It didn't start with pandemic relief; unfortunately, it didn't end there either. Why does so much fraud persist in California?

California did not wake up one morning during the pandemic and suddenly become vulnerable to fraud. COVID may have poured gasoline on the fire, but that fire was already burning.

It’s (part of the reason) why taxes are so punishingly high in California.

The newest scandal — the explosion of suspicious hospice providers in Los Angeles County and the federal-state crackdown that followed — is not an isolated horror story. It is the latest illustration of a much larger pattern: money moving quickly through giant public systems with weak oversight, minimal verification, and too little fear of consequences. The result is not just waste. It is an ecosystem.

Why is nothing being done?

Look at the hospice mess. A California state audit back in 2022 found patterns in Los Angeles County that, in the auditor’s words, “strongly suggest” fraud and abuse: explosive growth in hospice licenses, tight geographic clustering, suspiciously long stays, high rates of patients discharged alive, and employees tied to large numbers of agencies. The numbers were astonishing. From 2010 to 2021, the number of hospice agencies in Los Angeles County increased by 1,589%, while the average hospice there served just 4.6 patients a day, compared with 56.3 elsewhere in California. That is not normal market growth. That is a warning flare.

And yet the system kept humming. Why?

This spring, CBS News reported that more than 700 of the roughly 1,800 hospices in Los Angeles County triggered multiple red flags for fraud. Federal prosecutors then announced arrests in what they called “Operation Never Say Die,” and California Attorney General Rob Bonta later unveiled charges against 21 suspects in a $267 million hospice fraud scheme. That means the public was not imagining this. The rot was real, and it was deep.

But hospice is only one window into the broader problem. California’s Employment Development Department became infamous during the pandemic for allowing an avalanche of fraudulent unemployment claims. State auditors said inadequate fraud controls led to more than $30 billion in potentially fraudulent payments, and by late 2025 the auditor still had EDD on the state’s “high-risk” list because of inadequate fraud prevention. More recently, the U.S. Department of Labor cited those same failures in announcing a new federal probe.

Then there is Medi-Cal. Just this month, the Justice Department announced that a California man pleaded guilty to submitting nearly $270 million in fraudulent Medi-Cal claims for expensive prescription drugs that were medically unnecessary or never provided. Again, the issue is not only the brazenness of the scheme. It is the size of the opening that allowed it.

So why does this keep happening?

Part of the answer is scale. California is enormous. Its economy is huge. Its bureaucracy is sprawling. Its public-benefit systems move vast sums of money through a maze of state agencies, county agencies, contractors, vendors, and quasi-public intermediaries. Any large system attracts thieves. But California often seems to offer something more attractive than size alone: complexity without enough control.

Another part of the answer is ideology. For years, too many officials have treated verification, enforcement, and skepticism as vaguely embarrassing — or worse, as morally suspect. Ask basic questions, tighten eligibility checks, demand documentation, and someone will say you are being cruel, suspicious, or unfair to the vulnerable. Of course legitimate recipients should not be harassed. But a system that is afraid to verify is a system that is begging to be looted.

And then there is the culture of urgency. California has repeatedly shown a preference for getting money out the door first and asking hard questions later, if ever. The most generous read on this is compassion. Sometimes from politics. Sometimes from bureaucratic panic. At least part of it must be chalked up to ineptitude. Other parts could presage something worse. Like official graft.

But once speed becomes the highest value, fraudsters understand the game immediately. They know overwhelmed agencies will miss things. They know fragmented oversight creates blind spots. They know enforcement takes longer than billing.

Worst of all, the consequences have too often seemed slow, scattered, and optional. The state auditor warned about hospice years ago. The EDD debacle became national scandal years ago. Yet one still gets the sense that California’s political class is more comfortable talking about fraud than building a culture that truly fears it. It is easier to announce a task force than to create a government in which scammers believe they will be caught early and punished hard.

Fraud persists in California because the incentives have favored it. There is a lot of money, a lot of bureaucracy, a lot of ideological reluctance to police the edges, and not enough sustained accountability when obvious warnings appear.

This did not begin with pandemic relief. It did not end with pandemic relief. And it will keep happening until California relearns an unfashionable lesson: compassion without scrutiny is not kindness. In government, it is often just an engraved invitation to thieves.

(Contributing writer, Brooke Bell)