Feds launch new fraud force targeting Northern California, Arizona and Nevada
The U.S. Department of Justice will intensify efforts to catch healthcare fraudsters with a new task force focused on Northern California, Arizona and Nevada, amid a nationwide fraud crackdown led by Vice President J.D. Vance that has often taken on political overtones.
U.S. attorneys for the District of Nevada, District of Arizona and Northern District of California, as well as other federal law enforcement officials, were in San Francisco to announce the new initiative Thursday morning. The involvement of state agencies in the effort was unclear, though the California Department of Justice often partners with federal law enforcement on fraud cases and other criminal investigations.
Attorney General Rob Bonta has made two sets of arrests stemming from healthcare fraud investigations in recent months, one in Los Angeles and one in Monterey County.
There are growing indications of widespread healthcare fraud in all three states, according to federal officials. The task force adds prosecutors and other resources to the region who will focus on making fraud arrests, particularly in the healthcare and elderly care industries.
Fraud is an issue of growing concern for voters of both parties. While Democrats have accused President Donald Trump’s administration of focusing only on states elected officials from their party oversee, the task force takes in a bipartisan swath of the western United States. Nevada has a Republican governor and Democratic-controlled legislature, while Arizona has the opposite — a Democrat in the governor’s mansion and Republicans controlling the statehouse. Both states went for Trump in the 2024 election.
A separate strike force is already operating out of Los Angeles, where both federal and state officials have made arrests over allegations of hundreds of millions of dollars in fraudulent hospice billing.
Hospice fraud in that city has led to dueling accusations of fault from state officials like Gov. Gavin Newsom, who says the federal government seeks political gains from the problem after previously canceling an anti-hospice fraud effort, and Trump administration officials who say Newsom has presided over a fraud-ridden state for years.
No overt talk of politics
California Republicans have also seized on the issue, amid visits to the state by the right-wing online influencer Nick Shirley, who has published video investigations into daycare fraud in Minnesota and hospice fraud in Los Angeles. His videos, in which he shows up filming at businesses he has deemed likely to be fraudulent, have been discredited in some cases by media outlets and local authorities but have attracted a viral following and are often cited by Trump administration officials.
The U.S. attorneys who spoke at Thursday’s news conference announcing the strike force stayed away from politics, instead highlighting major fraud cases prosecuted in their districts and noting the evidence of rising healthcare and elderly care fraud in their states.
Assistant Attorney General Colin McDonald, a top official in the newly created National Fraud Enforcement Division of the justice department, may have been taking a jab when he told reporters that “no one should be allowed to rip off the United States of America, and we will not be shrugging our shoulders at those who do.” But he did not reference Democratic politicians or accuse the state government of lax enforcement in his remarks.
The U.S. Senate narrowly approved McDonald’s nomination for the new position in March, voting 52-47, after Democrats expressed concerned about a lack of independence of both the prosecutor and the new division from the White House. Democrats have questioned whether Vance’s role leading a federal task force would bring political machinations into investigative decisions by the prosecutors looking for fraud.
McDonald is a career federal attorney from San Diego. He worked in that city as a federal prosecutor for 10 years, according to reporting by National Public Radio, before moving to Washington, D.C., for a higher profile role in the second Trump administration. At a Senate confirmation hearing for his new post, senators also questioned him about a role supervising the Weaponization Working Group, a task force established by former Attorney General Pam Bondi to root out alleged instances of political bias in the department under President Joe Biden. The group has been part of a widely criticized effort to weed out prosecutors viewed as disloyal to Trump.
Trump administration’s pursuit of fraud allegations
The president announced his anti-fraud task force, and placed Vance in charge of it, after a video by Shirley alleging widespread fraud in Minneapolis daycare centers. Shirley’s allegations were part of the administration’s justification for a harsh immigration crackdown that upturned life in that city for weeks. On Tuesday, FBI agents executed search warrants at various daycare centers in Minneapolis, including some that Shirley visited in his video, according to The Associated Press.
There have not been any publicly announced charges in connection with that investigation.
State and local law enforcement officials participated in the federal government’s Minnesota investigation. On Wednesday night, Vance told a Fox News host federal investigators would scrutinize Gov. Tim Walz as part of that investigation.
In response to the new fraud task force in California, a spokesperson for Newsom accused the Trump administration of continuing to politicize the issue.
“Trump and his right-wing media machine are pushing a fraud narrative about blue states like California to distract from their policy failures — all while ignoring that fraud also occurs in red states,” Marissa Saldivar said in a statement.
“It’s a deliberate distraction,” the statement said. “Here’s the truth Fox News refuses to admit: California is the national model for cracking down on fraud and protecting public dollars. Meanwhile, Trump weakens oversight, lets bad actors skate, and even pardons fraudsters who cozy up to him.”
