Passages Hospice Owner Seth Gillman and Director Angela Armenta Sentenced in Medicare Hospice Fraud

Case from 2014–2018 (U.S. Attorney's Office latest release: March 9, 2016; later developments are from court records and other sources cited below). Published on Scammers.com Oct. 16, 2026; case status is current as of that date.

Seven defendants, including Lisle-based Passages Hospice LLC itself, were convicted in a federal investigation into a scheme to bill Medicare and Medicaid for high-level hospice care that patients did not need, prosecutors announced in March 2016 [1]. Angela Armenta, the company's director of certified nursing assistants for the Chicago region, was the only defendant to go to trial. A jury convicted her on three counts of health care fraud [1] [4].

Outcome: U.S. District Judge Thomas M. Durkin sentenced co-owner Seth Gillman on March 7, 2017, to 6½ years in prison, the Chicago Tribune reported. Gillman also agreed to an $18 million civil judgment and $9 million in restitution to Medicare [3]. Armenta was sentenced to 20 months in prison, two years of supervised release and $1.67 million in restitution. The U.S. Court of Appeals for the Seventh Circuit affirmed her conviction and sentence on March 5, 2018 [4].

How the scheme worked

According to the 2014 indictment and the 2016 trial, as described by prosecutors and the Seventh Circuit [1] [2] [4]:

1. Two price levels: Medicare paid about $180 per patient per day for routine hospice care but up to $700 for "general inpatient" (GIP) care.
2. Bonuses for upgrades: Passages paid directors bonuses based on the number of patients placed on GIP. Prosecutors said Armenta received more than $300,000 in such bonuses from 2009 to 2012.
3. Ignoring the rules: Witnesses testified that Armenta told nurses to disregard training on proper GIP requirements.
4. Patients who weren't dying: The indictment alleged Passages billed for care for some patients who were not terminally ill or who stayed enrolled far longer than the six-month life expectancy hospice requires.
5. Doctored files: After a Medicare contractor requested patient files in 2009, employees including Armenta entered false information into the files before they were submitted, the Seventh Circuit said.

Between August 2008 and January 2012, Passages received more than $90 million in Medicare payments, including more than $20 million billed as GIP care, according to prosecutors [2]. Gillman admitted in his plea agreement that he set up the bonus system [1].

The people convicted

Seth Gillman, of Lincolnwood (47 at plea), co-owner and coadministrator

• Charges: arrested on a complaint in January 2014; indicted May 2014 on 16 counts of health care fraud and one count of conspiracy to obstruct a federal audit [2].
• Plea (February 2016): guilty to one count of health care fraud [1].
• Sentence (March 7, 2017): 6½ years in prison. Prosecutors had asked for 10 years [3].

Angela Armenta, of Wheeling (35 at conviction), director of certified nursing assistants

• Verdict (March 8, 2016): guilty on three counts of health care fraud after a seven-day trial [1].
• Sentence (2017): 20 months, two years of supervised release and $1.67 million in restitution, including a two-level enhancement for obstruction of justice for altering and creating patient files [4].
• Appeal: affirmed, United States v. Armenta, No. 17-2296 (7th Cir. March 5, 2018) [4].

Other defendants who pleaded guilty, according to prosecutors [1]:

• Passages Hospice LLC, the company.
• Gwen Hilsabeck, of Pontiac (49), former administrator.
• Carmen Velez, of Palatine (36), former director of clinical services.
• Julie Parker, of Shorewood (56), former compliance officer.
• Leroy Moore, of Shorewood (49), former head of marketing, who admitted offering gifts such as event tickets, televisions and gift cards to nursing-home staff to get patient referrals.

We did not find the sentences of these five defendants in the sources we reviewed.

The investigation was carried out by the Medicare Fraud Strike Force, with the HHS Office of Inspector General and FBI Chicago [1].

Red flags for families

• A hospice that pushes enrollment for someone whose doctor hasn't said they have six months or less to live.
• Talk of "crisis" or inpatient-level care when nothing about your relative's condition has changed.
• Gifts or perks to nursing-home staff from a hospice company.
• Medicare Summary Notices showing inpatient hospice days you weren't told about.

What to do if you're concerned

1. Ask the hospice and attending doctor to explain, in writing, the diagnosis and the level of care being billed.
2. Review Medicare Summary Notices or check claims at Medicare.gov.
3. Report suspected hospice fraud to the HHS-OIG hotline at 1-800-HHS-TIPS.

Case status (as of Oct. 16, 2026)

Defendant	Court	Status as of Oct. 16, 2026	Source
Seth Gillman, Lincolnwood	N.D. Ill. (Judge Durkin)	Pleaded guilty February 2016 to health care fraud; sentenced March 7, 2017, to 6½ years; agreed to $18 million civil judgment and $9 million restitution	[1], [3]
Angela Armenta, Wheeling	N.D. Ill. (Judge Durkin)	Convicted by jury March 8, 2016, on 3 counts; sentenced to 20 months and $1.67 million restitution; affirmed March 5, 2018	[1], [4]
Passages Hospice LLC; Gwen Hilsabeck; Carmen Velez; Julie Parker; Leroy Moore	N.D. Ill. (Judge Durkin)	Pleaded guilty, according to prosecutors (as of March 2016); sentences not found	[1]

Sources

1. U.S. Attorney's Office, Northern District of Illinois, "Director of Lisle-Based Hospice Company Convicted in Scheme to Fraudulently Bill Medicare for Medically Unnecessary Services," March 9, 2016. https://www.justice.gov/usao-ndil/pr/director-lisle-based-hospice-company-convicted-scheme-fraudulently-bill-medicare-0
2. U.S. Attorney's Office, Northern District of Illinois, "Illinois Hospice Executive, Three Former Employees And Company Indicted For Allegedly Falsely Elevating Level Of Patients' Care," May 27, 2014. https://www.justice.gov/usao-ndil/pr/illinois-hospice-executive-three-former-employees-and-company-indicted-allegedly
3. David Jackson and Gary Marx, "Hospice CEO gets 6 1/2 years for fraud scheme," Chicago Tribune, March 7, 2017. https://www.chicagotribune.com/2017/03/07/hospice-ceo-gets-6-12-years-for-fraud-scheme/
4. U.S. Court of Appeals for the Seventh Circuit, United States v. Armenta, No. 17-2296, decided March 5, 2018 (via Justia). https://law.justia.com/cases/federal/appellate-courts/ca7/17-2296/17-2296-2018-03-05.html

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