A Memphis rapper named “Nuke Bizzle” stole $700,000 from California’s unemployment system using stolen identities. An Aryan Brotherhood leader ran an EDD fraud ring from behind bars. A neo-Nazi gang filed fake claims on Facebook. And 133 inmates on death row — death row — collected unemployment checks.
Welcome to the Golden State, where the fraud is bipartisan and the oversight is fictional.
A new City Journal investigation by Chris Rufo and his team has tallied the damage: $180 billion stolen from California taxpayers during Gavin Newsom’s tenure as governor. Not wasted. Not “improperly allocated.” Stolen. By criminals, cartels, con artists, and state employees who apparently decided that if the criminals were going to take it anyway, they might as well get theirs too.
Let’s walk through the receipt, because the individual numbers are even more staggering than the total.
Start with unemployment insurance. California’s Employment Development Department admitted to $20 billion in fraudulent pandemic claims. Independent fraud specialist Haywood Talcove puts the real number at $32.6 billion. The EDD had two — two — bureaucrats assigned to inspect fraud reports. Two people monitoring a system that was hemorrhaging billions. That’s not understaffing. That’s a design choice.
Then there’s Medi-Cal, California’s Medicaid program, which Newsom doubled from $93.5 billion to nearly $197 billion. Apply the federal government’s own conservative 15 percent fraud estimate and you get $146 billion in losses since 2019. Federal HHS sources say the real fraud rate is closer to 25 percent. Three pharmacists were charged in a $178 million prescription fraud scheme. A facility operator pocketed $2.3 million in kickbacks from addiction centers. Medi-Cal has been on the state auditor’s “High Risk” list every single year since 2007. Nineteen years of warnings. No one listened. The warnings exist to be filed, not read.
In-Home Supportive Services — the state’s program for caregivers — saw a 170 percent funding increase under Newsom. It now costs $33.4 billion per year. Seventy percent of the cases involve family members as paid “providers.” Arnold Schwarzenegger estimated a 25 percent fraud rate back in 2009. The state responded by making random home visits explicitly prohibited. You read that correctly. The state banned the one tool that could catch fraud in a program where fraud was already rampant. In one county audit, 41 of 68 county staff were themselves IHSS providers — the people running the program were also billing it.
Homelessness? California spent $24 billion over five years. A federal prosecutor said “no one can account for where that money has really gone.” One CFO embezzled $2.2 million for exotic cars. Another used fake bank statements to buy an $11.2 million house and flipped it for $27.3 million. The CEO of a nonprofit called “Abundant Blessings” pocketed over $10 million for lavish vacations. His blessings were certainly abundant.
Even CalFresh — food stamps — doubled from $8 billion to $16 billion under Newsom. Romanian organized crime rings have been arrested multiple times for skimming EBT cards, with 50-plus people charged just last month.
And who was Newsom’s chief of staff while all this was happening? Dana Williamson, who was charged in November 2025 with siphoning campaign and COVID-19 recovery funds. She received a $50,000 payout for “unused vacation” even after the investigation was underway. The fish rots from the head, and this fish has been decomposing since Sacramento.
Here’s what $180 billion looks like in context. California’s entire annual budget is roughly $300 billion. Newsom’s government lost more than half a year’s budget to fraud over the course of his tenure. If California were a private company, the SEC would have shut it down, arrested the board, and padlocked the building. But California isn’t a company. It’s a state. And when a state loses $180 billion, no one gets fired. The governor runs for president instead.
A state senator named Lola Smallwood-Cuevas actually proposed raising the felony welfare fraud threshold from $950 to $25,000. Because apparently the solution to $180 billion in fraud is to make it harder to prosecute. If you apply Newsom’s logic to the rest of civilization — ignore the problem, ban the tools to detect it, punish anyone who measures it, and then campaign on compassion — you don’t get good government. You get California.
And California is exactly what you get.
