Governor Gavin Newsom announced a major law enforcement crackdown on a transnational hospice fraud network on Thursday, a move that comes amid escalating pressure following a series of investigative reports detailing systemic vulnerabilities and multi-billion-dollar losses within California’s social safety net.
The joint enforcement action, led by the California Department of Health Care Services (DHCS) and the state’s Department of Justice, has brought criminal charges against organized crime groups accused of using stolen identities to defraud the Medi-Cal hospice system of more than $267 million.
Officials stated the scheme involved 14 fraudulent providers who billed for services that were never provided to patients who, in many cases, were unaware they had even been enrolled.
The timing of the announcement follows high-profile exposés by investigative journalist Christopher Rufo in City Journal, who has characterized the state under Newsom’s tenure as an “empire of fraud.”
Rufo’s reports allege that the scale of taxpayer theft in California is far more extensive than previously acknowledged, with experts and federal officials estimating total losses between $180 billion and $280 billion across various state programs since 2019.
The specific hospice crackdown targeted “transnational criminal networks” that exploited identity theft to facilitate fraudulent billing. Newsom framed the state’s action as a decisive stand to protect the “sick and vulnerable” and explicitly contrasted California’s enforcement with federal policy, noting that state-level charges ensure defendants cannot be pardoned by U.S. President Donald Trump.
Newsom questioned the sincerity of Trump’s moves to clamp down on fraud given he has previously pardoned some who have been convicted of fraud-related crimes.
The California Governor also pushed back on the notion that he has not done enough to deal with the real problems with state officials reporting that they have revoked over 280 hospice licenses in the past two years and currently have an additional 300 providers under investigation.
To prevent future abuse, the state has implemented a moratorium on new hospice licenses and updated system safeguards to require verified authorization forms before payments are released.
While the governor highlighted recent successes in hospice enforcement, critics argue these actions address only a fraction of a much larger crisis. Rufo’s investigation identifies three primary engines of fraud: unemployment insurance, the In-Home Supportive Services (IHSS) program, and homelessness initiatives.
The reports highlight the state’s Employment Development Department (EDD), which became a global target for scammers during the COVID-19 pandemic.
While the state admitted to approximately $20 billion in fraudulent payouts, some experts estimate the true loss at over $32 billion. Notable cases included a rapper bragging about the scam on YouTube and hundreds of millions of dollars paid out in the names of state prisoners, including at least 133 inmates on death row.
Further allegations focus on the $30 billion IHSS program, which pays caregivers to support the elderly and disabled. Rufo describes the program as a “fraud magnet” because it operates largely on an honor system, with 70% of providers being family members and state regulations explicitly prohibiting random, unannounced home visits. Fraud specialists estimate that 20% to 40% of IHSS spending—up to $12 billion annually—is lost to scammers.
The allegations have also touched the upper echelons of Newsom’s administration. In late 2025, the governor’s former chief of staff, Dana Williamson, was charged with fraud for allegedly siphoning campaign and COVID-19 recovery funds. While Newsom’s office placed her on leave after learning of the investigation, her subsequent departure was marked by a laudatory message from the governor that omitted any mention of the criminal charges.
Rufo’s reports further suggest a “self-reinforcing system” where powerful home-care unions, such as SEIU Local 2015 and United Domestic Workers (UDW), collect over $149 million in membership dues from the IHSS workforce and funnel millions into Democratic political campaigns. The reports include allegations from workers claiming they were coerced into union memberships under duress.
Administration Response
Newsom’s office has reacted with sharp denials to the broader “Empire of Fraud” claims. A spokesperson for the governor strikingly labeled the $180 billion estimate “utter bulls—,” accusing critics and the federal government of “making up numbers.” The administration maintains that it has been proactive for years, citing the ongoing moratorium on hospice licenses as evidence of its commitment to integrity.
The conflict has drawn the attention of Washington, where federal prosecutors have established a task force to combat corruption in California’s $24 billion homelessness programs. Vice President J.D. Vance, acting as a “fraud czar” for the Trump administration, has signaled that California’s benefit programs will remain a primary focus for federal oversight.
As the state prepares its next budget—which includes a requested $1.1 billion increase for the IHSS program—the debate over oversight continues to intensify.
For many observers, the hospice crackdown represents a high-stakes attempt by the Newsom administration to reclaim the narrative of fiscal stewardship in the face of mounting evidence of historic taxpayer loss.