A sweeping federal investigation has put California Governor Gavin Newsom under intense scrutiny, with a top federal prosecutor branding him the “king of fraud.” The probe was launched as part of a broader Trump administration crackdown on misuse of taxpayer money and it centers on billions spent under Newsom’s watch with little accountability.
The label comes from Bill Essayli, First Assistant U.S. Attorney for the Central District of California, who made the comments during an appearance on Fox & Friends. Essayli accused Newsom of a severe lack of oversight, arguing that state leadership allowed fraud to flourish in major government programs, especially those tied to homelessness spending.
President Donald Trump directed federal agencies to examine large public spending programs for fraud, not only in Minnesota but also in California. Trump publicly stated that a fraud investigation into California has begun, suggesting the state may be even more corrupt than others already under federal investigation. The focus is on how taxpayer money was distributed and whether state leaders failed to monitor where it went.
At the center of the investigation is California’s massive homelessness budget. According to Essayli, the state has spent $24 billion over the last five years on homelessness programs and cannot fully account for where that money went. He alleges that weak oversight and political negligence created an environment where fraud was easy and profitable.
Episodes of Fraud Rampant
The federal task force launched in April has already produced criminal charges. Two real estate executives were charged with using homeless housing grants for personal gain. The alleged fraud involves millions of dollars and includes charges such as mail fraud, bank fraud, money laundering, and identity theft. Essayli has described these cases as only the tip of the iceberg and said more charges are expected soon.
While fraud has been charged in court, the broader concern is the tens of billions spent by the state with limited tracking or results. Republican lawmakers argue that with that level of funding, California could have dramatically reduced homelessness. Instead, sprawling encampments remain, while taxpayers are left wondering where their money actually went.
Trump has been blunt, publicly mocking Newsom and accusing his administration of deep corruption. The White House confirmed that Trump ordered all agencies to aggressively investigate fraud in California spending programs and to prosecute anyone involved to the fullest extent of the law.
Newsom’s Defense Falls Flat for Critics
Newsom’s press office pushed back hard, claiming the governor has blocked over $125 billion in fraud and arrested criminals abusing state programs. Critics say those claims only reinforce the argument that fraud is rampant and that Newsom’s leadership failed to prevent it in the first place.
Republican state lawmakers welcomed the investigation, saying accountability is long overdue. They argue California does not have a revenue problem but a spending problem and that wasted dollars come directly from hardworking citizens during an affordability crisis.
Vice President JD Vance has also criticized California’s policies, accusing the state of openly providing welfare benefits regardless of immigration status. He warned that political corruption allows people to get rich off taxpayer generosity and said that system must be shut down.
Newsom’s National Ambitions Tainted
For critics, the investigation reinforces a central argument against Newsom as a potential presidential contender. They say a governor who presided over tens of billions in untracked spending, widespread fraud allegations, and visible policy failures has no business seeking higher office. To them, the corruption probe is not just about California. It is a referendum on Newsom’s competence and credibility.
As federal investigators dig deeper, the stakes continue to rise. With more charges expected and billions already under suspicion, the label “king of fraud” is becoming a defining political burden that Newsom may not be able to escape.
