With the Trump administration reportedly in talks to create an anti-fraud process pressure for California, state Atty. Gen. Rob Bonta on Thursday vehemently denounced what he described because the administration’s “reckless” and “false” rhetoric about fraud plaguing the state.
At a information convention on the Ronald Reagan State Constructing in downtown Los Angeles, Bonta mentioned the Trump administration’s claims that state packages are overrun by fraud and that its authorities was itself perpetrating or facilitating this fraud was “outrageous and ridiculous and with out foundation.”
Bonta mentioned most states wrestle with some fraud from outdoors actors, saying that “anyplace there’s cash flowing there’s a threat” and that the state’s Division of Justice has thrown immense sources into cracking down on illicit actions and recovering funds for taxpayers.
As a politicized nationwide battle over waste, fraud and abuse led by Republicans have focused California and its Democratic management, Bonta and different state officers have moved swiftly to fight the claims.
In California, Bonta mentioned, authorities have recovered almost $2.7 billion by means of felony and civil prosecutions since 2016, together with some $740 million by means of Medi-Cal fraud associated prosecutions, about $2 billion below the state’s False Claims Act, and a further $108 million from a process pressure targeted on rooting out tax fraud within the underground economic system.
State authorities have often partnered with the federal authorities prior to now on such investigations and welcome a good-faith partnership sooner or later, Bonta mentioned.
CBS Information reported on the creation of a California-focused fraud process pressure earlier this week, citing a number of unnamed sources acquainted with the plans. The outlet, whose new editor in chief, Bari Weiss, has been aligned with Trump and spearheaded a significant overhaul of the information group, reported that the president plans to quickly signal an government order naming Vice President JD Vance as head of a bunch that will additionally embody the top of the Federal Commerce Fee as vice chairman.
Trump’s rhetoric fueled doubts about California packages and Gov. Gavin Newsom’s management initially of the yr, when he declared that “the fraud investigation of California [had] begun.”
On the president’s social media platform, in formal letters and in latest information conferences, officers within the Trump administration have alleged fraud in baby care, hospice funding and unemployment advantages.
Final week, the subject took heart stage once more when Mehmet Oz, the administrator for the Facilities for Medicare and Medicaid Providers, posted a video accusing Armenian crime teams of finishing up widespread hospice fraud in Los Angeles.
That viral video acquired greater than 4.5 million views on X.
Oz’s video acquired fierce backlash from California politicians and the native Armenian neighborhood, who collectively alleged that it contained baseless and racially charged assaults on Armenians.
The video reveals Oz being pushed round a bit of Van Nuys the place he says that about $3.5-billion value of medicare fraud has been perpetrated by hospice and home-care companies, claiming that “it’s run, fairly a little bit of it, by the Russian Armenian mafia.”
He additionally factors to Armenian language indicators, incorrectly referring to them as written in a cerulean script, and saying “you discover that the lettering and language behind me is of that dialect and it additionally highlights the truth that that is an organized crime mafia deal.”
Newsom filed a civil rights criticism in opposition to Oz on Jan. 29, asking the Division of Well being and Human Providers to analyze the “racially charged and false public statements” made within the video.
On Monday, California Sen. Adam Schiff adopted swimsuit, demanding an impartial assessment of Oz’s alleged concentrating on of Armenian American communities.
“To counsel markers of Armenian tradition, language, and identification are indicative of criminality underscores a discriminatory motive that would taint any investigation into fraud and incite the additional demonization of the neighborhood,” Schiff mentioned in a press release.
Glendale Metropolis Councilmember Ardy Kassakhian mentioned in an interview that Oz’s statements feed into the Trump administration’s playbook of utilizing allegations of fraud to sow racial divisions.
“This time the main target simply occurs to be the Armenians,” he mentioned. “In locations like Minnesota, it’s the Somali neighborhood.”
California has been investigating healthcare fraud since a 2020 Los Angeles Occasions investigation uncovered widespread Medicare fraud within the state’s booming however loosely regulated hospice business.
From 2010 to 2020, the county’s hospices multiplied sixfold, accounting for greater than half of the state’s roughly 1,200 Medicare-certified suppliers, based on a Occasions evaluation of federal healthcare knowledge.
Scores of suppliers sprang up alongside a hall stretching west from the San Gabriel Valley by means of the San Fernando Valley, which now has the very best focus of hospices within the nation.
The state Division of Justice has charged greater than 100 individuals with hospice-related fraud since 2021 and shuttered round 280 hospices within the final two years, based on knowledge from the California Division of Public Well being.
However these shuttered hospices barely signify a dent within the large hospice residence healthcare business. There are 468 hospice amenities within the Van Nuys space alone, based on the state database of medical amenities.
There are 197 licensed medical practices, together with 89 licensed hospices, in a single two-story constructing positioned at 14545 Friar St. in Van Nuys — suggesting a focus of fraudulent companies.
When requested why the variety of licensed medical practices in Van Nuys and at that tackle are so excessive, a spokesperson for the California Division of Public Well being mentioned that the division is dedicated to preventing fraud and unable to touch upon pending investigation.
Current turmoil in Minnesota has demonstrated the potential ripple results of allegations levied by the Trump administration.
Forward of sending in hundreds of immigration enforcement brokers into the Midwest state, Trump had repeatedly cited a fraud case involving funds for a kid vitamin program involving COVID-19 pandemic reduction funds.
He used the case, which concerned a nonprofit the place a number of Somali Individuals labored, to vilify the immigrant neighborhood, despite the fact that the group was run by a white lady. After the state turned a lightning rod, Gov. Tim Walz dropped his reelection plans.
At Thursday’s information convention, Bonta described main circumstances in different states, reminiscent of $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 profit supervisor — to point out abuse of state packages isn’t distinctive to California — or to blue states.
“We all know Vance hails from Ohio, so perhaps he ought to have a look in his personal yard earlier than main an pointless political stunt targeted on California,” Bonta mentioned. “We thought we must always set the report straight.”
Occasions workers writers Melody Gutierrez and Dakota Smith contributed to this report.
