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This piece is part of MI x DW, a collaboration that brings Daily Wire readers exclusive commentary and research from the Manhattan Institute\u2019s world-class team of scholars.<\/span><\/em><\/p>\n In this piece, <\/span>originally published in City Journal<\/span><\/a>, Christopher Rufo and Kenneth Schrupp investigate California\u2019s IHSS home-care program, arguing that weak oversight has allowed massive fraud while politically connected unions profit from its expansion.<\/span><\/em><\/p>\n * * *<\/p>\n California Governor Gavin Newsom is <\/span>embroiled<\/span><\/a> in a national fraud scandal. Thus far, much of the coverage has focused on alleged schemes related to <\/span>unemployment<\/span><\/a> insurance, <\/span>hospice care<\/span><\/a>, and food stamps. In this exclusive investigation, we shine a light on one of California\u2019s <\/span>largest<\/span><\/a> initiatives: the In-Home Supportive Services Program, or IHSS, which <\/span>pays<\/span><\/a> family members and other individuals to provide home-based care for the elderly and disabled \u2014 at a <\/span>cost<\/span><\/a> of nearly $30 billion per year.<\/span><\/p>\n On the surface, IHSS presents itself as an instrument of compassion, directing billions to caregivers who <\/span>help<\/span><\/a> with cooking, personal care, laundry, and other daily needs inside recipients\u2019 homes. But a growing number of experts and <\/span>critics<\/span><\/a> argue that the program is rife with fraud, losing roughly an estimated $6 billion to $12 billion yearly to scammers. Meantime, the state\u2019s powerful home-care unions collect more than $149 million in membership dues, funneling money into the political network supporting Newsom and California Democrats.<\/span><\/p>\n This is the story of a government that has allowed compassion to become a mask for fraud, creating a self-reinforcing system that keeps the Democratic establishment in power.<\/span><\/p>\n In 1973, California <\/span>created<\/span><\/a> what became the IHSS program to provide in-home care to the elderly and disabled. The IHSS caseload <\/span>exploded<\/span><\/a> in the 1980s, prompting the state to impose hour caps on care providers. California <\/span>offers<\/span><\/a> the program through Medi-Cal, its version of Medicaid, and <\/span>pays<\/span><\/a> providers with a combination of federal, state, and county funds.<\/span><\/p>\n IHSS has long been considered a magnet for fraud. In 2009, then-Governor Arnold Schwarzenegger <\/span>estimated<\/span><\/a> that up to 25 percent of IHSS claims were fraudulent. A Sacramento grand jury report that year <\/span>found<\/span><\/a> that providers had \u201cno meaningful oversight, no assessment of skills to meet client needs, no monitoring of the validity of service hours, and no background checks.\u201d<\/span><\/p>\n After growth of the program\u2019s rolls <\/span>exploded<\/span><\/a> in the early 2000s, Schwarzenegger <\/span>signed<\/span><\/a> legislation aimed at curbing abuse, requiring IHSS providers to <\/span>undergo<\/span><\/a> criminal background checks and introducing random claim <\/span>reviews<\/span><\/a>.<\/span><\/p>\n But soon after the law\u2019s passage, a state workgroup, teaming with representatives from \u201clabor organizations,\u201d <\/span>introduced<\/span><\/a> a key loophole. Citing concerns about disruptions for \u201cvulnerable members of the IHSS community,\u201d the task force barred regulators from conducting fully randomized, unannounced home visits, leaving the program more exposed to scammers.<\/span><\/p>\n Since then, the program has <\/span>expanded<\/span><\/a> dramatically again. \u201cIHSS provider\u201d has <\/span>become<\/span><\/a> the largest low-wage occupation statewide, with more than 800,000 taxpayer-funded <\/span>caregivers<\/span><\/a> offering<\/span><\/a> everything from grocery shopping to personal care.<\/span><\/p>\n Applying for IHSS care is straightforward. First, a prospective beneficiary <\/span>files<\/span><\/a> a California Department of Social Services application. Second, a county social worker <\/span>visits<\/span><\/a> his home to determine his need for care. Third, the county or public authority <\/span>reviews<\/span><\/a> the application and, if it approves, designates the applicant as a beneficiary, who can then use taxpayer funds to hire the caregiver of his choice \u2014 in more than <\/span>70 percent<\/span><\/a> of cases, a direct family member.<\/span><\/p>\n The system operates largely on trust. Providers self-report their timecards and check-in records. In roughly 60 percent of cases, providers and beneficiaries <\/span>live together<\/span><\/a>, delivering care in private homes \u2014 typically without the threat of random, unannounced visits.<\/span><\/p>\n County-level fraud controls appear to be lacking. State regulations <\/span>prevent<\/span><\/a> IHSS staff from making unannounced visits unless a whistleblower files a \u201cspecific\u201d complaint or regulators identify clear red flags. Even when complaints are lodged, investigations apparently can be slow, and prosecutions slower still. According to the state\u2019s Department of Social Services, for one 12-month period between 2023 and 2024, counties <\/span>received<\/span><\/a> nearly 7,000 fraud complaints; 28 counties recorded 964 fraud investigations, resulting in just 39 cases prosecuted.<\/span><\/p>\n County-level regulators face additional problems. A 2021 Riverside County <\/span>audit<\/span><\/a> claimed that the local IHSS program did \u201cnot adhere to review and approval procedures for program integrity referrals.\u201d In addition, more than 60 percent of county staff at the Department of Public Social Services, which, according to the auditor, handles program oversight, were IHSS providers themselves \u2014 meaning they had an interest in maintaining the status quo.<\/span><\/p>\n California, in other words, is sending <\/span>billions<\/span><\/a> of dollars per year to a program that is easy to exploit, difficult to administer, and almost impossible to supervise.<\/span><\/p>\n In 2024, the federal government began a series of enforcement actions. As part of a nationwide crackdown on health-care-related crimes, the United States Department of Justice announced <\/span>prosecutions<\/span><\/a> for alleged IHSS fraud in California.<\/span><\/p>\n In one case, the DOJ alleged that San Dimas resident Giacomo Lorenzo Garbarino billed the state for more than $170,000 in fraudulent IHSS and Medi-Cal services over a five-year period. The patient in his care was reportedly hospitalized or living in a facility at the time and thus ineligible for IHSS reimbursement. In another case, Joseph Depiazza allegedly billed the state for more than $50,000 in fraudulent IHSS services. According to prosecutors, he kept submitting claims after the patient entered the hospital \u2014 and even after she had died.<\/span><\/p>\n Last year, federal officials <\/span>announced<\/span><\/a> another round of IHSS fraud prosecutions. In one case, prosecutors alleged that Maryam Erambakhsh falsely claimed payments for caring for her parents while they were outside the United States. In another, Cindy Lynn Fromm allegedly billed the program for more than a year of services while the recipient was incarcerated.<\/span><\/p>\n These cases may be the tip of the iceberg. Haywood Talcove, CEO of LexisNexis Risk Solutions for Government and a nationally recognized fraud expert, estimates that annual IHSS fraud could amount to 20 percent to 40 percent of total program spending. Applied to projected IHSS outlays for fiscal year 2025\u201326, that suggests roughly $6 billion to $12 billion in losses. Multiple senior officials at the Department of Health and Human Services have described a similar pattern, estimating that about 25 percent of the Medi-Cal budget is lost to fraud. The share is likely higher for IHSS, given the program\u2019s structure and its susceptibility to abuse.<\/span><\/p>\n Earlier this year, Mehmet Oz, head of the Centers for Medicare and Medicaid Services, set off a firestorm of controversy with the <\/span>claim<\/span><\/a> that criminal networks, including the \u201cRussian Armenian mafia,\u201d were running massive hospice and home care scams in Los Angeles. He <\/span>suggested<\/span><\/a> that Armenians in Los Angeles were disproportionately represented among the leaders of hospice fraud rings.<\/span><\/p>\n One red flag for social-services fraud, Talcove suggested, is high community usage rates, and Armenian speakers in Los Angeles do appear to be significantly overrepresented among the county\u2019s IHSS providers and recipients. Armenian speakers represent 14.6 percent of IHSS recipients and 6.5 percent of IHSS caregivers, per state data. People who speak Armenian fluently and English less than \u201cvery well,\u201d however, <\/span>make up<\/span><\/a> just 0.8 percent of L.A. County\u2019s population, according to Census data. Assuming that these Armenian speakers are identical to self-reported Armenian speakers in IHSS data, Armenian speakers who speak English less than \u201cvery well\u201d are 18 times more likely to be IHSS recipients and eight times likelier to be IHSS caregivers than their share of the county population would suggest.<\/span><\/p>\n These high utilization rates do not, on their own, prove fraud. But analysts such as Talcove argue that \u201corganized criminal groups\u201d are \u201ctaking advantage of the program at scale.\u201d Using a conservative 25 percent fraud estimate \u2014 within Talcove\u2019s range and consistent with HHS officials\u2019 broader Medi-Cal assessments \u2014 scammers may have siphoned at least $35 billion from IHSS during Gavin Newsom\u2019s administration. \u201cThere\u2019s virtually no incentive for them to stop,\u201d Talcove said. \u201cCalifornia has limited to no controls in place.\u201d<\/span><\/p>\n Perhaps the biggest beneficiaries of California\u2019s IHSS program are labor unions, which have <\/span>enrolled<\/span><\/a> more than 600,000 IHSS providers. Two leading unions for the state\u2019s in-home care workforce, <\/span>SEIU Local 2015<\/span><\/a> and United Domestic Workers (<\/span>UDW<\/span><\/a>), collectively <\/span>raked<\/span><\/a> in<\/span><\/a> more than $149 million in dues in 2024. Both have a direct stake in the program\u2019s expansion, since every new IHSS worker is a <\/span>potential<\/span><\/a> dues-paying <\/span>member<\/span><\/a>.<\/span><\/p>\n These unions are some of the most powerful institutions in California politics and collectively send millions of dollars to the state\u2019s Democratic establishment. SEIU Local 2015 <\/span>contributed<\/span><\/a> $2 million to Newsom\u2019s anti-recall campaign; <\/span>spent<\/span><\/a> another $2 million in favor of Proposition 50, a measure to <\/span>redraw<\/span><\/a> the state\u2019s congressional districts in favor of Democrats; and donated over $90,000 to Newsom across his <\/span>two<\/span><\/a> campaign<\/span><\/a> years. UDW <\/span>donated<\/span><\/a> $20,000 to Newsom\u2019s 2022 reelection campaign. Both unions have <\/span>contributed<\/span><\/a> heavily<\/span><\/a> to Democrats.<\/span><\/p>\n SEIU Local 2015 and United Domestic Workers of America have also allegedly used coercive tactics to expand their membership. Nathan Vu, a caregiver in San Diego, says that UDW pressured him to join during his IHSS orientation in February 2024. Though he says he declined, the union allegedly began deducting dues from his paycheck anyway.<\/span><\/p>\n \u201cI vividly remember not wanting to enroll in the union,\u201d Vu said. \u201cI specifically said no.\u201d Vu says he told UDW to stop deducting dues and demanded that they provide a copy of his membership agreement and proof of authorization. UDW, he claims, provided neither and kept deducting dues for a full year before terminating his membership.<\/span><\/p>\n UDW did not respond to our request for comment.<\/span><\/p>\n SEIU 2015, which <\/span>claims<\/span><\/a> to represent \u201cthousands of long-term care workers,\u201d has allegedly one-upped UDW. According to one former member, the group locked IHSS workers in a room and \u201ccoerced\u201d at least one to become a member.<\/span><\/p>\n In a sworn <\/span>statement<\/span><\/a> filed as part of a lawsuit against the union, Chaquan May alleges that, in September 2023, the union \u201ccoerced\u201d her into signing up for a membership at an IHSS orientation. May claimed that union employees locked the doors and told her and the other new IHSS providers, \u201cwe\u2019re waiting for everyone to sign \u2026 no one is leaving until everyone signs.\u201d<\/span><\/p>\n May claimed to have signed under duress. On September 3, 2024, she alleged, the union began deducting dues. She claimed to have sent a certified-mail opt-out letter the following day, which the union allegedly ignored. SEIU Local 2015, which did not respond to our request for comment, allegedly continued deducting dues from her paycheck until at least April 2025.<\/span><\/p>\n Unfortunately for May and other allegedly mistreated IHSS workers, these disputes between public employees and their unions are handled by the California Public Employment Relations Board (PERB). Each of the board\u2019s five <\/span>members<\/span><\/a> is appointed by the governor, and three of the current members have former union ties.<\/span><\/p>\n \u201cThe Public Employment Relations Board is run by former union officials,\u201d said Shella Alcabes, a lawyer representing May and other plaintiffs. \u201cYou think I\u2019m going to get a fair hearing there? Absolutely not.\u201d<\/span><\/p>\n The system itself seems designed to prevent accountability. Governor Newsom is responsible for all the main components of the IHSS operation: he oversees the program, the enforcement, and, effectively, the Public Employment Relations Board. He has no incentive to crack down on a program that is enriching his most powerful allies, and, according to coauthor Schrupp\u2019s <\/span>reporting<\/span><\/a>, is responsible for more than 40 percent of the net jobs created during his administration. And so, the system expands.<\/span><\/p>\n Despite making some initial noise about reforming the program last year, for this upcoming budget season, Governor Newsom has <\/span>sought<\/span><\/a> to increase IHSS funding by an additional $1.1 billion, to a total of $33.4 billion, <\/span>boasting<\/span><\/a> that his administration has invested billions of state taxpayer dollars into the program. (When we reached out to Newsom\u2019s office for this story, a California Department of Social Services spokesman said that \u201c[f]raud in the IHSS program is not widespread.\u201d)<\/span><\/p>\n Given these political realities, the only plausible check on IHSS may come from Washington. The Trump administration could condition federal funding on rigorous audits and structural reforms. HHS Secretary Robert F. Kennedy Jr. could require California to mandate re-registration of all caregivers and recipients using third-party identity verification and expand random, unannounced visits.<\/span><\/p>\n Absent such intervention, the corruption in California is unlikely to abate. It will take a countervailing authority \u2014 willing to confront not only fraudsters but also the political system that sustains them \u2014 to force meaningful change.<\/span><\/p>\n * * *<\/p>\n