Politics
Real, fake or overblown? Sorting fact from fiction in fraud allegations surrounding Newsom, California
SACRAMENTO — The year opened with President Trump declaring that “the fraud investigation of California has begun,” a move that quickly set off a barrage of allegations from his administration and Republican allies questioning the integrity of state programs and the leadership of Gov. Gavin Newsom.
The accusations, amplified across social media and conservative outlets, have pushed California and its Democratic leadership to the center of a broader national political fight over waste, fraud and abuse.
Newsom has dismissed the claims as politically driven, arguing that the administration is singling out Democratic-led states while ignoring similar problems elsewhere. The governor also responded by highlighting fraud cases in Republican-led states and by criticizing Trump’s own record and business dealings.
Against that backdrop, it has become increasingly difficult to separate substantiated fraud from fabricated or recycled claims, to distinguish old findings from newly raised allegations and to determine who can credibly claim credit for uncovering wrongdoing — all amid a toxic and deeply polarized political climate.
Dan Schnur, who teaches political communications at USC and UC Berkeley, said allegations of malfeasance in California is a particularly ripe target for Republicans because Democrats have controlled the state Legislature and governor’s office for years.
Democrats hold a supermajority in both the Assembly and the Senate, meaning they hold at least two-thirds of seats in both houses, and not a single Republican has been elected to statewide office in California since 2006, when Gov. Arnold Schwarzenegger and Insurance Commissioner Steve Poizner were reelected.
“There is no shared responsibility here for Republicans,” Schnur said. “If you had a state in which Republicans were actually competitive, they would bear some responsibility for these problems.”
Audits and prosecutions show that California has experienced its share of fraud, particularly in complex programs involving emergency aid, healthcare and unemployment insurance. The state paid out billions of dollars in fraudulent unemployment claims during the COVID-19 pandemic, and the California State Auditor has issued repeated warnings about state agencies that are “at high risk for waste, fraud, abuse, or mismanagement.”
Along with recycling a barrage of years-old allegations of financial malfeasance in California and other Democratic states, the Trump administration elevated claims of child-care fraud in Minnesota last month, prompting Gov. Tim Walz to drop his reelection plans to focus on the growing political crisis in his state.
Fraud allegations are increasingly being deployed as a political weapon against Newsom, a leading Trump critic and a potential 2028 Democratic presidential contender. Politicians have always railed against government waste, fraud and abuse, but now those issues are being “weaponized into a partisan issue,” Schnur said.
For the public, it can be hard to discern the truth. Here is a look at three of the central fraud allegations — and what the evidence shows.
Child-care funding
President Trump used his social media platform, Truth Social, to accuse California of widespread fraud last month, drawing a link between his administration’s investigation into child-care spending in Minnesota and programs in the Golden State, and announcing a major federal “fraud investigation” into the state’s actions.
“California, under Governor Gavin Newscum, is more corrupt than Minnesota, if that’s possible???” wrote Trump, using a disparaging nickname for the governor.
The Trump administration then moved to freeze $10 billion in federal funding for child care in five Democrat-led states — California, New York, Colorado, Illinois and Minnesota — over “serious concerns about widespread fraud and misuse of taxpayer dollars.”
In a trio of Jan. 6 letters addressed to Newsom, the U.S. Department of Health and Human Services said it was concerned there had been “potential for extensive and systemic fraud” in child care and other social services programs that rely on federal funding, and had “reason to believe” that the state was “illicitly providing illegal aliens” with benefits.
The letters did not detail evidence to support the claims. The governor’s office dismissed the accusation as “deranged.”
A federal judge subsequently blocked the Trump administration temporarily from freezing those funds. In that ruling, U.S. District Judge Vernon Broderick said he didn’t understand why the government was making it harder for states to access child-care money before any wrongdoing had been discovered.
“It just seems like the cart before the horse,” he said.
Hospice funding
Days after Trump’s social media post about alleged corruption under Newsom’s watch, Dr. Mehmet Oz, administrator for the Centers for Medicare & Medicaid Services, and Bill Essayli, the top federal prosecutor in Los Angeles, held a joint news conference on public benefits fraud, but offered few details about the scope of their investigation.
The officials accused “foreign actors” of draining billions from public healthcare programs in California, referencing bogus hospice providers first exposed by The Times in 2020 and later investigated by California Atty. Gen. Rob Bonta.
Essayli placed the blame for bad actors squarely on Newsom, calling him “the fraud king.”
Weeks later, Oz released a video of himself walking in the Los Angeles neighborhood of Van Nuys as he questioned why dozens of alleged hospices were operating along four blocks. He blamed the “Russian Armenian Mafia” and made his remarks while pointing to an Armenian bakery, prompting accusations of racism from the Armenian community.
Newsom’s office last week hit back by highlighting state efforts to fight fraud, while pointing to a 2025 Axios story on the Trump administration’s decision to pause a federal program to crack down on bad hospice operators.
Bonta’s office said it has filed criminal charges against 109 individuals over hospice fraud-related offenses and launched dozens of civil investigations.
Newsom, speaking at a Bloomberg event Thursday in San Francisco, said the allegations have been recycled and misrepresented. Later that day, he filed a civil rights complaint against “baseless and racist allegations against Armenian Americans in California” made by Oz.
“Hospice, we’ve been after that for years and years before Oz was even on the scene,” Newsom said. “In 2021, we did a moratorium on new hospice programs, 280 we shuttered.”
The Center for Medicare & Medicaid Services said earlier this year that — in addition to California — Arizona, Nevada, Texas, Ohio and Georgia are being monitored following allegations of fraud and waste.
EDD fraud
The state’s Employment Development Department, known as EDD, reported in 2021 that approximately $20 billion was lost due to fraud, largely in the federal Pandemic Unemployment Assistance (PUA) program.
While unemployment fraud was rampant across country during the pandemic as governments rushed to provide support, California’s problems stood out.
The state itself admitted in 2021 that it failed to take precautions that had been implemented in other states, including using software to identify suspicious applications and cross-checking benefit claims against personal data on state prison inmates.
Rep. Kevin Kiley (R-Rocklin) said department mismanagement and fraud often overlap and cited EDD as a prime example.
“When there is a lack of internal controls, a lack of diligence of how funds are used, that makes it easier for those who want to take advantage of the system to profit,” Kiley said.
EDD’s own tracker said the state has recovered more than $6 billion in stolen funds and opened more than 2,300 unemployment fraud investigations since the pandemic began, leading to nearly 1,000 arrests and more than 670 convictions.
The department said it has expanded fraud enforcement through partnerships with law enforcement, new identity-verification technology and a dedicated fraud task force.
But, reports of mismanagement at EDD have continued. A recent audit also found EDD wasted $4.6 million by paying monthly service fees for more than 6,200 cellphones that went unused for at least four consecutive months between November 2020 and April 2025 — including some devices that were inactive for more than four years.
At the same time, “EDD continues to have high rates of improper [unemployed insured] payments, including fraudulent payments, and it needs to improve the customer service it provides to UI claimants,” another report found.
What’s next?
Newsom said there is a reason the Trump administration is not pointing to fraud in Republican-led states.
“This is about polarization, politicalization, weaponization,” Newsom said Thursday.
Asked what the Trump administration will discover in probing California for fraud, Newsom said investigators will find a state “taking that issue very, very seriously.”
“We absolutely are here to be a partner, to go after waste, fraud and abuse,” Newsom said.
State audits show vulnerabilities persist. The California State Auditor has repeatedly flagged Medi-Cal eligibility discrepancies that have exposed the state to billions of dollars in questionable payments, while also warning that weaknesses in information security across state agencies remain a high-risk issue.
Curtailing waste could be particularly important during the upcoming year as California and its state-funded programs head into a period of volatile fiscal uncertainty, driven largely by events in Washington and on Wall Street. Newsom’s own optimistic budget proposal projects a $3-billion state deficit for the next fiscal year despite no major new spending initiatives.
The nonpartisan Legislative Analyst’s Office warned in November that California faces a nearly $18-billion budget shortfall.
It will also be a key issue in upcoming elections. A group of Republicans running for statewide offices, including California gubernatorial candidate Steve Hilton, pegged that the state’s annual estimate of fraud, waste and abuse across state programs at $250 billion, an estimate that includes unverified public tips submitted to a campaign-run website.
The group cited the estimate as justification for creating their own “California Department of Government Efficiency,” or CAL DOGE, a nod to a similarly named federal initiative promoted by Elon Musk that generated headlines but has not produced documented savings or formal audit findings. CAL DOGE is not currently a state department, despite its name.
Who deserves credit when fraud is prosecuted has also become a point of contention. After a man was arrested last month for fleecing L.A.’s homeless services program for $23 million, critics of Newsom were quick to blame the governor. Newsom responded by saying the case was uncovered by local investigators working with law enforcement, which he added is “exactly the kind of accountability and oversight the state has pushed for.” (The Los Angeles district attorney’s office ran a parallel, independent investigation.)
Essayli responded on social media by saying no one made an arrest until Trump and Atty. Gen. Pam Bondi “appointed me to investigate and charge fraud offenses in California.”
Kiley, the California Republican congressman, said despite the partisan fighting over fraud, the issue should rally both parties.
The “easiest” way to solve the state’s budget problems and improve government services for taxpayers is to “minimize and eventually eliminate fraud,” said Kiley.
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Political heavyweight Dana White, whose endorsement of President Donald Trump was instrumental in his 2024 victory, is now hinting that he may jump back into presidential politics in 2028 because he has “become really close” with Secretary of State Marco Rubio.
This comes as White’s UFC announced a rare “sports diplomacy” partnership with the State Department this week. White and Rubio signed a memorandum of understanding establishing the partnership last month, according to a UFC statement. The league said that as part of the agreement, UFC athletes and coaches will serve as “sports ambassadors” for young athletes around the world through the State Department’s Sports Envoy Program.
White was explicitly asked by OutKick’s Tomi Lahren, whether there are any leaders he is looking at for 2028, to which he responded, “It’s funny, As I was, leading up to the White House fight, doing all this media, you know, a lot of the left media was saying to me, ‘So, you’re out of politics after this, right?’ And I can’t remember who it was that I said it to but … I said, ‘I’ve become really close to Rubio.’ We’ve become really close.”
“People are asking me if I’m going to get out of politics when the president leaves and I just said, ‘I’ve become very close to Rubio.’ He and I have become friends,” he emphasized.
RUBIO ANNOUNCES FRAMEWORK DEAL BETWEEN ISRAEL AND LEBANON AS EXPERTS WARN IRAN WILL FIGHT TO SABOTAGE IT
UFC President and CEO Dana White and US Secretary of State Marco Rubio shake hands as htey participate in a Memorandum of Understanding signing ceremony at the State Department in Washington, DC, on June 11, 2026. (Brendan SMIALOWSKI / AFP via Getty Images)
White said that Rubio “is a great guy, I like him,” adding, “He’s smart, I like the way he handles himself.”
He also said, “I’ve met his sons, and I like his kids and, you know, so, never say never.”
Pressed on whether Rubio is his official pick to succeed Trump as president, White clarified, “I’m not saying I’m picking.” He noted that he also likes Vice President JD Vance, who, alongside Rubio, is a rumored 2028 presidential frontrunner.
“JD is a great guy too,” said White, adding, “It’s a tricky situation, and I don’t know enough about politics to even comment on that, but, yeah, I don’t know, but it’s not a bad thing to have two strong candidates.”
Rubio and Vance are the two Republicans most discussed as possible successors to Trump. While Rubio ran for president in 2016, he has expressed support for Vance, calling him a “close friend” and saying the vice president “would be a great nominee if he decides he wants to do that.”
VIRAL MARCO RUBIO CLIP ON HIS VISION FOR AMERICA SPARKS MORE 2028 SPECULATION
Vice President JD Vance speaks during a visit to ALTA Refrigeration Inc., Aug. 21, 2025, in Peachtree City, Georgia. (Brynn Anderson/The Associated Press)
Though White stopped short of issuing a full-throated endorsement of Rubio, his partnership with the State Department through UFC underscores the high regard he appears to have for the secretary.
This is the first time the UFC has entered into such a partnership with the State Department. The NFL, which entered into a similar agreement in January, is the only other major sports organization to have signed such a formal agreement with the department.
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UFC Chief Operating Officer Lawrence Epstein said the league is “thrilled” about the partnership. He said it would allow the State Department and UFC to “work together to build bridges through community engagement.”
“We’re excited to join this program, led by Secretary Rubio, as UFC is a truly global organization with athletes representing 75 countries. We can’t wait to get started later this year,” said Epstein.
VANCE TAKES LEAD SELLING TRUMP’S IRAN GAMBLE AS RUBIO, HEGSETH AND RATCLIFFE CEDE SPOTLIGHT ON FRAGILE DEAL
President Donald Trump speaks with Secretary of State Marco Rubio and UFC CEO and President Dana White during UFC 327 at Kaseya Center on April 11, 2026 in Miami, Florida. (Julia Demaree Nikhinson – Pool / Getty Images)
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In turn, Rubio spoke very highly of the UFC, saying it “has become a global phenomenon by embracing values that resonate far beyond the Octagon: excellence, discipline, opportunity, and meritocracy.”
The secretary said the State Department is “proud” to launch the sports diplomacy partnership with UFC and to “continue growing the sport of MMA.”
Politics
Commentary: On Skid Row, it’s been decades of frustration. Will the next mayor have a plan?
On my way through Skid Row to meet up with Estela Lopez, things looked pretty much as they did when I spent time there more than 20 years ago and first heard the promises that things would be better soon.
Tents lined some of the sidewalks, making them unpassable. Some people wore the damage of physical or mental disease, addiction, poverty, or all of the above. Outreach workers with ID lanyards strode through the trash-strewn landscape like lifeguards working against endless tides of fresh emergencies.
When I arrived at Lopez’s office in the 700 block of Crocker Street, where she runs a business improvement district on behalf of 600 or so beleaguered merchants, she had just completed a tour of the neighborhood with John McKinney, a candidate for city attorney.
She held a note card in her hand and shared some numbers, telling McKinney that by her latest count, 131 of the 702 streetlights in the district were out, 27 children were living on Skid Row, and 72 RVs were parked in the area.
“I came out here because I think this symbolizes the greatest failure in government,” McKinney said. “I think it’s the result of bad law and bad policy. I think it’s the result of a lack of leadership and indifference to the way people are living out here. To me, it’s completely untenable.”
But will anything ever change?
It’s a question two people in particular need to address, and I’ll get to that in a minute.
A lot of people I trust and admire work tirelessly to make a difference on Skid Row, and they’re always eager to share the success stories of those who move through and move on. (I’ve got a column on that coming up soon.)
The long-standing problem is that Skid Row is both a social service center and a mecca of drugs and other vices, with traps on every block. And so it’s a neighborhood at war with itself, with some viewing Skid Row as one of the largest recovery centers in the country while others see a snapshot of social collapse.
Estela Lopez has reached out to me several times over the years. About illegal dumping. Typhus. Calls to City Hall that don’t get answered. About the relentless plague of fires, overdoses and assaults.
“Can you imagine, in 24 years, how many people I’ve seen dead on these streets?” Lopez asked me near her office last week.
Estela Lopez runs a business improvement district on behalf of 600 or so beleaguered merchants.
(Genaro Molina / Los Angeles Times)
When the local post office closed recently in part because of security issues, Lopez told The Times’ Melissa Gomez that “we have reached a point in this city where we are unable to address criminal activity. … It’s surrender.”
We walked to the corner of 8th Street, where paramedics had just pulled away from a medical emergency. Cars and pedestrians stopped at tents for brief transactions, leaving little doubt as to the nature of the business being conducted.
We passed a caged dog and saw a puppy on a short leash being loaded into a vehicle. There’s a lot of talk about dogs being bred and sold, and Lopez said she’s seen evidence of animals being mistreated.
On 7th Street we passed the charred residue of a recent fire. A half block east, four men were slumped on the sidewalk, hitting pipes. Lopez gets calls from exasperated merchants dealing with vandalism and with people blocking their storefronts.
“I’ve never seen so many people overdose right here,” said Sergio Moreno, who runs a check-cashing business and said his family has been in business going back to the ‘70s. He said he’s seen paramedics use naloxone to revive opioid users, only to see the same people go down again just days later.
“How can you run a business?” asked Moreno, who chairs the board of the business improvement district Lopez runs. “This business is our life. This is how we got through school, this is how we put our kids through school.”
And yet despite paying city taxes and BID fees, Moreno said, problems persist and his customers fear for their safety.
Dr. Susan Partovi, a street medic for 22 years, has been advocating for more proactive intervention for those in obvious distress. Partovi told me she recently saw a man rise from a gutter, pull down his pants and defecate in front of her. She called to get help for him but said neither paramedics nor police determined him to be gravely disabled.
Lopez walks past residents of Skid Row last week. By her latest count, 131 of the 702 streetlights in the district were out, 27 children were living on Skid Row, and 72 RVs were parked in the area.
(Genaro Molina / Los Angeles Times)
“We have become complacent with having people lying in the gutter, having diarrhea, speaking nonsensically and putting their lives at risk,” said Partovi, whom I once accompanied as she administered long-acting anti-psychotic injections, arguing that people need clear heads to make better choices.
One sore point for Lopez is the Skid Row Care Campus in the 400 block of Crocker Street, which opened a little more than a year ago and offers all sorts of social services, meds that reduce drug cravings, and supplies that allow for safe use of drugs.
Lopez said she understands the theory of harm reduction: Engage people with a goal of getting them into treatment and back on track. But she wonders how successful such programs are, and argues that they become magnets for lawlessness.
As we talked, a young man approached and told Lopez he’d seen her airing her grievances on TV news.
“I’m wondering, what would be your solution?” he asked.
“I would hope that people could return to life in sobriety,” Lopez responded.
The man said he is “trying to elevate” himself, but that he’d been on a waiting list for housing for six months.
Lopez is tired of being on a waiting list, too.
“If something is working down here,” she told me, “you can’t prove it by me.”
Progress is undeniable, said Sieglinde von Deffner, a social worker and Skid Row coordinator for the Los Angeles County Department of Homeless Services and Housing. But given the “highly vulnerable” nature of the population, “the need is colossal,” she said.
A man stands among his belongings along 7th Street in Skid Row in downtown Los Angeles.
(Genaro Molina / Los Angeles Times)
“I have not yet met someone here who doesn’t want housing of some kind. We just don’t have enough affordable housing for everyone,” Von Deffner said, and long-term homelessness makes people harder to reach. “Now, if we could just stop the inflow.”
Dennis Culhane, a University of Pennsylvania professor who researches homelessness and served as an L.A. County consultant, said there are other ways to get people indoors than investing billions of dollars in new housing that takes years to build. Culhane said single adults who are not veterans, including the elderly and disabled, constitute a majority of the homeless population. But assistance is scarce.
“It’s like you have a famine, and you’ve only got food for 15% of the people,” Culhane said.
Rapid rehousing is critical for the newly homeless, he said. But it can take two years for them to qualify for Social Security disability, and once they do, the $1,000 a month “is completely deficient in the face of rising rents.”
Culhane recommends faster approval of SSI benefits and supplementing that income with additional sources of rental assistance. He believes there are enough vacancies at the low end of the housing market to make a sizable dent in homelessness without new construction.
Judy Mauricio, 65, who has been homeless for nine years, rests inside her tent next to her walker. She says her drug addiction has kept her on the street. She receives state disability funds and says she has cancer.
(Genaro Molina / Los Angeles Times)
As campaign season warms up, I’d like to know if Mayor Karen Bass and her challenger, Councilmember Nithya Raman, agree.
The mayor of L.A. is limited by a power split with the City Council, and the county oversees most addiction and mental health services. But Skid Row sits just a few blocks from the seat of city authority, and nobody has more power or responsibility to address the decades-long human catastrophe on Skid Row than the mayor.
Estela Lopez and the merchants deserve better. The people on the street deserve better. Thousands of housed residents deserve better.
Does Bass have a plan other than what’s currently in place? Does Raman have a better one?
If so, I’d like to hear the details, and I’m available.
steve.lopez@latimes.com
Politics
EXCLUSIVE: FBI adds alleged COVID fraudster accused of taking $5M from kids’ meal program to Most Wanted list
FBI makes first arrest from its ‘most wanted fraudsters’ list
FBI Director Kash Patel announces the first arrest on the “Most Wanted Fraudsters” list. Said Ereg, a Minneapolis man, is accused of stealing over $4.2 million from a federal child nutrition program during the COVID-19 pandemic. Minnesota Senate candidate Michele Tafoya emphasizes the need for accountability for fraudulent activities.
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EXCLUSIVE: The FBI is adding Fahad Mohamed Nur to its Most Wanted Fraudsters List, accusing the Minnesota businessman of allegedly stealing more than $5 million that was intended to feed children during the COVID-19 pandemic.
Nur has been on the run since 2022 and is wanted for his alleged role in a fraud scheme that exploited Minnesota’s Federal Child Nutrition Program during the COVID-19 pandemic, according to the FBI. The bureau alleges he owned a vendor and purported food supplier that received more than $5 million in fraudulent program funds by submitting fake invoices before laundering the proceeds.
The Bureau believes Nur has ties to Somalia and may currently be living there.
The FBI is offering a reward of up to $150,000 for information leading to Nur’s arrest and conviction.
OWNER OF DAYCARE IN VIRAL NICK SHIRLEY VIDEO CHARGED IN $4.6M DAYCARE FRAUD SCHEME, PROSECUTORS SAY
Fahad Mohamed Nur has been on the run since 2022 and may be in Somalia, according to the FBI. (Federal Bureau of Investigation)
Nur is the latest addition to the FBI’s Most Wanted Fraudsters List, which officials say has already resulted in the arrests of two fugitives within weeks of its launch.
“Under President Trump’s and Vice President Vance’s leadership with the White House Task Force to Eliminate Fraud, the FBI’s historic ‘Most Wanted Fraudsters list’ has already seen tremendous success – with two subjects brought to justice in a matter of weeks, apprehended out of Somalia and the Philippines,” FBI Director Kash Patel said in a statement to Fox News Digital.
Patel said the early arrests demonstrate that the FBI is aggressively pursuing fugitives accused of stealing from American taxpayers.
FBI ADDS 2 FUGITIVES TO ‘MOST WANTED FRAUDSTERS’ LIST AMID HISTORIC $6.5B HEALTHCARE TAKEDOWN: PATEL
FBI Director Kash Patel conducts a news conference at the Department of Justice on Thursday, December 4, 2025. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
“Our newest subject – Fahad Mohamed Nur – has been on the run since 2022 for allegedly stealing over $5 million from a child nutrition program in Minnesota.”
Patel added: “Collectively, the Task Force has already uncovered more than $13 billion in fraud, and the rapid success of the Most Wanted Fraudsters List should show all Americans that this FBI will [be] at the forefront pursuing the worst of the worst who stole from hardworking American taxpayers.”
DR OZ WARNS MEDICARE SCAMMERS ARE STEALING BILLIONS — AND YOUR PERSONAL INFORMATION COULD BE NEXT
Federal agents enter an office building as a search warrant is executed at Ultimate Home Health Services over potential Medicaid fraud, on December 18, 2025 in Bloomington, Minnesota, United States. (Christopher Juhn/Anadolu via Getty Images)
Federal officials say the investigation is part of a broader government effort targeting pandemic-era fraud.
“The Department’s robust partnership with the FBI and the White House Task Force to Eliminate Fraud has already delivered historic results. That partnership grows even stronger today with the addition of this latest subject to the Most Wanted Fraudsters list,” said Acting Attorney General Todd Blanche. “President Trump has made it clear: Fraudsters no longer have a safe haven in America. Law enforcement will continue to use every tool at its disposal to bring those who steal from American taxpayers to justice.”
The White House Task Force to Eliminate Fraud, led by Vice President JD Vance, has already uncovered more than $13 billion in fraud, according to the FBI.
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Anyone with information about Nur’s whereabouts is urged to contact the FBI at 1-800-CALL-FBI, their local FBI office, the nearest U.S. Embassy or Consulate, or submit a tip online at tips.fbi.gov.
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