New Exposé Claims California Lost at Least $180 Billion to Fraud Under Gavin Newsom

A bombshell exposé co-authored by Chris Rufo of City Journal has laid bare staggering levels of fraud bleeding California’s budget dry under Governor Gavin Newsom. Speaking on “Will Cain Country,” Rufo detailed how Medi-Cal fraud, unemployment fraud, and general welfare fraud have collectively cost the state between $180 billion and $280 billion — an amount comparable to the entire GDP of New Zealand.

Rufo described the situation as an “ugly reality,” pointing to a federal government under the Trump administration that is currently ill-equipped to tackle the scale of the problem. He called for a significant ramp-up of anti-fraud efforts, warning that without tougher enforcement, the rampant abuse will continue unchecked.

A particularly egregious example is California’s in-home care program, intended to support those who must provide full-time care for loved ones. Instead, the program has ballooned into the state’s most common “job,” with roughly 800,000 people paid to stay home or remain in care recipients’ homes. The system’s reliance on an honor code and private arrangements has made it a hotbed for fraud.

Thousands of whistleblower reports have triggered hundreds of investigations, yet fewer than 100 prosecutions have resulted. Rufo called this sprawling abuse a “shadow welfare system” that now consumes about 10% of California’s state budget — roughly $30 billion annually. Meanwhile, middle-class Californians watch their quality of life deteriorate as fraudsters siphon off public funds.

Governor Newsom’s office dismissed the allegations as “utter bulls— from top to bottom,” asserting that the state is actively combating fraud and urging the federal government to join the fight. They highlighted actions such as suspending over 280 licenses and banning new ones since 2022 to tackle hospice fraud.

However, Rufo’s reporting suggests these efforts fall far short of the scale needed to stop the hemorrhaging. The governor’s office’s pointed question about whether former President Trump will pardon fraudsters echoes a broader concern about political interference shielding bad actors from accountability.

This exposé exposes a critical failure of governance and oversight in California, with taxpayer dollars lost on a massive scale while fraudsters exploit systemic weaknesses. It underscores the urgent need for transparency, stronger enforcement, and real consequences to protect public resources and restore trust in government programs.