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yesterday

Trump Says Federal Probe Into California Fraud Has Begun

Newsom rejects a $250 billion fraud estimate, citing $125 billion his administration says it blocked.

Steve Hilton speaks at the New Way California Summit at the Hollenbeck Youth Center in Los Angeles on March 21, 2018.
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Republican Candidates Allege Up to $250 Billion in California Fraud, Including Education Scams
The Governor of California Gavin Newsom answers questions to an AFP journalist in the sidelines of the COP30 UN Climate Change Conference in Belem, Para State, Brazil, on November 11, 2025. President Donald Trump's administration may have steered clear of this year's UN climate summit in the Brazilian Amazon, but the conference's second day is nonetheless set to be dominated by the governors of California and New Mexico. (Photo by Mauro PIMENTEL / AFP) (Photo by MAURO PIMENTEL/AFP via Getty Images)

Overview

  • President Trump announced on Truth Social that a California fraud investigation has started, offering no details beyond the post.
  • Republican candidates Steve Hilton and Herb Morgan publicized a preliminary whistleblower-driven review dubbed CALIFRAUDIA that they say points to losses expected to exceed $250 billion.
  • Hilton and Morgan sent a January 4 letter to Attorney General Pam Bondi seeking a federal inquiry and the deployment of FBI Public Corruption and Complex Fraud units to scrutinize federal funds in the state.
  • Newsom’s office dismissed Hilton’s estimate as politically driven and said the governor has blocked more than $125 billion in attempted fraud, with Newsom later posting that he is open to tackling fraud in partnership with federal authorities.
  • Context from prior official actions includes a 2025 federal indictment of former Newsom aide Dana Williamson, a state audit alleging $180 million in misuse at Highlands Community Charter, an independent finding of $1.5 billion in improper jobless payouts, and auditors flagging eight high‑risk state agencies.