California Governor Gavin Newsom has filed a civil rights complaint against Dr. Mehmet Oz, the administrator for the Centers for Medicare and Medicaid Services (CMS), following allegations that Oz targeted the Armenian American community with “baseless and racist” claims of healthcare fraud.
The dispute centers on a video posted to official social media accounts by Oz, which alleges that approximately $3.5 billion in hospice and home care fraud has been perpetrated in Los Angeles. In the footage, Oz is seen in front of an Armenian bakery in the Van Nuys neighborhood, where he asserts that the “Russian Armenian mafia” runs much of the illegal activity. He specifically points to the Armenian lettering on the signage as evidence that the business is part of an “organized crime mafia deal.”
Newsom’s office filed the complaint with the Department of Health and Human Services on Thursday, arguing that the federal official’s “racially charged” statements seriously risk chilling participation in critical healthcare programs by the communities targeted.
The complaint further states that the claims have already caused “real-world harm,” citing a report from the bakery’s owner, Movses Bislamyan, who saw a 30% drop in business the day after the video was posted.
Oz has pushed back against the criticism, claiming that California is the “epicenter” of a healthcare fraud crisis. “If there were a real defense for California’s fraud crisis, we’d hear it,” Oz stated on social media, adding that his agency and law enforcement would continue their work “going after fraudsters, period.”
The friction between Newsom and Oz marks a new front in the ongoing political feud between the California governor and the Trump administration. The White House has recently launched national efforts to highlight allegations of federal funding fraud in Democratic-led states, including New York and Minnesota.
While the state acknowledges issues within the hospice industry, Newsom’s office noted that California has been aggressively investigating healthcare fraud for years.
Armenian American leaders have condemned Oz’s rhetoric as destructive. Aram Hamparian, executive director of the Armenian National Committee of America, accused Oz of “staging the theatric collective indictment of all Armenians” and using “easy stereotypes” against a community that has deep roots in Los Angeles.
The controversy occurs as Oz, whose parents emigrated from Turkey, oversees federal programs that certify hospice providers for government-subsidized insurance. His comments have drawn particular scrutiny given the historic sensitivities and grievances between Turkey and the Armenian community.
According to the Los Angeles Times, California has been investigating healthcare fraud since a 2020 report by the newspaper that uncovered widespread Medicare fraud in the state’s booming but loosely regulated hospice industry.
The county’s hospices multiplied sixfold between 2010 and 2020 accounting for more than half of the state’s roughly 1,200 Medicare-certified providers, according to a Times analysis of federal healthcare data.
The highest concentration of hospices in the entire United States is found in the corridor stretching west from the San Gabriel Valley through the San Fernando Valley.
Since 2021 the state Department of Justice has charged 109 people with hospice-related fraud and filed 24 civil suits related to hospice fraud.
The Times added that in the last two years, 280 hospices have been shuttered with their licenses revoked, according to data from the California Department of Public Health.