California's corruption problem is finally getting the attention it deserves.
The Golden State has been a black hole for taxpayer dollars for years.
And JD Vance's new job has Gavin Newsom sweating bullets.
Trump taps Vance to lead sweeping fraud investigation
Vice President JD Vance is about to make Gavin Newsom's life very uncomfortable.
President Trump is expected to sign an executive order in the coming days naming Vance chairman of a new White House task force targeting fraud in California and other states.
Andrew Ferguson, chairman of the Federal Trade Commission, will serve as vice chairman and handle the day-to-day operations.
The task force will operate separately from a Justice Department effort led by Colin McDonald, Trump's nominee for a new fraud investigation role at DOJ.
McDonald will also investigate massive fraud uncovered in Minnesota by independent journalists.
California's getting hit from both sides.
California's pandemic fraud reached $32 billion while families struggled
The numbers are staggering.
California lost an estimated $32.6 billion in fraudulent unemployment payments during the pandemic — potentially one-third of the entire nation's unemployment insurance fraud.
While California families watched their businesses shut down and struggled to feed their kids during Newsom's lockdowns, criminal syndicates were living large on stolen taxpayer money.
State officials claim it was only $20 billion, but independent analysts say they're lowballing it by more than $12 billion.
Former EDD director Rita Saenz admitted in 2021 that $20 billion went to fraudsters, but the department has stonewalled requests for updated figures ever since.
One LexisNexis executive did his own math using EDD's reported fraud rates and came up with $32.6 billion.
The state paid out $177 billion during the pandemic.
Criminal syndicates flooded the system with fake claims using stolen Social Security numbers purchased on the dark web.
Here's the sick part: EDD made it easier for scammers to apply than for real workers to get help.
California suspended basic fraud-checking safeguards despite federal warnings that these protections "must be adhered to" and were "critical to operations."
As few as 1 in 1,000 people calling EDD for help got through to a human.
But criminals sailed right through.
The state hired former federal prosecutor McGregor Scott as special fraud counsel to coordinate investigations.
Scott's task force has helped arrest more than 500 people and secured 203 convictions.
They've recovered $1.1 billion by freezing fraudulent EDD debit cards.
But Scott admits billions will never be recovered.
One EDD employee, Gabriela Llerenas, filed 197 fraudulent claims and pocketed more than $1.6 million before getting caught.
She'd already been convicted in 2002 for a disability benefits fraud scheme.
California rehired her anyway.
Another EDD employee, Regina Brice, manipulated $858,339 in fraudulent claims between July 2020 and May 2021.
She instructed California prison inmates on how to bypass the system's fraud detection software.
Los Angeles hospice fraud hits $3.5 billion
The Medicare fraud in Los Angeles County makes the unemployment scandal look like pocket change.
Dr. Mehmet Oz, head of the Centers for Medicare and Medicaid Services, visited LA County last week to expose the problem.
Los Angeles County has nearly 2,000 licensed hospice agencies.
That's more than 36 states combined and roughly 30 times the number in Florida or New York.
One physician in California reportedly billed the government $120 million in a single year while claiming oversight of 1,900 patients.
That's physically impossible — but it happened anyway because nobody was watching.
"Hospice is crazy here," Dr. Oz said.
"You've got hospice that's grown seven-fold in the last five years. They represent about three and a half billion dollars of fraud, we believe, just in LA County."
Eighteen percent of the entire nation's home health and hospice Medicare billing comes from Los Angeles County alone.
Recruiters hit shopping centers and senior centers signing up Medicare beneficiaries by promising them walkers, nutritional drinks, cash, and weekly visits.
They sell those Medicare numbers for $1,000 to $3,000 each and get a cut for every month the senior stays enrolled.
Hospice enrollees are supposed to be terminally ill with six months or less to live.
But fraudulent operators treat patients like trading cards, moving them between providers to avoid auditor red flags.
More than 50% of hospice patients nationwide die within 18 days or less.
California's numbers don't match up.
California Attorney General Rob Bonta called it an epidemic but Newsom's response has been pathetic.
The state implemented a licensing moratorium in 2022 and revoked more than 280 hospice licenses.
But the fraud kept growing because California didn't address the root problem.
Now Trump's bringing in the big guns.
Newsom's so desperate he's hiding behind bogus racism claims
Gavin Newsom knows he's in trouble.
His first response to federal scrutiny was accusing Dr. Oz of racism.
Newsom filed a civil rights complaint after Dr. Oz posted a video standing in front of Armenian businesses in Van Nuys while discussing the $3.5 billion in hospice fraud.
Oz mentioned that "quite a bit of it" was run by "the Russian Armenian mafia."
Newsom immediately cried racial profiling and demanded a civil rights investigation.
Senate Democrat Adam Schiff joined the pile-on, calling Oz's comments "racist and baseless."
This is Newsom's playbook: when caught red-handed, scream racism and hope nobody notices the billions disappearing into thin air.
Dr. Oz was pointing to specific addresses where dozens of shell companies operate from single locations.
That's not racial profiling — that's following the evidence.
California's been sitting on this fraud for years while Newsom played resistance hero against Trump.
Now he's desperately trying to change the subject by making it about ethnicity instead of billions in stolen taxpayer money.
The Centers for Medicare and Medicaid Services sent Newsom a formal letter demanding a comprehensive action plan within three weeks.
House Republicans scheduled a hearing for February 3 titled "Common Schemes, Real Harm" to examine how transnational crime organizations infiltrated Medicare.
Vance's task force will have full White House backing to dig into every corner of California's fraud problem.
Newsom can cry racism all he wants — the evidence doesn't care about his feelings.
Trump's making California's corruption a national priority, and Vance is exactly the right person to lead this fight.
The Vice President cut his teeth taking on corporate corruption in the Rust Belt.
He knows how these schemes work and he's not afraid to follow the money wherever it leads.
For years, California has operated like its own corrupt little kingdom where billions vanish and nobody faces consequences.
Those days just ended.
Sources:
- CBS News, "Trump anti-fraud task force targeting California and more states to be led by JD Vance, sources say," February 4, 2026.
- California State Auditor, "2025 State High-Risk Audit Program," December 18, 2025.
- KCRA 3, "Analysis shows California EDD fraud at $32.6 billion and counting," October 6, 2022.
- U.S. Senate Committee on Finance, "Crapo, Cassidy Demand Transparency on DOL's New Policy Forgiving $32 Billion to Unemployment Insurance Fraud," May 8, 2024.
- Fox News, "Los Angeles hospice fraud a $3.5 billion scam epidemic, Dr. Oz says," January 2026.
- Hospice News, "CMS, DOJ 'Aggressively' Cracking Down on Hospice Fraud," January 12, 2026.
- STAT News, "Gavin Newsom files civil rights complaint against CMS' Dr. Oz," January 30, 2026.
