California Flagged for “Weak Oversight” in Federal Fraud Crackdown

SACRAMENTO —  California was flagged for “insufficient safeguards and weak oversight” Monday in a federal fraud crackdown announced by President Donald Trump.

The White House said states like California have failed to maintain basic safeguards, including verifying eligibility and enforcing oversight standards, creating conditions for large-scale fraud.

Assembly Republican Whip Alexandra M. Macedo (R-Tulare) said that lines up with what she has already seen on the ground.

“California did not end up on this list by accident,” Macedo said. “Seven years into Gavin Newsom’s governorship, the consequences of years of negligence are catching up, and the people in the most vulnerable moments of their lives are the ones being harmed.”

“When fraudulent actors bill for ‘ghost patients’ or enroll healthy individuals without their consent, they deplete the very funds intended to provide high-quality care by the legitimate hospice providers for those truly in their final days,” Macedo added.  

In January, Macedo visited a Los Angeles property linked to 197 hospice licenses, all registered to the same address. Many of the phone numbers were disconnected, and there was no sign any legitimate hospice business was operating there.

A state audit warned that weak oversight was allowing large-scale fraud, including cases where licenses were approved despite red flags, and complaints have continued to mount.

“Programs meant to help vulnerable people in their time of need are being exploited. The Newsom Administration owns that failure 100%.”

The task force, led by Vice President JD Vance, will focus on fraud in federally funded programs, including health care, housing, and food assistance.

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