The founder of Passages Hospice in Illinois is charged with health care fraud. Accused of scheming the federal government out of millions. Company shuts down. Employees waiting to be paid.

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SWANSEA, Ill. - The founder of an Illinois hospice company faces federal charges for Medicare and Medicaid fraud. Now employees are left scrambling.

U.S. Attorneys filed a 70 page criminal complaint filed against Seth Gillman, one of the owners of Passages Hospice. Red flags went up when monthly payouts for in-patient hospice care jumped from $4,400 from 2006 to 2008, to more than $946,000 in 2011.

Gillman, of Lincolnwood, Ill., founded Passages Hospice in 2005. He's one of four owners. The charges came down in January.

"That's the worst thing we could hear," said Debra Walters.

Walters worked at Passages for three years. Her boss is accused of stealing millions from Medicare and Medicaid by billing them for more in-patient hospice days than the patients needed between 2008 and 2012.

"Not a better company to work for. Not a more caring boss. And above all other, what he's accused of, we know him as loving caring, considerate, and compassionate and taking care of his employees," she said.

"Just all lies. He fraudulently lied to us from day one just to scheme the system, and I don't think that's right," said Laura Baldwin-Meyer.

Baldwin-Meyer tells us corporate told them in an email Sunday they were still fully functional. But they heard a different story from patients.

"We walk into homes and they're like 'what are you all doing here? They called us and said y'all were shut down," she said.

She says corporate transferred patients out of their care earlier this week, and waited until Friday to tell them their office was shutting down. It was supposed to be payday.

"How I'm supposed to feed my family? No check, no money, bills due and everything," Baldwin-Meyer said.

In a separate email to employees, Passages says they have processed payroll, but have to get authorization before paying the now former employees.

We left a message for the media rep for Passages, but did not hear back before this story went to air.

Seth Gillman is also accused of paying out hundreds of thousands of dollars in bonuses to the managers who helped push people to in-patient care.

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