Federal prosecutors say an Orange County man used California’s Medi-Cal system to run nearly $270 million in fraudulent billings through the state's Medicaid program, collecting more than $178 million before he was caught.
Paul Richard Randall, 66, pleaded guilty to wire fraud. Over 11 months, he ran the scheme through Monte Vista Pharmacy, billing Medi-Cal for expensive drugs that patients didn't need and, in many cases, never received.
“This defendant used a public health program as his personal piggy bank,” said First Assistant U.S. Attorney Bill Essayli.
Randall and his partners used Monte Vista Pharmacy to charge Medi-Cal tens of millions of dollars per month for drugs made from cheap generic ingredients but billed at premium rates. The prescriptions came with kickbacks attached, and in many cases, the drugs were never handed to patients.
“He and his co-schemers stole over $178 million through false and fraudulent claims for these medications, lining their own pockets with public funds,” said Assistant Attorney General A. Tysen Duva.
The billings sailed through during a window when Medi-Cal had dropped its standard pre-approval checks for certain drugs while switching to a new payment system. Under the old rules, most of those claims would have been flagged and reviewed. Instead, prosecutors say, the open door let Randall flood the system with claims for drugs nobody needed and many patients never got.
“Schemes that bill Medicaid for costly drugs that patients never needed or received threaten the integrity of the program,” said Acting Deputy Inspector General for Investigations Scott J. Lampert.
Randall also admitted to laundering money through third parties, funneling cash for kickbacks, and hiding the trail from investigators. He could face up to 30 years in federal prison when he's sentenced in August.
Newsom’s Hospice Fraud 'Crackdown' Collapses: 197 Agencies Registered to One Address
What Randall pulled off wasn't an isolated trick. It fits a pattern investigators had already been watching across California's healthcare system, one that got worse on Newsom's watch as the provider rolls swelled and the warnings piled up, ignored.
In Los Angeles County alone, more than 700 hospice providers raised multiple red flags: shared addresses, shared administrators, and the same people quietly running several different companies at once.
“More than 700 of the roughly 1,800 hospice agencies in Los Angeles County had two or more indicators commonly associated with fraud.”
All of it was sitting in state records years before Randall ever entered a guilty plea. The same warning signs. The same overlapping providers. The same billing risks that his scheme would later exploit.
“State records list 89 hospice agencies registered at the same address in Van Nuys. The building owner told investigators that only about 12 companies actually operate from the location.”
Follow-up reporting found nearly 200 hospice agencies linked to a single Van Nuys address, with almost no sign that any actual medical work was being done there.
“In the most extreme case, a single medical director has been listed as working simultaneously at 45 different hospices.”
State auditors noted that medical director roles typically require full-time attention. Forty-five simultaneous positions aren't just suspicious. They're not possible.
In the end, Medi-Cal paid out more than $178 million from Randall's operation alone, part of nearly $270 million in claims he pushed through in under a year. Every dollar moved through a state system that had already been called out for shoddy verification and a tangle of overlapping providers.
Randall has admitted to everything and is awaiting sentencing. By the time federal prosecutors stepped in, the money was already gone, having been processed through a system that state officials had been warned about for years, while Newsom kept expanding it.
The scheme is done. The system Newsom built is still running.
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