California Becomes Latest Target in US Justice Department’s Public Benefits Fraud Crackdown

The United States Department of Justice has charged 15 people in California over alleged healthcare fraud schemes involving nearly $2 billion in fraudulent claims, as the administration of President Donald Trump intensifies its nationwide campaign against the misuse of public funds.

Federal prosecutors announced the charges on Thursday, October 22, 2026, following investigations into alleged fraud involving substance abuse treatment centres, hospice services, unnecessary medical procedures and prescription drug claims.

At least eight defendants were arrested, including six medical professionals among those charged, according to the Justice Department. Prosecutors said the cases involved claims submitted to government-funded and private healthcare programmes, including Medicare and Medi-Cal, California’s Medicaid programme.

The largest case allegedly involved more than $1.6 billion in claims linked to substance abuse treatment facilities accused of providing little or no legitimate treatment. Prosecutors allege that operators and associates recruited vulnerable people, including homeless individuals and people attending addiction recovery programmes, and used their insurance coverage to generate fraudulent billings.

According to court documents cited by prosecutors, some patients were allegedly offered free flights, accommodation, cash, gift cards and other incentives to attend the facilities. Investigators further allege that patients were repeatedly enrolled or moved between facilities to sustain insurance claims, even when the promised treatment was not delivered.

Another case involves a chiropractor and a surgeon accused of participating in a scheme that allegedly generated about $134 million through medically unnecessary artery procedures billed to Medicare. Prosecutors allege that some patients underwent invasive procedures that were not medically justified, with some reportedly subjected to repeat treatments.

The crackdown also includes three alleged hospice fraud schemes involving more than $138 million in claims. Prosecutors say some providers enrolled people who were not terminally ill and billed Medicare for services that were unnecessary or were not provided. A separate case concerns alleged fraudulent prescription claims submitted to Medi-Cal.

The California action comes amid a broader federal push to investigate fraud involving public assistance and government-funded programmes. On October 21, federal officials announced enforcement actions against more than 40 defendants in cases involving nearly $42 million in alleged or proven fraud against the Supplemental Nutrition Assistance Program, commonly known as SNAP, and other United States Department of Agriculture programmes.

The administration has also announced a $25 million whistleblower initiative intended to encourage people to report suspected fraud involving federal funds.

Justice Department officials say the investigations are aimed at protecting taxpayers and ensuring that public resources reach people who qualify for assistance. However, the charges announced in California remain allegations, and defendants are presumed innocent unless proven guilty in court.

The cases are being investigated by federal agencies, including the Federal Bureau of Investigation, the Drug Enforcement Administration, the Internal Revenue Service’s Criminal Investigation division and the Department of Health and Human Services’ Office of Inspector General.

The latest operation places California at the centre of the administration’s expanding fraud-enforcement effort, which has targeted healthcare billing, food assistance and other publicly funded programmes across several states.