Federal officials target California health care fraud, invoke Minnesota prosecutions

First Assistant U.S. Attorney Bill Essayli announced plans to crack down on medical fraud in the Central District of California on Friday, comparing the problem to highly publicized fraud cases in Minnesota.

"We are putting California fraudsters on notice," Essayli said in a press briefing in Los Angeles. "We are going to be aggressive. We're going to find you, we're going to arrest you and we're going to charge you."

Appearing alongside Essayli was Dr. Mehmet C. Oz, administrator of the Centers for Medicare and Medicaid Services (CMS), who praised President Donald Trump for taking a leadership role in the initiative.

"When you have a crisis, you don't want to be surrounded by intellectuals," Oz said. "When you have a crisis, you need to be surrounded by people of action. This president is a man of action."

Oz further stated that California has spent some $1.3 billion in federal funds on health care for illegal immigrants.

Asked to elaborate on this figure after Oz left the conference, Essayli told reporters to follow up with Oz's team for further clarification. An inquiry about the figure submitted to CMS was answered with an email explaining the federal government's responsibility to ensure Medicare funds are used legally but did not give information on the $1.3 billion figure.

Oz further cast doubt on Los Angeles County's hospice care numbers, claiming that the number of hospice patients climbed seven-fold in the past five years.

"That doesn't happen naturally," Oz said. "There aren't seven times more deaths in LA County than there were five years ago."

Asked by a reporter how his team can identify fraudulent activity, Oz said he would scrutinize providers whose patients come solely through Medicare with low or nonexistent death rates.

"You have all the good people who are doing their best to take care of patients, and not everyone gets the perfect result," he said. "If your results are perfect, like 'never have a problem,' you're lying."

Essayli and Oz repeatedly referenced instances of Medicare and Medicaid fraud in Minnesota, though they did not elaborate on specific cases.

Prosecutions are currently ongoing in the case of Minnesota nonprofit Feeding Our Future, where authorities allege that the organization and dozens of affiliated operators exploited pandemic-era waivers in a federal child nutrition program by submitting falsified records claiming to serve tens of thousands of meals daily, while diverting more than $250 million in federal funds for personal use.

Federal prosecutors have also charged several Minnesota defendants in separate but sometimes overlapping fraud schemes involving autism and behavioral health services, particularly through the state's Medicaid-funded Early Intensive Developmental and Behavioral Intervention (EIDBI) program. Authorities allege that some providers submitted false or inflated claims, billed for services that were not provided, or paid families to participate in fraudulent diagnoses and treatment records.

Oz seemed to reference the latter cases in his remarks on Friday, arguing that fraudsters typically move from field to field within the medical system.

"When you stomp on hospice, those criminals don't go away; they just move over to home health care," he said. "You stomp on home health care, they're going to move to pharmacy and illegal medication. You stomp on that, they're going to do the behavioral therapy. All of a sudden, every child is going to have autism because they're going to pay the parents to lie. That's happened in Minnesota."

Essayli pointed to recent instances of fraud in California, including a Montclair pharmacy charged with submitting over $300 million in fraudulent Medi-Cal claims in 2024 and a Glendale woman sentenced to 108 months in federal prison in August for participating in a scheme involving some $10.6 million in fraudulent claims.

The U.S. Attorney laid blame for these instances at the feet of Gov. Gavin Newsom, whom Essayli referred to as "the king of fraud." He pointed to massive unemployment insurance fraud during the pandemic, which he said resulted in $30 billion going to overseas fraudsters, as well as the state's high-speed rail project, the projected cost of which he said has climbed to $100 billion with no completion in sight.

Attempts by phone and email to obtain a response from Newsom's office Friday afternoon were unsuccessful.

Essayli also took a moment at the end of the briefing to address Wednesday's shooting to death of a woman in Minneapolis whom federal officials have said tried to run over the officer -- a claim that is questioned by local officials and some bystanders.

"I don't know where people got the notion that if you disagree with our immigration laws, it is OK to oppose federal law enforcement," he said. "It is not OK. It is illegal. And if you use your car to ram a police officer or a federal agent, they're going to use deadly force."