California fraud allegations took center stage this week as a federal prosecutor sharply criticized Gov. Gavin Newsom while the Trump administration expanded a corruption probe into the state’s use of taxpayer funds. The investigation focuses heavily on homelessness spending and broader concerns about oversight in Democrat-led states.
Bill Essayli, First Assistant U.S. Attorney for the Central District of California, said the state has failed to track billions in public money. “California has spent $24 billion in the last five years on homelessness, and no one can account for where that money has really gone,” Essayli said Thursday on Fox & Friends. He referred to Newsom as the “king of fraud,” citing systemic problems in state-run programs.
Essayli launched a federal task force in April targeting corruption tied to homelessness services. The effort has already led to charges against two men accused of exploiting real estate projects to siphon funds from the homelessness system. “We already charged millions of dollars in fraud,” Essayli said, adding, “I can tell you more charges are coming, probably as soon as this month.”
President Donald Trump addressed the California fraud probe on Truth Social, writing, “The Fraud investigation of California has begun,” and suggested the state may be “more corrupt” than Minnesota, where federal authorities are probing alleged welfare and childcare fraud.
Newsom’s office rejected the accusations, claiming the governor has “blocked over $125 BILLION in fraud.” Vice President JD Vance also weighed in, criticizing California’s benefits policies. “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,” Vance said.
Federal officials say the California fraud investigation remains active, with additional cases expected.
