Trump announces ‘fraud’ crackdown in Democratic states as arrests begin in California

US president makes baseless claims about fraud in blue states and says JD Vance will lead clampdown as ‘fraud czar’Donald Trump announced a fresh crackdown on “fraud” in Democratic states and tapped JD Vance to lead the charge. Officials swiftly announced a string of arrests in California.In a Truth Social post on Friday, the US president announced that his vice-president is now “in charge of ‘fraud’ in the United States”, claiming the problem is “massive and pervasive” and that Vance’s new role as “fraud czar” will be “a major factor in how great the future of our country will be”.Without citing evidence, Trump said that Vance would focus on “everywhere but primarily in those blue states where crooked Democrat politicians…have had a ‘free for all’ in the unprecedented theft of taxpayer money”.He pointed to California, Illinois, Minnesota, Maine and New York, and alleged fraud is “so large that, if successful, we would literally be able to balance our American budget”, without providing evidence.“Raids have already started in L.A.,” Trump said. Authorities arrested eight people for allegedly perpetrating over $50m in healthcare fraud, largely in southern California, federal officials announced on Thursday.Most of the accused, which include healthcare professionals such as nurses and a psychologist, allegedly schemed to defraud Medicare by running “sham” hospice care facilities where they used people who were not terminally ill as beneficiaries, the US Department of Justice said in a statement.It comes as the US remains engaged in a war on Iran that cost $12.7bn in its first six days. The Trump administration on Friday also put forward a budget proposal under which defense spending would surge to its highest level in decades, while other government programs would face steep cuts.Allies of Trump are meanwhile increasingly alleging that blue states are complicit in fraud.Last December, Trump froze federal childcare funding to Minnesota over such accusations. He has also heavily deployed Immigration and Customs Enforcement (ICE) agents in the state amid controversial immigration raids which resulted in the killings of two Americans, Renee Good and Alex Pretti, as well as widespread protests.In February, Vance announced that the Trump administration would “temporarily halt” more than a quarter-billion dollars in Medicaid funds to Minnesota as part of efforts to ensure the state was a “good steward of the American people’s tax money”.Minnesota’s Democratic governor, Tim Walz, pushed back at the time, saying: “This has nothing to do with fraud.” He added: “The agents Trump allegedly sent to investigate fraud are shooting protesters and arresting children. His DoJ is gutting the US attorney’s office and crippling their ability to prosecute fraud. And every week Trump pardons another fraudster.”Trump has also previously claimed “there is more fraud in California than there is in Minnesota”.In recent months, the Trump administration argued that southern California is rife with healthcare fraud and pledged to crack down, while frequently using the matter politically to criticize the state’s Democratic leadership. Nearly all cases cited by the justice department in the wave of arrests as part of “Operation Never Say Die” were tied to southern California.“The southern California region is a high-risk environment for hospice-related and many other forms of health care fraud,” said Akil Davis, assistant director at the FBI, who claimed that the US loses “hundreds of billions of dollars annually to healthcare fraud”.In response to the news, Gavin Newsom defended his state, saying California has taken action. The governor said that he banned new hospice licenses in 2021 and that the state revoked more than 280 licenses since 2024 and pursued more than 100 criminal cases.“The Trump Administration – home to the biggest fraudsters on Earth – is trying to blame California for issues with THEIR federal programs,” Newsom said. “Glad to see the Feds finally taking seriously the fraud in the programs they themselves manage…only 15 months after Trump took office.”In a news conference announcing the arrests, Dr Mehmet Oz, the Centers for Medicare and Medicaid Services administrator, said his agency planned to review every hospice in California.The Guardian has reached out to the governors’ offices of Illinois, Minnesota, Maine and New York for comment.Since retaking office last January, Trump has granted presidential pardons to dozens of people convicted of white-collar crimes, including several individuals who were convicted of fraud.Meanwhile, earlier this week, Trump delivered a primetime address in which he said: “We’re fighting wars. We can’t take care of day care,” adding: “It’s not possible for us to take care of day care, Medicaid, Medicare – all these individual things, they can do it on a state basis.”