Fraud in a California social program causes losses of up to $12 billion a year
The program was designed to pay people who care for elderly or disabled relatives in their homes, avoiding their institutionalization. However, its structure has generated incentives that facilitate corruption.
A man walks in the sun in Redondo Beach, Calif.
The California state welfare system faces billions of dollars in annual losses due to fraud, especially within the Medi-Cal-funded In-Home Supportive Services Program (IHSS), with a budget of $30 billion.
The information came to light in a report by City Journal which detailed that the IHSS has become one of the main fraud hotspots in the country, with estimated losses of up to $12 billion a year.
In that regard, the media outlet spoke with a veteran California law enforcement official, who requested anonymity. The officer detailed that "this kind of fraud has been happening for decades in California."
A structure that facilitates corruption
The former official was involved in investigations related to Medi-Cal. According to him, many cases do not prosper because judges often dismiss the charges or reduce them to misdemeanors, which avoids prison sentences.
In addition, the interview revealed that the testimony indicates that the authorities prioritize only large frauds, generally above $200,000. Even cases up to $500,000 are not always investigated at the federal level.
"The justice system ends up reducing fraud charges down to a misdemeanor and giving offenders community service. They never go to jail—that’s just the way California operates. As a member of law enforcement, you put your heart and soul into a case, turning every stone to prove that the suspect is a dirtbag. Then it goes to trial, and his case gets pled down, because the government sympathizes with IHSS providers," the source stressed.
Politics
According to Bessent, fraud in the federal government could amount to $500 billion a year
Joaquín Núñez
The former official also described organized fraud schemes, in which individuals acquire multiple homes to house beneficiaries in precarious conditions while receiving payments from the state. In some cases, victims are cut off from their families and lose control of their finances.
Meanwhile, recovery of money is virtually non-existent. Although claims are sent to those responsible, no effective measures such as garnishments or asset freezes are enforced.
"That money just sits there. No one is going to chase it. The government is not going to claw it back or try to freeze assets. By the time anyone noticed, it was too late to bring a case," he said.
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