Federal prosecutor calls California a ‘fraudster’s paradise’ amid busts

A top federal prosecutor in Southern California told Fox News that the state has transformed into a “fraudster’s paradise,” accusing state leaders of allowing millions of dollars in fraud.

Speaking on “Saturday in America,” First Assistant U.S. Attorney for the Central District of California Bill Essayli highlighted a string of federal busts, including a $45 million Medicare Botox scam. He added that federal investigators “will not hesitate” to prosecute any officials found to be enabling the fraud.

“California is truly the fraudster’s paradise,” Essayli said Saturday, later adding, “It’s very hard to tell sometimes if it truly is just massive incompetence or corruption, and that’s a very fine line sometimes.”

“If we ever develop evidence that there are people inside the government who are benefiting from the fraud or who are enabling the fraud, we will not hesitate to charge them,” he said.

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Essayli said new leadership at the Justice Department is “laser-focused” on going after those committing fraud and saving the American people money. He discussed cases in his district, including what the FBI in Los Angeles called the “largest Botox fraud scheme in the United States.”

Violetta Mailyan, a doctor in California, was convicted in a $45 million scheme to defraud Medicare by submitting claims for Botox injections that either were not given or were unnecessary.

“The Botox scheme was a conviction right here in Los Angeles, and we’re going after those assets. We’re [going to] get probably $20 million of her assets returned to the taxpayers after that conviction,” he said.

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Essayli argued that the way California hands out medical licenses is helping to fuel fraud, questioning whether it’s “incompetence or corruption” behind it and adding that state politicians “really don’t care” because it’s federal money being used.

“A lot of this is just like reckless, massive incompetence and negligence to hand out this many licenses without vetting or checking that these are legitimate medical providers,” he said. “You really are just handing the keys to the piggy bank over to these fraudsters.”

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The prosecutor also had a message for potential fraudsters, telling them to “be on alert.”

“You could be next,” Essayli said. “And you probably will be next because we’re not putting up with it here anymore.”

In March, President Donald Trump chose Vice President JD Vance to lead the Task Force to Eliminate Fraud. Since then, the White House says it has identified several major fraud rings involving hospice care and childcare facilities.

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In May, Vance, alongside Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz, announced the administration would defer $1.3 billion in federal Medicaid funding to California due to oversight concerns.

At the time, Vance told Fox News host Kayleigh McEnany the administration’s anti-fraud task force was looking into whether government officials enabled the alleged scams. He warned that anyone who covered up the abuse “ought to go to prison.”