His lawyer painted him as frail A 75-year-old man with Alzheimer’s Asthma, COPD Too weak for prison, they argued Too ill for a jail cell. [27:20] The tape, Abram’s own voice whispering It’s illegal, they’d put me under the jail if they found out, Two portraits clashed in that room One written in letters of praise The other echoing from speakers, heavy with self-incrimination Two portraits of the same man, one generous and charitable The other knowingly pocketing $421,823 in illegal kickbacks So which version of Percy Abrams was the real one? The respected community man described in letters Or the recruiter whispering about hiding kickbacks? Maybe it was both And maybe that’s the harder question How someone known for good character can still get pulled into a lucrative fraud. [28:18] By the time Nita Palmer returned for her own sentencing, the trial had already reshaped her image. No longer just a businesswoman accused of fraud, now a repeat offender, an operator who prosecutors said couldn’t let go. She had churned through six different attorneys, each delay pushing the trial further down the calendar. Prosecutors accused her of stalling, of bending the system as easily as she bent her charts. And still, according to court filings, the schemes continued. Even while under indictment, prosecutors told the court, Palma tied herself to three more hospices, nearly $5 million in new claims. She spread her influence across corporate filings. Estrell Hospice, Estreller Corporation, Cannes Scientific Lab, J&J Consulting, different names, same pattern. I mean, imagine the audacity. Court dates looming, charges pending, and yet new hospices forming under fresh names? Angels of the Sun Hospice, A&T Hospice, Blue Sky Hospice. It was, according to prosecutors, as if prison time, prior convictions, and even public exposure meant nothing. [29:41] Prosecutors argued She simply could not stop herself The government described her As a woman undeterred But the truth may be harsher She wasn’t just relapsing Prosecutors said she was, Fraud wasn’t just her scheme, it was her addiction. Even under house arrest, she couldn’t stop. She multiplied, weaving herself into new companies, chasing the scam like a compulsion she couldn’t shake. It was like a gambler who couldn’t leave the table, always chasing one more roll of the dice. Fraud was her casino, and every new hospice, another bet she couldn’t resist placing. [30:25] For most people, an indictment is the end. But in court, prosecutors argued Palma kept going. Three more hospices, millions more dollars, and that’s not all. The judge still had to weigh what to do with a career scammer who never stopped. [30:46] August 5th, 2025. The same courthouse, the same judge, but now the focus squarely on Nita Palma. Judge Dolly M. Gee reads the sentence, 108 months in federal prison, nine years, and restitution? She owes $8,270,032. To the public, it’s a number. To prosecutors, it’s a victory. But to the families, it’s something else entirely. I mean, think about the nurses who never arrived, the morphine that wasn’t there to ease the pain, the counseling visits that never happened, all siphoned away from others, turned into checks and deposits for her. Families sat in the courtroom, some shaking their heads, others wiping away quiet tears. The sentence might have been numbers on paper, but they carried the weight of nights spent waiting for care that never came. Two co-defendants, same scheme, very different outcomes Percy Abrams walked free with probation and home detention And Palma, the mastermind, would serve nearly a decade. [32:03] Two paths diverged in sentencing, and millions stolen from the public purse? Dollars that should have delivered dignity and care to the dying, but instead were wasted on lies and kickbacks. Now, this case might have ended in one courtroom, but the damage rippled far beyond its walls. Los Angeles became the epicenter. Drive down certain streets and hospice signs stacked one after another. Not because more people were dying, but because scams, according to investigators, were multiplying. [32:43] Behind every sign was the same danger. When unwitting patients are signed up into hospice care, their regular medical care stops. Fraud doesn’t just steal dollars, it steals time and treatment and dignity. [32:59] Investigations by the Los Angeles Times, ProPublica, and a 2022 state audit revealed the scale. One building in Van Nuys held more than 150 hospices and home health agencies. More than the building could physically contain. In Glendale, there were 60. In Burbank, 61. In Van Nuys, 63. On another street. By contrast, entire states like New York and Florida each had fewer than 50. [33:30] Auditors estimated Los Angeles County Hospice overbilled Medicare by $105 million in one single year, with some licenses obtained using stolen medical identities. Advocates described it as a horrid image of hospice care in California, saying regulators had been asleep at the wheel. Hotline complaints surged, too. By 2021, the Senior Medicare Patrol logged a 60% increase in hospice fraud complaints. Prosecutors and state officials have called Los Angeles County ground zero for hospice fraud, with Glendale, Burbank, and Van Nuys as its busiest quarters. Oversight gaps turned into open doors, and scammers, according to ProPublica and state AG reports, walked right through. Texas, Nevada, Arizona. It’s the same story repeated. This wasn’t just a California problem. It was national. [34:34] The story of Nita Palma is a cautionary tale. A pattern of fraud so relentless, it became an addiction. System so porous, it allowed her to slip back in again and again and again. And maybe the most chilling part is how ordinary it all looked. Not back-alley deals in shadowy rooms, but tidy offices, smiling recruiters, paperwork stamped and filed. Fraud that hid in plain sight, cloaked in the language of care. So here’s the question I want to leave you with. What does it mean when fraudsters see themselves not as predators, but as helpers? or even his victims. Palma said she was helping people. Abrams said he was tithing his money. But their fraud stole care. It stole hope and maybe even stole years of life. And while this case was centered in California, similar scams are unfolding in Texas and Nevada and Arizona. This isn’t just a California problem. [35:41] If you found this episode compelling, Please take a moment to leave a five-star review on Apple Podcasts or wherever you’re listening. It helps more people discover these stories built directly from the court record. You can also download the official source documents for this episode at truecrimeunheard.com. And while you’re there, sign up to get notified when new episodes drop. [36:09] And next time, we’re in Detroit. where kidnapping meant as revenge went terribly wrong. They thought they had the right woman. Huh, they didn’t. Until next time, stay safe, stay curious, and I’ll see you.
Nita Almuete Paddit Palma, also known as Nita Catbagan, is a 75-year-old Glendale, California woman convicted of operating a $10.6 million hospice fraud scheme. She has been convicted three times for healthcare fraud spanning more than three decades, including a 1995 state conviction for Medi-Cal kickbacks, a 2010 federal conviction that resulted in a 42-month prison sentence, and the 2024 federal conviction for the Magnolia Gardens Hospice fraud.
While excluded from Medicare due to prior convictions, Nita Palma purchased Magnolia Gardens Hospice through her daughter and C@A Hospice through her husband in 2015 to conceal her ownership. She paid marketers up to $1,000 per month per patient in illegal kickbacks to recruit patients who were not terminally ill, then billed Medicare approximately $6,000 per month for each fraudulently enrolled patient. The scheme resulted in approximately $10.6 million in false claims to Medicare.
The federal case is United States v. Nita Almuete Paddit Palma and Percy Dean Abrams, Case No. 2:20-cr-00536-DMG, filed in the United States District Court for the Central District of California. The case was presided over by United States District Judge Dolly M. Gee and prosecuted by Assistant United States Attorneys Roger A. Hsieh and Matt Coe-Odess.
Percy Dean Abrams is a 75-year-old Lakewood, California man who worked as a freelance patient marketer for Nita Palma's hospice fraud scheme. He received hundreds of thousands of dollars in illegal kickbacks for recruiting patients and falsely told prospective patients they did not need to be dying to receive hospice services. He was convicted of six counts of receiving illegal kickbacks for health care referrals.
On August 5, 2025, Judge Dolly M. Gee sentenced Nita Palma to 108 months (9 years) in federal prison and ordered her to pay $8,270,032 in restitution. Percy Dean Abrams received three years of probation with two years of home confinement at a separate hearing the same day.
Nita Palma was charged with 12 counts of health care fraud under 18 U.S.C. Section 1347(a)(2) and 16 counts of paying illegal kickbacks for health care referrals under 42 U.S.C. Section 1320a-7b(b)(2)(A). A federal jury found her guilty on all 28 counts at the conclusion of a six-day trial in December 2024.
Palma has three healthcare fraud convictions spanning more than 30 years. In 1995, she was convicted on six counts of receiving unlawful remuneration in a Medi-Cal kickback scheme involving board-and-care homes. In 2010, she was convicted federally for paying illegal remunerations and sentenced to 42 months in prison, which resulted in her exclusion from Medicare. Despite this exclusion, she continued operating hospices through family members until her 2024 conviction.
Because Palma was excluded from Medicare due to her prior federal conviction, she used family members as straw owners to conceal her involvement. She purchased Magnolia Gardens Hospice through her daughter and C@A Hospice through her husband in 2015. This allowed her to continue billing Medicare despite being legally barred from participating in federal healthcare programs.
Many patients enrolled in Magnolia Gardens Hospice did not know they had been signed up for hospice care. Some only discovered the fraudulent enrollment when they were denied Medicare coverage for medical services they actually needed. Because hospice patients forfeit certain Medicare benefits when electing hospice care, victims lost access to treatments and coverage they were entitled to receive.
When Medicare requested additional documentation to support the hospice claims from Magnolia Gardens, Palma and her husband directed employees to create fake patient charts. These fabricated medical records were then submitted to Medicare to justify claims for patients who had never received hospice services or did not qualify for hospice care.
Yes, according to court documents, while awaiting trial in the Magnolia Gardens case, Palma took control of three additional hospices and caused the submission of approximately $4.8 million in additional fraudulent claims for purported hospice care. This continued fraud while under federal prosecution demonstrates her persistent disregard for the law.
The case was investigated by the United States Department of Health and Human Services Office of Inspector General (HHS-OIG) and the Federal Bureau of Investigation (FBI). Special Agent Niall Bernard of HHS-OIG served as the case agent.
Hospice care under Medicare is reserved exclusively for patients who are terminally ill with a life expectancy of six months or less. Hospice provides comfort care instead of trying to cure the patient's illness, and patients forfeit certain Medicare benefits when electing hospice. Palma's scheme exploited this system by enrolling patients who were not dying and did not meet the terminal illness requirement.
The fraud scheme operated from July 2015, when Palma purchased Magnolia Gardens Hospice, through at least October 2017. The federal indictment was returned in October 2020, and the six-day trial concluded in December 2024 with guilty verdicts on all counts.
California has become a hotbed for hospice fraud schemes that target vulnerable patients and drain billions from Medicare. Investigations by the Los Angeles Times and ProPublica have documented how the state struggles to regulate the industry effectively, with new hospices continuing to receive Medicare certification despite concerns from state authorities. The Magnolia Gardens case exemplifies how repeat offenders exploit these regulatory gaps.
Chronological sequence of key events
Nita Palma joined Primary Health Care Services, a medical supply company that paid sales agents for Medi-Cal patient stickers. Palma negotiated $40 per sticker with board-and-care home operators and received commission-based payments totaling over $200,000.
Primary Health Care Services paid Palma $127,497 from October 1989 to March 1990, plus $21,945 in her husband's name. Additional payments from Socorro Santos brought the total to approximately $211,716 in illegal remunerations.
The California Court of Appeal affirmed Nita Palma's conviction on six counts of receiving unlawful remuneration under California Welfare and Institutions Code Section 14107.2 in People v. Palma. She received probation, 180 days in county jail, and a $60,000 fine.
Nita Palma was indicted in federal court (U.S. v. Palma, Case No. 2:08-cr-01486-RGK) on two counts of paying illegal remunerations under the federal Anti-Kickback Statute, 42 U.S.C. Section 1320a-7b(b)(1)(A).
A federal jury convicted Nita Palma on two counts of paying illegal remunerations. She was sentenced to 42 months (3.5 years) in federal prison. This conviction resulted in her exclusion from Medicare.
The Ninth Circuit Court of Appeals affirmed Nita Palma's conviction and 42-month sentence for illegal remunerations. The court's memorandum noted that counsel could find no meritorious grounds for relief.
While excluded from Medicare, Nita Palma purchased Magnolia Gardens Hospice through her daughter and C@A Hospice through her husband to conceal her ownership interest from Medicare. She used family members as straw owners to circumvent her exclusion.
Palma began operating the hospices and recruiting marketers including Percy Dean Abrams. She paid marketers up to $1,000 per month per patient in illegal kickbacks and received approximately $6,000 per month for each patient billed to Medicare.
Text messages recovered by investigators showed physicians and marketers coordinating patient referrals in exchange for kickback payments. Abrams falsely told prospective patients they did not need to be dying to receive hospice services.
Many patients billed through Magnolia Gardens Hospice did not know they were signed up for hospice. Some patients only discovered the enrollment after being denied Medicare coverage for medical services they actually needed.
When Medicare requested additional documentation to support hospice claims, Palma and her husband directed employees to create fake patient charts. These fabricated medical records were submitted to Medicare to justify fraudulent claims.
The United States Department of Health and Human Services Office of Inspector General (HHS-OIG) executed search warrants at Magnolia Gardens Hospice and related locations as part of the federal investigation.
The charged fraud period for Magnolia Gardens Hospice ended in October 2017. Palma had owned and operated the hospice from July 2015 to at least October 2017, causing approximately $10.6 million in fraudulent claims to Medicare.
A federal grand jury in the Central District of California returned an indictment (Case No. 2:20-cr-00536-DMG) charging Nita Palma with 12 counts of health care fraud and 16 counts of paying illegal kickbacks. Percy Dean Abrams was charged with 6 counts of receiving illegal kickbacks.
Federal authorities arrested Nita Palma on the charges contained in the October 2020 indictment. She faced potential sentences of up to 10 years per count for health care fraud and up to 10 years per count for kickback violations.
According to court documents, while awaiting trial in the Magnolia Gardens case, Palma took control of three additional hospices and caused the submission of approximately $4.8 million in additional fraudulent claims for purported hospice care.
The court held a detention hearing and arraignment for Nita Palma. Transcript from the hearing (ECF 105) revealed her prior 42-month conviction and bond violations during the pendency of the case.
The United States filed its trial memorandum (ECF 193) ahead of the December 2024 trial, outlining the evidence against Palma and Abrams in the hospice fraud scheme.
The trial of Nita Palma and Percy Dean Abrams began before United States District Judge Dolly M. Gee in the Central District of California. The prosecution was led by Assistant United States Attorneys Roger A. Hsieh and Matt Coe-Odess.
At the conclusion of a six-day trial, the federal jury found Nita Palma guilty of all 28 counts: 12 counts of health care fraud and 16 counts of paying illegal kickbacks. Percy Dean Abrams was found guilty of all 6 counts of receiving illegal kickbacks.
United States District Judge Dolly M. Gee sentenced Nita Palma to 108 months (9 years) in federal prison and ordered her to pay $8,270,032 in restitution. At age 75, this sentence will likely keep her incarcerated for most or all of her remaining years.
At a separate hearing the same day, Judge Gee sentenced Percy Dean Abrams to three years of probation with two years of home confinement. The lighter sentence reflected his lesser role as a marketer rather than the mastermind of the scheme.
All information verified against official court records and primary documentation
Every fact cited in this investigation is sourced from official court documents, FBI records, or verified news archives. No speculation or unverified claims.
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