With the Trump administration reportedly in talks to create an anti-fraud task force for California, state Atty. Gen. Rob Bonta on Thursday vehemently denounced what he described as the administration’s “reckless” and “false” rhetoric about fraud plaguing the state.

At a news conference at the Ronald Reagan State Building in downtown Los Angeles, Bonta said the Trump administration’s claims that state programs are overrun by fraud and that its government was itself perpetrating or facilitating this fraud was “outrageous and ridiculous and without basis.”

Bonta said most states struggle with some fraud from outside actors, saying that “anywhere there’s money flowing there’s a risk” and that the state’s Department of Justice has thrown immense resources into cracking down on illicit activities and recovering funds for taxpayers.

As a politicized national fight over waste, fraud and abuse led by Republicans have targeted California and its Democratic leadership, Bonta and other state officials have moved swiftly to combat the claims.

In California, Bonta said, authorities have recovered nearly $2.7 billion through criminal and civil prosecutions since 2016, including some $740 million through Medi-Cal fraud related prosecutions, about $2 billion under the state’s False Claims Act, and an additional $108 million from a task force focused on rooting out tax fraud in the underground economy.

State authorities have frequently partnered with the federal government in the past on such investigations and welcome a good-faith partnership in the future, Bonta said.

CBS News reported on the creation of a California-focused fraud task force earlier this week, citing multiple unnamed sources familiar with the plans. The outlet, whose new editor in chief, Bari Weiss, has been aligned with Trump and spearheaded a major overhaul of the news organization, reported that the president plans to soon sign an executive order naming Vice President JD Vance as head of a group that would also include the head of the Federal Trade Commission as vice chairman.

Trump’s rhetoric fueled doubts about California programs and Gov. Gavin Newsom’s leadership at the start of the year, when he declared that “the fraud investigation of California [had] begun.”

On the president’s social media platform, in formal letters and in recent news conferences, officials in the Trump administration have alleged fraud in child care, hospice funding and unemployment benefits.

Last week, the topic took center stage again when Mehmet Oz, the administrator for the Centers for Medicare and Medicaid Services, posted a video accusing Armenian crime groups of carrying out widespread hospice fraud in Los Angeles.

That viral video received more than 4.5 million views on X.

Oz’s video received fierce backlash from California politicians and the local Armenian community, who collectively alleged that it contained baseless and racially charged attacks on Armenians.

The video shows Oz being driven around a section of Van Nuys where he says that about $3.5-billion worth of medicare fraud has been perpetrated by hospice and home-care businesses, claiming that “it’s run, quite a bit of it, by the Russian Armenian mafia.”

He also points to Armenian language signs, incorrectly referring to them as written in a cerulean script, and saying “you notice that the lettering and language behind me is of that dialect and it also highlights the fact that this is an organized crime mafia deal.”

Newsom filed a civil rights complaint against Oz on Jan. 29, asking the Department of Health and Human Services to investigate the “racially charged and false public statements” made in the video.

On Monday, California Sen. Adam Schiff followed suit, demanding an independent review of Oz’s alleged targeting of Armenian American communities.

“To suggest markers of Armenian culture, language, and identity are indicative of criminality underscores a discriminatory motive that could taint any investigation into fraud and incite the further demonization of the community,” Schiff said in a statement.

Glendale City Councilmember Ardy Kassakhian said in an interview that Oz’s statements feed into the Trump administration’s playbook of using allegations of fraud to sow racial divisions.

“This time the focus just happens to be the Armenians,” he said. “In places like Minnesota, it’s the Somali community.”

California has been investigating healthcare fraud since a 2020 Los Angeles Times investigation uncovered widespread Medicare fraud in the state’s booming but loosely regulated hospice industry.

From 2010 to 2020, the county’s hospices multiplied sixfold, accounting for more than half of the state’s roughly 1,200 Medicare-certified providers, according to a Times analysis of federal healthcare data.

Scores of providers sprang up along a corridor stretching west from the San Gabriel Valley through the San Fernando Valley, which now has the highest concentration of hospices in the nation.

The state Department of Justice has charged more than 100 people with hospice-related fraud since 2021 and shuttered around 280 hospices in the last two years, according to data from the California Department of Public Health.

But those shuttered hospices barely represent a dent in the massive hospice home healthcare industry. There are 468 hospice facilities in the Van Nuys area alone, according to the state database of medical facilities.

There are 197 licensed medical practices, including 89 licensed hospices, in a single two-story building located at 14545 Friar St. in Van Nuys — suggesting a concentration of fraudulent businesses.

When asked why the number of licensed medical practices in Van Nuys and at that address are so high, a spokesperson for the California Department of Public Health said that the department is committed to fighting fraud and unable to comment on pending investigation.

Recent turmoil in Minnesota has demonstrated the potential ripple effects of allegations levied by the Trump administration.

Ahead of sending in thousands of immigration enforcement agents into the Midwest state, Trump had repeatedly cited a fraud case involving funds for a child nutrition program involving COVID-19 pandemic relief funds.

He used the case, which involved a nonprofit where several Somali Americans worked, to vilify the immigrant community, even though the organization was run by a white woman. After the state became a lightning rod, Gov. Tim Walz dropped his reelection plans.

At Thursday’s news conference, Bonta described major cases in other states, such as $11.4 million healthcare fraud and wire fraud conspiracy involving a nursing assistant in Florida and a $88.3 million Medicaid fraud case in in Ohio involving over billing by a pharmacy benefit manager — to show abuse of state programs is not unique to California — or to blue states.

“We know Vance hails from Ohio, so maybe he should take a look in his own backyard before leading an unnecessary political stunt focused on California,” Bonta said. “We thought we should set the record straight.”

Times staff writers Melody Gutierrez and Dakota Smith contributed to this report.

Officials in California criticized the federal response to a bio lab found in a Fresno County suburb after a similar setup was found at a home in Las Vegas over the weekend. 

The California lab was found in a Reedley home in late 2023. Police said the illegal facility contained “pathogen-labeled containers” with labels that included dengue fever, HIV, and malaria, as well as about 1,000 mice that officials believe were used as test subjects. 

Jia Bei Zhu, a Chinese citizen, was arrested in October 2023 and indicted in November. He was charged with distributing adulterated and misbranded medical items, including coronavirus tests, and remains behind bars. He is set to appear in court in April. 

Authorities raided a home in Las Vegas early Saturday morning and found a similar set-up inside. Las Vegas Metropolitan Police Department sheriff Kevin McMahill said that officials found “multiple refrigerators,  a freezer,  and  other laboratory-type equipment, along with numerous bottles and jugs containing unknown liquid substances” inside a locked garage.

“These items, importantly, were consistent in appearance to the items found and described in the Reedley, California lab investigation,” McMahill  said. 

FBI Special Agent in Charge for Las Vegas Christoper Delzotto said agents found items including a centrifuge, biosafety tools and “unknown liquids in gallon-sized containers and refrigerated vials with unknown liquids.” More than 1,000 samples were collected from the scene and transported to the National Bioforensic Analysis Center in Maryland, Delzotto said. 

McMahill said that the police department “received limited information that laboratory equipment and  potentially hazardous materials” were being stored at the Vegas house before the raid. 

The investigation revealed that Zhu also owned the Vegas residence and “raised significant concern for what” officers might encounter, McMahill said. A robot was used to clear the house before police entered, and hazmat teams helped move items from the home.  

Nicole Zieba, the city manager of Reedley said she was “not surprised about the discovery.” Fresno County supervisor Nathan Magsig said items discovered in the Reedley lab “pointed to the fact that there may be additional laboratories in other parts” of the U.S.  Zieba said that Reedley officials had tried to warn the federal government. 

“I hope they are paying attention because when we tried to raise the flag, we received just such a poor response from the CDC,” Zieba said. “It’s almost as if they didn’t want anything to do with it.” 

Las Vegas authorities also searched a second home, but found no suspicious materials there. McMahill said police had arrested Ori Solomon, a man believed to be the property manager of both Vegas properties, on an initial charge of disposing and discharging hazardous waste. 

Anthony Capozzi, Zhu’s attorney, told the Associated Press that his client “is not involved in any kind of a biolab being conducted in a home in Las Vegas.” Capozzi said Zhu has been in federal custody for three years. 

“What went on in that residence, we are unaware of,” Capozzi said. 

Federal agents were seen entering the Reedley lab again in the past days. McMahill said the Las Vegas police department still has “a lot of work” ahead of them. 

“Vegas is in for a long road,” Zieba said. “If it’s anything like the Reedley case, there was no manual to pull off the shelves.” 

SACRAMENTO — National union leaders, including the head of one of California’s largest labor organizations, on Wednesday urged Gov. Gavin Newsom to protect workers as artificial intelligence threatens to replace or surveil employees — and warned that a failure to do so could hurt his presidential ambitions.

“This is a priority for the entire nation,” Lorena Gonzalez, president of the California Federation of Labor Unions, said at a news conference near the state Capitol. “He cannot spend his time waiting to be done in California and think he’s not going to get questions about the true issues surrounding AI, Big Tech and the Big Tech billionaires that are trying to buy our government.”

Gonzalez, a former state lawmaker from San Diego, said the federation is sponsoring a package of new bills aimed at reining in the use of AI and protecting the rights of workers, including safeguards against spying in the workplace and restrictions on layoffs.

The package of bills supported by labor organizations includes:

• Senate Bill 947 by Sen. Jerry McNerney (D-Stockton), which would require human oversight if an algorithm is used to justify the discipline or termination of an employee.
• Senate Bill 951, introduced by Sen. Eloise Gomez Reyes (D-Colton), which would require employers to provide a 90-day advance notice to workers and local and state governments before AI-related layoffs. It would apply to cases affecting 25 or more workers or 25% of the workforce, whichever is less. Recent layoffs, including at Amazon, Expedia and Pinterest, have been tied to AI, although some economists argue it’s challenging to determine whether that was the primary factor.
• Assembly Bill 1331, dubbed “No bosses in the bathroom,” would grant workers the right to remove workplace surveillance tools when entering public bathrooms or certain employee-only areas. The bill, authored by Assemblymember Sade Elhawary (D-Los Angeles), would subject employers to a $500 civil penalty for violations.

Gonzalez said labor organizations are often told to “work it out” with businesses but argued this was a dead end.

“We are not going to be able to achieve guardrails by working with bosses who want no guardrails,” she said. “It is time that the governor engages with workers in the workplace. Every AI convening he does, everybody he’s pulled together is [representing] AI and Big Tech lobbyists.”

Gonzalez was joined Wednesday by Liz Shuler, president of the AFL-CIO, and other labor leaders from Iowa, Georgia, North Carolina and Nevada.

“This is the most urgent issue that we [as workers] are facing,” Shuler said. “This is a crisis and no one is prepared.”

In a joint letter addressed to Newsom, they implored the governor to act quickly to establish meaningful safeguards around the technology.

“This fight extends beyond devastating job losses and new forms of union busting,” a copy of the letter states. “There is dignity in human work that is the foundation of a healthy, productive democracy. The future of our economy and our society cannot be left to the unchecked whims of profit driven technology corporations and billionaires.”

In an email to The Times, Newsom spokesperson Tara Gallegos said the governor had a strong record of fighting for workers’ rights, including raising the minimum wage and expanding sick leave and other worker protections.

“No Governor has done more than Governor Gavin Newsom to regulate AI in a way that protects workers without killing jobs or innovation,” she wrote. “Under his leadership, California has taken the most comprehensive, worker-centered approach to AI in the country.”

Adults in the United States are growing increasingly concerned about the ramifications of AI, according to a survey from the Pew Research Center. Fifty percent of those surveyed last year said they are “more concerned than excited” about the increased use of AI in daily life, up from 37% in 2021.