Merida Group's owner, CEO and medical director sentenced over $150 million hospice fraud
From 2009 to 2018, the Merida Group, a health care company operating dozens of hospice and other locations across Texas, submitted more than $150 million in false and fraudulent Medicare claims. Marketers enrolled patients with long-term incurable conditions such as Alzheimer's and dementia, and people with limited mental capacity living in group homes, nursing homes and housing projects, falsely telling some they had less than six months to live. Medical directors were paid, contingent on certifying unqualified patients for hospice; medical director Jesus Virlar-Cadena personally certified over $18 million of the scheme's claims in exchange for kickbacks that included luxury trips and nightclub bottle service. A federal jury convicted owner Rodney Mesquias, CEO Henry McInnis and medical director Francisco Pena in October 2019. Mesquias was sentenced to 20 years and ordered to pay $120 million in restitution; McInnis was sentenced to 15 years; Pena died in custody before sentencing. Virlar-Cadena, who pleaded guilty separately, was sentenced in September 2023 to 50 months and ordered to pay $9 million in restitution and $9 million in forfeiture.
- Year
- 2023
- Where
- United States
- Outcome
- Sentenced
- Reported loss
- $150.0 million
- Victims
- 9,339
- Schemes
- Hospice fraud
- Last reviewed
- 2026-10-13
The facts, as recorded
- The Merida Group operated dozens of hospice and other health care locations across Texas and, from 2009 to 2018, submitted more than $150 million in false and fraudulent claims to Medicare for hospice and other health care services.
- Merida marketers enrolled patients with long-term incurable diseases such as Alzheimer's and dementia, and patients with limited mental capacity living in group homes, nursing homes and housing projects.
- In some instances, marketers falsely told patients they had less than six months to live, and the company sent chaplains to visit patients on the false pretense that they were near death.
- To bill Medicare, the Merida Group hired medical directors, including Jesus Virlar-Cadena, and made their fees contingent on an agreement to certify unqualified patients for hospice.
- In exchange for certifying over $18 million in unnecessary hospice services as part of the broader $150 million conspiracy, Virlar-Cadena received luxury trips and nightclub bottle service in addition to his regular medical director payments.
- A federal jury convicted owner Rodney Mesquias, chief executive Henry McInnis and medical director Francisco Pena in October 2019.
- Rodney Mesquias, 48 at the time of his sentencing, was sentenced to 20 years (240 months) in federal prison and ordered to pay $120 million in restitution; the scheme's total billings exceeded $152.7 million across 47,210 claims for 9,339 Medicare patients.
- Henry McInnis, the Merida Health Group chief executive, was sentenced to 15 years in federal prison.
- Francisco Pena, a co-defendant and medical director, died in custody in November 2020 while awaiting sentencing, after contracting COVID-19.
- Jesus Virlar-Cadena, 52, a San Antonio physician whose medical license was later suspended by the Texas Medical Board, pleaded guilty on June 4, 2019 and was sentenced on September 27, 2023 by US District Judge Rolando Olvera to 50 months in federal prison, one year of supervised release, $9 million in restitution and $9 million in forfeiture.
Why this case matters
This is the largest and most structured scheme documented on this page: not a single owner running one or two facilities, but a company with dozens of locations that built kickback-for-certification into its medical directors’ pay, and recruited specifically from group homes and housing projects where patients were least likely to object or be checked on by family.
Four defendants, four different outcomes
The owner, the CEO, the medical director who went to trial, and the medical director who pleaded guilty separately all ended up with different sentences, from 50 months to 20 years, roughly in proportion to their role and how directly each profited. Pena’s death in custody before sentencing is a reminder that a conviction and a final sentence are not always the same event.
A kickback that wasn’t cash
Virlar-Cadena’s kickback took the form of luxury trips and nightclub bottle service rather than a direct cash payment, on top of his regular medical director fee. Prosecutors treated that the same as a cash kickback: the thing of value, not its form, is what the anti-kickback law and the health care fraud charges turned on.
The caveat
All four people named in this case were convicted, either by a federal jury in October 2019 or, in Virlar-Cadena’s case, by his own guilty plea, and three have been sentenced; Pena died before sentencing could occur. The facts above, including every dollar figure, come from the Justice Department’s own account of the trial evidence, the guilty plea and the sentences imposed, not from an unproven accusation.
People named in the public record
- Rodney Mesquias · convicted
Sources
- Hospice medical director sentenced for $150M hospice fraud scheme. US Attorney's Office, Southern District of Texas. Accessed 2026-10-13. Supports: The Merida Group's dozens of Texas locations, the 2009 to 2018 scheme period, the $150 million in fraudulent claims, the patient recruitment from group homes, nursing homes and housing projects, the false six-month-prognosis claims and chaplain visits, the medical-director kickback arrangement, Virlar-Cadena's age, guilty plea date, sentence, restitution and forfeiture, his suspended medical license, Pena's death, and Mesquias's and McInnis's prior 20-year and 15-year sentences.
- Hospice fraudster sentenced to 20 years, must pay $120 million in restitution. AARP. Accessed 2026-10-13. Supports: Rodney Mesquias's age, his 20-year sentence and $120 million restitution order, the $152.7 million total billings across 47,210 claims for 9,339 Medicare patients, and Francisco Pena's death in custody after contracting COVID-19.
- Merida CEO Sentenced to 15 Years for Hospice Fraud. Hospice News. Accessed 2026-10-13. Supports: Henry McInnis's role as Merida Health Group's chief executive, his 15-year sentence, the approximately $154 million scheme total, and his convictions for conspiracy to commit health care fraud and conspiracy to commit money laundering.