Gavin Newsom’s Empire of Fraud, Illustrated
What's $180 Billion Among Friends?
California charges some of the highest taxes in America and spends more than $300 billion every year. But its roads are falling apart, wildfires have destroyed entire neighborhoods, homelessness is out of control, and middle-class families can barely afford groceries and gas. So where is all the money going? A blockbuster investigation by City Journal — combined with a fast-moving federal crackdown — reveals the nauseating answer: at least $180 billion has been stolen by criminals, scammers, and organized crime rings on Governor Gavin Newsom’s watch (I hear the nickname he prefers is “Ghetto Gavin”).
The following infographics break down the stunning scale of the scam.
The Cash Machine Breaks Open
When COVID hit, California’s leaders turned off the fraud controls on the state’s unemployment insurance system and started shoveling money out the door.
What naturally followed was the biggest unemployment fraud in American history. Criminals from around the world — including Romanian crime rings, neo-Nazis, and a Memphis rapper who bragged about it in a music video — stole billions. The state paid out hundreds of millions to prison inmates, including 133 people on death row, because the EDD had only two employees checking for fraud. By the best estimates, at least $32.6 billion was stolen through fraudulent unemployment claims alone, and the fraud hasn’t stopped: the state auditor found a fraud rate near 8 percent in 2023 and 2024, meaning over a billion more dollars have been stolen since the pandemic ended.
If California were a business, the SEC would have shut it down years ago. But California isn't a business - it’s a state-run, taxpayer robbery machine.
The Medi-Cal Money Pit
California’s Medi-Cal program has more than doubled in cost under Newsom — from $93.5 billion to nearly $197 billion — even as the state’s population shrank. The state’s auditor has flagged Medi-Cal as “high risk” since 2007, and the A.G. admitted fraud could reach billions every year. Instead of tightening controls, Newsom eliminated limits, suspended requirements, and expanded the In-Home Supportive Services (IHSS) program, where 70 percent of caregivers are family members of patients and the state explicitly bans surprise home visits. The results are predictable: a $178 million pharmacy fraud ring, caregivers billing for services to dead or imprisoned patients, and an estimated $146 billion in total Medi-Cal fraud since 2019. Meanwhile, $24 billion in homelessness spending produced so little documentation that the state auditor couldn’t even determine whether most programs worked. And a California state senator is now pushing a bill to raise the felony threshold for welfare fraud from $950 to $25,000 — basically decriminalizing it.
Oh, and 41 of the 68 county employees overseeing the IHSS program were also IHSS providers. That's not a conflict of interest — that's a business model. And one nonprofit CEO allegedly spent $10 million in homeless money on 'lavish vacations and designer clothes.' At least someone got housed.
The Reckoning
The federal government is now treating California’s fraud crisis like an emergency, which it is. In early April 2026, FBI agents swept through LA County and arrested eight in a $60 million hospice fraud operation called “Operation Never Say Die” — with charges against 15 total. Acting U.S. Attorney Bill Essayli publicly called Ghetto Gavin the “King of Fraud.” Dr. Oz revealed that CMS shut down 221 fake hospices in LA in just ten weeks, compared to only four that Newsom closed in four years — and plans to audit all 1,800 hospices in California by year’s end, expecting to shut down about half. President Trump signed an executive order creating a federal fraud task force led by Vice President JD Vance. Meanwhile, the fraud has reached Ghetto’s inner circle: his former chief of staff Dana Williamson has been charged with siphoning campaign and COVID recovery funds, and multiple state employees have pleaded guilty to theft from the very programs they were supposed to protect. The arrests have begun, and federal officials say this is just the start.
California collects more tax revenue than most countries on Earth, and it has almost nothing to show for it. At least $180 billion has been stolen from taxpayers — not through some sophisticated hack, but through the simplest fraud imaginable: fake claims, phantom patients, and programs with no oversight.
Newsom’s government suspended fraud controls, blocked audits, expanded programs without any guardrails, and looked the other way while organized crime rings, insiders, and even his own chief of staff allegedly raped the public treasury. Now federal prosecutors, CMS, and a new presidential task force are doing what Sacramento refused to do. The money trail leads everywhere — from Romanian crime networks to fake hospices to nonprofit executives living in mansions — and the political consequences could reshape the 2026 midterms.
The Democrats' fundraising infrastructure is losing USAID, ActBlue is serious trouble, and now the Cali fraud pipeline is being welded shut. At this rate, the DNC could be running bake sales next month.
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