US President Donald Trump has announced a fresh crackdown on fraud in Democratic-controlled states, appointing Vice-President JD Vance as his ‘fraud czar’ to lead the initiative. In a post on Truth Social, Mr Trump claimed, without providing evidence, that fraud is ‘massive and pervasive’ and that tackling it would help balance the American budget.
Mr Trump specifically named California, Illinois, Minnesota, Maine and New York as targets, alleging that ‘crooked Democrat politicians’ have enabled a ‘free for all’ in the theft of taxpayer money. The announcement came as federal officials confirmed arrests in California related to healthcare fraud.
Eight people were arrested on Thursday in connection with an alleged scheme to defraud Medicare of more than $50m through ‘sham’ hospice care facilities. According to the US Department of Justice, the accused – including nurses and a psychologist – used individuals who were not terminally ill as beneficiaries.
The crackdown follows months of tension between the Trump administration and Democratic states over fraud allegations. In December, Mr Trump froze federal childcare funding to Minnesota, and earlier this year, the administration temporarily halted more than $250m in Medicaid funds to the state.
Minnesota Governor Tim Walz has criticised the moves, stating that they have ‘nothing to do with fraud’ and accusing the administration of prioritising political attacks over genuine oversight. Meanwhile, California Governor Gavin Newsom defended his state, noting that it had banned new hospice licenses in 2021 and revoked over 280 licences since 2024.
The Trump administration has also engaged in controversial immigration raids in Minnesota, which resulted in the deaths of two Americans and widespread protests. The latest healthcare fraud arrests are part of a broader operation, ‘Operation Never Say Die’, focused on southern California, which the FBI described as a ‘high-risk environment’ for such crimes.
