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The Fraud Epidemic: Trump's DOJ Targets Billions in Stolen Tax Dollars · The 47 Morning Update with Ben Ferguson

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  Speaker 1: It's going to end soon, but because they can't go on,
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  Speaker 3: You're listening to the 47 Morning Update with Ben Ferguson.
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  Speaker 1: Good Tuesday morning.
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  Speaker 2: Nice to have you with us on the 47 Morning Update.
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  Speaker 1: And we've got several big stories for you.
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  Speaker 2: The Trump administration's fraud crackdown is now uncovering another massive scheme.
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  Speaker 2: 12 people are now charged in an alleged $ 10 million
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  Speaker 2: California daycare fraud operation. And the DOJ says this is
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  Speaker 2: just the tip of the iceberg. They also have much
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  Speaker 2: bigger nationwide indictments that I'm going to break down for
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  Speaker 2: you as well. And those are costing you not millions,
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  Speaker 2: but billions of dollars of your tax dollars going to
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  Speaker 2: foreign countries. Now, I have all those details for you,
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  Speaker 2: and I'm going to get to that in just a moment.
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  Speaker 1: It's the 47 Morning Update, and it starts right now.
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  Speaker 1: Story number one. Fraud is something we focus on often
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  Speaker 1: on this show, and it seems that we keep finding
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  Speaker 1: a lot more of it. This time, even more shocking,
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  Speaker 1: and yet again, coming out of, yeah, California.
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  Speaker 2: The Justice Department has announced that 12 individuals have now
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  Speaker 2: been charged in Southern California in what they're describing as
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  Speaker 2: an alleged home daycare massive fraud scheme involving more than
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  Speaker 2: $ 10 million in taxpayer-funded child care money. And wait until
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  Speaker 2: you hear how prosecutors say this actually worked. The money
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  Speaker 2: was supposed to help, quote, low-income families pay for child care. Instead,
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  Speaker 2: the federal prosecutors now allege that millions of dollars were
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  Speaker 2: funneled to bogus or fraudulent daycare operations that were claiming
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  Speaker 2: taxpayer money for child care they allegedly were not actually providing.
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  Speaker 1: Sound familiar?
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  Speaker 2: It's awful close to what we found in Minnesota. Now,
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  Speaker 2: this wasn't a tiny investigation either. According to the U.S.
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  Speaker 2: Attorney's Office for the Southern District of California, more than
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  Speaker 2: 250 federal, state, and local law enforcement personnel participated in
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  Speaker 2: the coordinated takedown. They said that all 12 defendants were arrested,
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  Speaker 2: and authorities executed search warrants at 12 different San Diego
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  Speaker 2: area homes that claimed to be operating as child daycare facilities.
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  Speaker 1: They were not. They were homes.
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  Speaker 2: Now, the details in the federal complaint are extraordinary as well.
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  Speaker 2: Prosecutors say the system, well, this is how it worked.
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  Speaker 2: The defendants obtained California licenses to operate home child care facilities.
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  Speaker 2: They then registered with organizations administering subsidized child care for
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  Speaker 2: eligible families. In essence, this is another form of welfare. Now,
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  Speaker 2: to get paid, daycare providers were required to submit attendance
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  Speaker 2: records documenting which children were actually being cared for, along
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  Speaker 2: with the dates and times that they were there.
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  Speaker 1: That's pretty straightforward.
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  Speaker 2: You take care of a child, you document it, the
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  Speaker 2: government reimburses you, and that's how the system works. But
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  Speaker 2: prosecutors allege these defendants submitted false attendance records claiming children
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  Speaker 2: were receiving daycare when they weren't. And investigators apparently decided
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  Speaker 2: to test those claims against reality.
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  Speaker 1: They conducted surveillance.
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  Speaker 2: One defendant allegedly claimed he cared for 23 children in
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  Speaker 2: March of 2026 and 25 children in April and that
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  Speaker 2: he provided child care every single day during those two months.
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  Speaker 2: Federal investigators say surveillance covered 57 days during that period.
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  Speaker 2: And guess how many days they allegedly saw children entering
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  Speaker 2: or leaving the facility. One time, one day out of 57.
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  Speaker 1: And here's the remarkable part.
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  Speaker 2: According to the federal complaint, that one day happened to
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  Speaker 2: be a day a state inspector arrived for an unannounced inspection.
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  Speaker 2: Prosecutors say the children and even the daycare operator himself
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  Speaker 2: showed up after the inspector arrived.
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  Speaker 1: That's what federal prosecutors are alleging.
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  Speaker 2: Now, what's crazy is the story gets even, well, more
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  Speaker 2: insane from here because investigators compared some daycare attendance claims
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  Speaker 2: against border crossing records. One defendant allegedly left the United
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  Speaker 2: States around January the 1st of 2024 and didn't return
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  Speaker 2: until around January the 30th.
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  Speaker 1: So that would be 30 days they're out of the country.
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  Speaker 2: Yet, according to the prosecutors, attendance records were still submitted
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  Speaker 2: claiming child care was being provided at the home during
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  Speaker 2: January when the person who was supposed to be watching
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  Speaker 2: the children was literally out of the country. Now, the
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  Speaker 2: government also says eight subsequent direct deposits totaled.
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  Speaker 1: Nearly $ 15, 000.
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  Speaker 2: Federal investigators say each of the 12 defendants received somewhere
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  Speaker 2: between approximately $ 1, 000 $ 538, 000 and $ 1. 2 million over varying periods. Now,
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  Speaker 2: several allegedly collected more than $ 1 million each. Altogether, prosecutors
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  Speaker 2: say more than $ 10 million intended to help low-income families
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  Speaker 2: was diverted through these alleged schemes. Now, the defendants are
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  Speaker 2: facing wire fraud charges, with some also charged with money laundering. These, again,
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  Speaker 2: are all the allegations. And of course, the defendants are
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  Speaker 2: going to say, oh, no, no, no, we're all innocent. Now,
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  Speaker 2: this wasn't the only thing that the Trump administration announced
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  Speaker 2: this past week. The Justice Department and Small Business Administration
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  Speaker 2: also announced the results of a nationwide enforcement surge that
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  Speaker 2: was targeting fraud involving pandemic-era government loans. Remember, there was
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  Speaker 2: a lot of people taking a lot of cash during
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  Speaker 2: the pandemic, and it was a free-for-all to get money. Well,
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  Speaker 2: now we know that between June 12th and September 1,
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  Speaker 2: prosecutors say enforcement actions involved more than 160 criminal defendants
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  Speaker 2: and more than $ 245 million. in intended taxpayer losses. Roughly
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  Speaker 2: 80 defendants were newly charged. Others are already pleading guilty.
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  Speaker 2: And there is even some that have already been sentenced. Now,
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  Speaker 2: these schemes sound exactly like what we also saw recently
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  Speaker 2: in Minnesota.
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  Speaker 1: They're familiar.
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  Speaker 2: Fake businesses, bogus payroll numbers, false revenue information, and then,
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  Speaker 2: of course, identity theft used to obtain taxpayer-backed loans. Now,
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  Speaker 2: the Small Business Association says approximately 870,000 borrowers suspected of
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  Speaker 2: fraud involving pandemic-era programs are being suspended from eligibility for
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  Speaker 2: future federal SBA loans. Officials say that these pandemic-level loan
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  Speaker 2: fraud was massive. And they say that the suspensions now
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  Speaker 2: are associated with an estimated 3%. $ 39 billion in suspected fraud.
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  Speaker 1: Yeah, that would be your tax dollars that disappeared.
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  Speaker 2: Now, the SBA says that when combined with previous actions,
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  Speaker 2: borrowers connected to approximately $ 49 billion in fraud and have
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  Speaker 2: now been suspended across all 50 states. And you just
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  Speaker 2: got to think about those numbers I just gave you.
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  Speaker 2: We're no longer talking about somebody lying on a form
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  Speaker 2: to steal a few thousand dollars. We're now talking about
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  Speaker 2: fraud investigations reaching into the tens of billions of dollars.
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  Speaker 2: And the DOJ, by the way, isn't limiting this to
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  Speaker 2: the pandemic programs. They're also saying that health care is
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  Speaker 2: another enormous target. Now, the Justice Department also has announced
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  Speaker 2: a health care fraud crackdown involving 450 defendants, and they
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  Speaker 2: stole allegedly more than $ 6. 5 billion. And just this last month,
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  Speaker 2: prosecutors in Massachusetts announced another charge, connected to what the
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  Speaker 2: DOJ called Operation Gold Rush. That was an enormous health
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  Speaker 2: care fraud prosecution that the DOJ says targeted Medicare and
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  Speaker 2: other insurers. Now, a foreign national, this is just one guy,
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  Speaker 2: by the way, was indicted on a money laundering conspiracy
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  Speaker 2: charge connected to a one point three billion health care
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  Speaker 2: fraud scheme. Prosecutors described the broader organization behind Operation Gold
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  Speaker 2: Rush as a foreign based.
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  Speaker 1: Let me say it again.
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  Speaker 2: A foreign based operation from Russia and elsewhere. So one
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  Speaker 2: point three billion of your dollars disappeared to Russia and
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  Speaker 2: other countries. Now, again, this is another example of what
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  Speaker 2: Donald Trump said he was going to do. And the
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  Speaker 2: government's made it clear that fraud is not victimless. And
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  Speaker 2: a great example of this goes back to our first story.
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  Speaker 2: When somebody allegedly invents daycare attendance and then takes child
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  Speaker 2: care subsidies, this isn't just government money, it's your money.
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  Speaker 2: And it's taken away from children that actually need it.
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  Speaker 2: And when somebody is creating a fake company and they
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  Speaker 2: take a fraudulent pandemic loan in the billions and billions.
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  Speaker 1: Of dollars, again, that's your money.
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  Speaker 2: And when somebody bills Medicare, as the government just exposed again,
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  Speaker 2: for services that were never provided. Well, that money is
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  Speaker 2: coming out of the program funded by American taxpayers. And
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  Speaker 2: by the way, there's a lot of American seniors that
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  Speaker 2: rely on those programs. And that is why Donald Trump
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  Speaker 2: has said every dollar stolen makes legitimate programs more expensive
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  Speaker 2: and harder for the taxpayers to sustain them. And that
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  Speaker 2: is exactly why they highlight the San Diego daycare case
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  Speaker 2: and why it's so revealing. Because the federal investigators say
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  Speaker 2: they didn't simply look at paperwork and shrugged. They compared
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  Speaker 2: the paperwork with surveillance. They checked travel and border records.
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  Speaker 2: They followed bank deposits. They compared what providers told the
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  Speaker 2: government with the investigators and what they actually saw happening
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  Speaker 2: at those addresses. And those alleged discrepancies, they led to
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  Speaker 2: those 12 arrests. And the big takeaway is that the
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  Speaker 2: Trump administration has made this a formal government-wide priority. The
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  Speaker 2: Justice Department established its National Fraud Enforcement Division in April.
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  Speaker 2: The DOJ says it works and it supports President Trump's
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  Speaker 2: task force to eliminate fraud. And that's chaired by the
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  Speaker 2: vice president, J.D.
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  Speaker 1: Vance.
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  Speaker 2: Now, the message that the Trump administration officials are trying
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  Speaker 2: to send is that programs that may previously have been
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  Speaker 2: easy targets for fraud are now going to face much,
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  Speaker 2: much more, as they described it, aggressive scrutiny. And there's
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  Speaker 2: also a second part of this story and why it
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  Speaker 2: matters is, well, this reason. Finding fraud is one thing.
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  Speaker 2: Getting the money back is another. The SBA says it
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  Speaker 2: has referred more than $ 22 billion associated with suspected fraudulent
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  Speaker 2: or delinquent pandemic loans to the Treasury Department for collection.
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  Speaker 2: And that is an important moment for all of us
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  Speaker 2: because this is exactly what we should be demanding, that
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  Speaker 2: every tax tower that was stolen be recovered. Now, the
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  Speaker 2: real test of this crackdown will be prosecutions and then
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  Speaker 2: convictions and where the evidence proves guilt. Well, the taxpayers,
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  Speaker 2: we should be made whole. We probably will never be
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  Speaker 2: made whole for what they stole, but at least it's
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  Speaker 2: sending a staggering message that this government's actually looking for
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  Speaker 2: daycare schemes, looking for Medicare schemes, looking for all of
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  Speaker 2: the different schemes. When you've got more than 160 defendants
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  Speaker 2: caught up in this recent pandemic loan enforcement surge, well,
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  Speaker 2: that's $ 245 million in intended losses. You've got hundreds of
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  Speaker 2: corrupt individuals that have now been charged worth billions in
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  Speaker 2: just the home health care fraud schemes and tens of
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  Speaker 2: billions of dollars associated with suspected pandemic lending fraud. All
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  Speaker 2: that together, now you understand why our deficit is such
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  Speaker 2: a problem. And that $ 10 million in Southern California in
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  Speaker 2: the daycare case, well, it may be small compared to
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  Speaker 2: some of the other cases. But when you can look
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  Speaker 2: at taxpayers and say, we stopped $ 10 million in fraud,
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  Speaker 2: that's a good day for everyone. So yet again, the
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  Speaker 2: Trump administration throwing down on fraud on multiple levels at
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  Speaker 2: multiple states and multiple categories.
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  Speaker 1: And it's pretty clear they're just getting started.
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  Speaker 3: Thank you for listening to the 47 Morning Update with
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  Speaker 3: Ben Ferguson. Please make sure you hit subscribe wherever you're
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