Federal failure fueled unemployment fraud. California stepped in.
Trump is the King of Fraud — pardoning criminals and promoting self-dealing corruption.
Unemployment fraud during the COVID-19 pandemic was enabled by federal failures under the first Trump administration.
Programs were rushed, safeguards were ignored, and states were left exposed — despite repeated warnings.
In 2021, California and other states warned federal agencies that unemployment programs were deployed without anti-fraud guidance or technical support. Trump’s own Department of Labor Inspector General later confirmed the risk was not adequately addressed.
While federal agencies stalled, California acted.
The state deployed early-warning systems, identity verification tools, and advanced tracking technologies — and continues to hold fraudsters accountable today.
Results
- $125 billion+ in identity-theft-related fraud prevented
- 2,300 criminal investigations supported
- 974 arrests and 670 convictions
- Nearly $6 billion recovered from federal pandemic programs
California now outperforms the nation with an improper payment rate about 15% LOWER than the national average.
California holding fraudsters accountable
Food and cash benefits
California cut EBT theft by 83% in one year. How? By doing what no other state has done: California is the first state in the country using chip-and-tap EBT cards, dramatically reducing skimming, and deploying cutting-edge AI fraud detection models.
All that, plus increased law-enforcement coordination, has led to 190 arrests and the seizure of hundreds of illegal devices. This is what prevention looks like.
Child care
The Trump administration is attempting to cut critical child care funding exclusively in states with Democratic Governors. It took a federal judge less than 24 hours to order an emergency pause to Trump’s politically motivated stunt.
California runs one of the most transparent child-care oversight systems in the country. Since 2015, licensing and inspection records have been publicly available, giving parents real information while protecting family privacy under the law.
Let’s be clear: “No children present” does not mean fraud.
California maintains a robust fraud prevention system, including:- Multi-layer monitoring and audits
- Whistleblower protections
- Mandatory fraud and overpayment policies
- Contract oversight and enforcement
When fraud is found, California acts — recovering funds, terminating contracts, revoking licenses, and referring cases for prosecution.
Financial aid
California stopped community-college fraud before it happened.
In 2024, 31.4% of applications were flagged as fraudulent and stopped. Financial-aid fraud held to 0.2%, even while administering $3.56 billion
California colleges use layered protections — spam filters, identity verification, DMV mobile ID, and AI-driven fraud detection — now deployed across 80+ campuses.
The system worked. Fraud didn’t.
Hospice, Medi-Cal, and health care
In 2021, Governor Newsom proactively signed a new law BANNING all new hospice licenses because of concerns about fraud. Today, the state enforces that hospice licensing moratorium, runs a multi-agency fraud task force, and recovers funds for both taxpayers and patients.
Since April 2021:- 101 criminal enterprises investigated
- 284 defendants charged
- 109 hospice-related criminal cases filed
- 280 hospice licenses revoked by CDPH
- Paused ALL new hospice licenses
Homelessness programs
California believes in homelessness funding accountability. In fact, Californians can track homeless spending themselves by visiting accountability.ca.gov.
Under Governor Newsom’s leadership, California increased oversight of homelessness funding — and local investigators are enforcing it.
What about the “missing” $24 billion? It’s not missing! Bad actors often falsely say the state “lost” $24 billion that went to local governments to address homelessness through numerous state programs. All the money is accounted for. While an audit showed that previously not all state programs required locals to report how those dollars improved homelessness for the most recent years, Governor Newsom fixed that problem.
All state-funded programs are subject to:- Monthly and quarterly fiscal reporting
- Public dashboards tracking spending
- Clear compliance requirements and enforcement
Accountability isn’t optional — it’s the rule
California is cracking down on fraud.
Other states should too.
Facts
- 48 Texans charged in nationwide $14.6 Billion health care fraud takedown. Read here.
- More than $21 Million In Wrongful Unemployment Benefits Paid to Wyoming Workers During COVID. Read here.
- Lavaca (Arkansas) man sentenced in $134 Million COVID fraud scheme. Read here.
- Montana State Auditor reports up to $50 million in suspected health care fraud targeting tribal members. Read here.
- South Florida man found guilty in the largest food stamp fraud bust in U.S. history. Read here.
Fraud thrives on misinformation.
California responds with facts.
Recent news
California reduces EBT theft by 83% with first-in-the-nation technology
Jan 16, 2026Preventing hospice fraud through Governor’s hospice license ban
Jan 27, 2026Holding fraudsters accountable
Jan 21, 2026Jan 21, 2026