A growing federal campaign targeting the misuse of public money has zeroed in on California, where a top prosecutor has sharply criticized Gov. Gavin Newsom’s oversight. The criticism landed hard, with the governor being labeled the “king of fraud” in a sweeping new corruption push.
“California has spent $24 billion in the last five years on homelessness, and no one can account for where that money has really gone,” First Assistant U.S. Attorney for the Central District of California Bill Essayli said.
Task Force Targets Homelessness Funding Abuse
Earlier this year, Essayli launched a dedicated task force to investigate corruption tied to homelessness programs. The effort has already produced federal charges against two individuals accused of manipulating real estate projects to siphon benefits from California’s homelessness system.
He warned that these high-profile cases represent only a fraction of what investigators believe is happening behind the scenes. They involve millions in alleged fraud, yet Essayli emphasized that they are merely the “tip of the iceberg.”
“We already charged millions of dollars in fraud,” he said.
“I can tell you more charges are coming, probably as soon as this month.”
Accusations of Lax Oversight
Essayli argued that state leadership has allowed widespread fraud to flourish, pointing to weak accountability across programs funded by taxpayer dollars. Other Democrat-led states face similar problems. Minnesota, for example, is under federal scrutiny for alleged fraud within childcare and social service programs stretching into the hundreds of millions.
Images from Los Angeles illustrate the crisis on the ground. Large encampments, growing trash piles, and faltering services paint a picture of a system overwhelmed despite enormous public spending.
Trump Says California Could Be ‘More Corrupt’ Than Minnesota
President Donald Trump publicly weighed in on Truth Social, hinting California may prove even worse than Minnesota in terms of systemic corruption.
“The Fraud investigation of California has begun,” he wrote on Tuesday.
Newsom Pushes Back
Gov. Gavin Newsom’s office responded quickly online, insisting the state has aggressively fought fraud, not enabled it. His press team wrote that the governor has “blocked over $125 BILLION in fraud, arrested criminal parasites leaching off of taxpayers, and protected taxpayers from the exact kind of scam artist Trump celebrates, excuses, and pardons.”
Vance Criticizes California’s Welfare Approach
Vice President JD Vance also entered the debate, arguing that California’s welfare policies intentionally extend benefits to people regardless of immigration status. Speaking to Jesse Watters, he accused the state of openly promoting taxpayer-funded Medicaid for individuals living in the country illegally.
“California, more than almost any other state, has been so glaring and obvious about the fact that they’re giving welfare benefits to illegal aliens,” said Vance.
“They’re getting rich off of the generosity of the American taxpayer. The political corruption that enables it has got to stop,” he added.
