California's $250B Fraud Allegations Tip of the Iceberg

Could Eclipse Minnesota's Notorious Welfare Rip-Off

Exclusive: California risks $250B fraud, GOP candidates claim after collecting whistleblower tips | Joe Burn, New York Post

California could be losing a staggering $250 billion in taxpayer cash through rampant fraud, waste, and abuse — according to a Republican-backed analysis of whistleblower tips.

Steve Hilton, who is running for governor, and Herb Morgan, who is seeking the state controller job, unveiled findings from their “CALIFRAUDIA” tip-line investigation — a damning review of the Golden State’s bloated welfare system, which they allege has become a piggy bank for scammers and political hacks.

The explosive allegations come after the duo collected hundreds of whistleblower tips through their website Califraud, painting a picture of systematic looting across major state programs.

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“This is what you get from 16 years of one-party rule,” Hilton is expected to thunder at a Monday afternoon press conference in San Francisco. “Corruption, fraud and abuse on an epic scale. Gavin Newsom and the corrupt Democrat machine have stolen our money and handed it out to corrupt cronies and political front groups.”

“Who is Steve Hilton? We don’t respond to MAGA made-up numbers. In the actual world where adults govern, Governor Newsom has been cleaning house,” said Izzy Gardon, Newsom’s spokesperson, in a statement. “Since taking office, he’s blocked over $125 BILLION in fraud, arrested criminal parasites leaching off of taxpayers, and protected taxpayers from the exact kind of scam artists Trump celebrates, excuses, and pardons.”

The Republican candidates fired off a formal letter to Attorney General Pam Bondi and federal inspectors general, demanding the FBI’s Public Corruption and Complex Fraud units swoop in to investigate.

They’re also demanding independent audits of Medi-Cal, CalFresh, CalWORKs, and housing programs — and want real-time public tracking of every state payment.

The California state auditor’s recent High Risk Report already flagged systemic problems across CalFresh, unemployment insurance, Medi-Cal eligibility, and financial reporting.

Hilton and Morgan also allege widespread pay abuse within the state’s K–12 education system, and noted the known problem of fake community college applications designed to grift student aid funds. Prior reports from the California state auditor have described a lack of accountability in homelessness and social welfare funding that raises the risk of fraud and waste.

But the poster child for California’s catastrophic incompetence? The unemployment insurance disaster during COVID, when the state admitted losing more than $55 billion to fraudsters — including international crime syndicates.

California watchdogs raised the alarm about waste and bloat in the state’s budget after bombshell revelations in Minnesota found rampant theft of COVID-era social services funds.

The widespread scam involved members of the Somali community creating fake nonprofits and billing the state for services that were never provided.

READ: NY Post ‘California at Risk of 250 Billion Fraud!’

Report Suspected Fraud Here: Califraud

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The CALIFRAUDIA report is a preliminary analysis released in early January 2026 by Republican gubernatorial candidate Steve Hilton and state controller candidate Herb Morgan.

LISTEN: Herb Morgan visits with Reclaim San Diego and shares his vision to clean up waste, fraud, and abuse! Click Below.

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