The California Department of Justice and several state agencies arrested five people Wednesday in a crackdown on an alleged hospice fraud ring, and officials said more arrests will come. Several suspects received "notices to appear" in court and will face arrest warrants if they don't show. In total, the state filed charges against 21 suspects.

State Attorney General Rob Bonta said the scheme defrauded California of $267 million through bogus charges to Medi-Cal, the state-administered Medicaid program. Americans pay into Medicare through taxes and premiums, so defrauding it would be essentially stealing from all American taxpayers. 

"What will address fraud is us doing the hard work — heads down, sleeves rolled up, doing the investigation, doing the arrests, doing the prosecutions, holding folks accountable," Bonta told CBS News.

Bonta said the defendants collected money without providing a single legitimate hospice service. The law enforcement effort, called Operation Skip Trace, targeted ten locations in Southern California. 

According to the California Department of Justice, individuals purchased identifying information for non-California residents from the dark web and used them to enroll in Medi-Cal. Then, straw owners bought 14 hospice companies and billers began billing the government for hospice care for the stolen identities. 

"There were no actual services, no hospice centers or any real paperwork, it was all made up as part of this fraudulent criminal activity," Bonta told CBS News. 

The charges include conspiracy to commit health care fraud, health care fraud, money laundering and identity theft. Defendants also face an aggravated white collar crime enhancement and an aggravated money laundering enhancement.

All of the hospice companies named in the complaints were state-licensed and approved by the California Health and Human Services Agency to bill Medi-Cal.The initial allegation of fraud came from the California Department of Health Care Services. 

Tyler Sadwith, DHCS' chief deputy director of health care programs and California state Medicaid director, told CBS News the state is currently investigating over 300 hospices for possible license revocation. 

"Taxpayers have an absolute right to expect that the administrators of this program are really prioritizing program integrity," he said. "That continues to be part of our core mission. That continues to be the top priority."

For months, CBS News has examined the business and financial records of every hospice currently operating in LA County, and applied the same indicators of potential fraud identified in a state audit. The CBS News analysis revealed that over 700 of the roughly 1,800 hospices in LA County, trigger multiple red flags for fraud as defined by the state.

On April 2, the U.S. Department of Justice announced that authorities arrested and federally charged eight people in connection with a health care and hospice fraud investigation. Acting U.S. Attorney Bill Essayli said the defendants, including three nurses, a chiropractor and a psychologist, were charged with defrauding the health care system out of more than $50 million.

Fraud in public services has become a thorny political issue as the Republican-led federal government focuses most attention on cases in Democratic states. 

"We are upholding as a priority, making sure that taxpayer dollars are going to healthcare services for the Medi-Cal members who rely on them," Sadwith said. "That requires partnership with the federal government. Right now, it is a challenging time between some states like California and our federal partners."  

Bonta said fraud is a problem that crosses partisan lines.

"It happens across all 50 states, red and blue, happens at the federal level, happens at the state level. California is not immune, and we are the biggest state, and we have some of the biggest levels of funding," he said.  

Dr. Mehmet Oz, administrator for the Centers for Medicare & Medicaid Services, said California Gov. Gavin Newsom is not a target, but "forty-nine states do not have the kinds of problems that Los Angeles County has." CBS News has requested interviews with Newsom on multiple occasions. 

In a statement, Newsom said: "For years, California has led the charge to protect public programs from fraud and abuse. We hold accountable to the fullest extent of the law anyone who tries to rip off taxpayers and take advantage of public programs, particularly those as sensitive as hospice care. I thank the Department of Health Care Services and the California DOJ's Department of Medi-Cal Fraud and Elder Abuse for their swift work to bring these charges forward."

Sadwith said the state continues to seek partnership with federal agencies "prioritizing this, allocating our resources, strengthening our systems, putting new safeguards in place to learn from what happened here and protect the program. So this never happens again."