Federal prosecutors have seized more than $2 million from the bank account of a Pasadena wound care clinic “suspected of embezzling millions of dollars from Medicare” through reimbursements for skin grafts that patients allegedly never received, federal officials announced Tuesday.
Working with the Department of Homeland Security investigation, the first U.S. attorney, Billy Essay, revealed that Expert Wound Care, which does business as St. Victoria Home Care, is the target of a federal investigation. The Pasadena-based clinic is charged with fraud, according to a seizure warrant affidavit filed by federal prosecutors on Monday and approved by a federal magistrate in Los Angeles.
According to an affidavit by a U.S. Secret Service agent in the investigation, the clinic received more than $34 million in federal payments, including claims from one patient totaling more than $6 million. Specialist Wound Care and its principals could not immediately be reached for comment on Tuesday.
No charges have been filed against the clinic principals and the investigation is ongoing.
The seizure is part of a larger investigation into Medicare-funded wound care by the Centers for Medicare & Medicaid Services (CMS). Dr. Mehmet Oz told The Times in an interview earlier this year that his agency was dealing with the issue of rampant fraud in the skin graft and wound care industry, where the agency was paying tens of dollars per square centimeter for treatments, and in some cases even for fake treatments.
Medicare reimburses providers for the use of skin substitutes for wound care. Skin substitutes are a group of biological and synthetic ingredients that enable temporary or permanent closure of wounds. They have structural and functional characteristics that closely resemble those of the skin.
These products have seen unprecedented growth in Medicare spending, rising from $256 million in 2019 to more than $10 billion in 2024, according to Medicare Part B claims data. In 2025, the CMS Fraud Defense Operations Center stopped approximately $185 million in improper payments to questionable providers billing for skin substitutes.
To reduce spending, CMS in January implemented a flat national reimbursement rate for products covered in both physician offices and hospital outpatient departments, which will save several billion dollars annually.
In the case of the Pasadena clinic, an affidavit written by Seth Tug, a US Secret Service agent, reveals that investigators believe the money “can be traced to the commission of a health care fraud crime and to a conspiracy to commit such crime”.
“A review of Medicare claims data revealed that between September 2025 and April 2026, Expert Wound Care PC submitted claims totaling approximately $46,621,769.37 to Medicare for skin substitute products and wound care services provided to seventy-eight (78) Medicare beneficiaries for dates of service between July 2025 and March 2026. He said Medicare has approved payments of $34 million on the claims.
Expert Wound Care’s Medicare bill increased sixfold from $4.975 million last July to nearly $33 million in December, according to the affidavit. One beneficiary alone paid $6,232,645.29 in bills to Medicare. On average, businesses were billed $299,639.45. per patient, according to CMS investigators and agents working with the Health and Human Services Office of Inspector General.
“There is probable cause to believe that, based on the national average of similar providers, Expert Wound Care PC electronically submitted claims to Medicare seeking reimbursement for skin substitutes and skin grafts, primarily Amchoplast and Tri-Membrane Wrap, that do not reflect the benefits actually provided to beneficiaries,” the agent’s affidavit said.
Investigators interviewed five of the clinic’s patients referred to Medicare seeking reimbursement for skin substitutes and skin grafts. They discovered that the listed Altadena Drive office was actually Victoria Home Care, which remained closed during the surveillance.
One patient, listed only as J.L., for whose treatment Specialist Wound Care was paid more than $2 million, told investigators that a man named Tony, a physician assistant, came three times a week to treat a flesh wound on his left calf, and that he had never heard of the company and did not recognize both physicians.
The patient’s sister-in-law told them that a nurse practitioner “came to JL’s home several times to treat meat infections” and “did not treat open wounds frequently because they were too infected.” The agent continued, “According to her notes, JL did not receive any in-home services in the month of December (despite the fact that twenty-seven claims were filed on her behalf for services allegedly provided in December.)”
The seizure from the Pasadena clinic is part of an ongoing investigation, Essaly said.
Oz said in an interview earlier this year that his investigators had examined widespread overspending on skin substitutes and identified that a relatively small number of physicians were connected to the issue, and that it would address their specific role in the authority while reducing reimbursement rates.
