Why the Trump administration is waging war on fraud

MIRACLES DO happen. Although hospice care is meant for people with a terminal diagnosis, some keep living. But when nearly three-quarters of patients make it through six months of palliative care, either something preternatural is happening, or something fishy. In Glendale, southern California, prosecutors allege it was the latter. Amelou and Gladwin Gill, who run a hospice company, are accused of charging the government $5.2m for care that was unnecessary or never given. Their pre-dawn arrest this month was carried out by an FBI SWAT team (accompanied by media and Mehmet Oz, pictured, a television doctor turned government official). Mr Gill’s lawyer, Mark Sedlander, says he had requested a voluntary surrender with prosecutors. The arrest, he says, put “politics before justice”, part of a fraud blitz aimed at hospices and named by someone with a sense of humour: “Operation Never Say Die”.

Benefit scams, particularly those involving health care, have become a priority for the White House. At the State of the Union address, the president declared a “war on fraud”. J.D. Vance chairs an anti-scam task force. Arrests like that of the Gills are well-publicised; congressional committees are holding hearings. Fraud has become central to the administration’s messaging ahead of the midterm elections. The focus, Mr Trump has said, will be on “Blue states where CROOKED DEMOCRAT POLITICIANS… have had a ‘free for all’”. Republicans see fraud not only as a tool to punish Democrat-led states, but also an opportunity to counter a political weaknesses of their own.

Everyone, from the fiercest critics of health programmes to their strongest defenders, agrees that some level of fraud is inevitable. But the amount stolen is significant, if well short of being able to balance the budget, as Mr Trump promises. The Government Accountability Office (GAO), a nonpartisan congressional watchdog, estimates that the federal government loses somewhere between $233bn and $521bn a year to fraud, about 3 to 7% of all spending obligations (given the murky nature of illicit activity, more precise estimates are foolhardy). The scale of health care makes it particularly vulnerable. Medicare and Medicaid, the programmes for the elderly and the poor, respectively, made up a fifth of federal spending in 2024. They are also fragmented, says Robin Rudowitz of KFF, a health-research outfit. Medicare alone has more than 1.4m providers and 20 different payment systems. That makes oversight hard.

Most cons are not carried out by patients, who can only lower their own costs. The big scams come from health-care providers, who can bill the government for non-existent treatments. Services that are given outside of hospitals, with their eagle-eyed administrators, are obvious places to look. In someone’s home, often no one other than the provider and the patient knows how long a visit was, what treatment was provided or whether it even happened. Spending that goes directly on a patient, such as a new wheelchair or care provided through telemedicine, can be billed fraudulently. As can care billed by the hour, like many treatments for autism.

Minnesota has been the centre of the administration’s work against fraud, and not just in health care. There have been real problems in the state: since 2022, nearly 100 people have been charged and at least 60 convicted of various scams. Many were committed by Somali-Americans and brought to prominence by social-media activists. This created a pretext for immigration enforcement in the state and a focus on the race of fraudsters (Mr Trump called out “Somali pirates” in the State of the Union). The total lost is in the hundreds of millions, if not considerably more. One assessment by federal prosecutors suggests that since 2018, over half of the $18bn in public money spent on about a dozen specific services was likely stolen. In response, the Trump administration has attempted to withhold over $2bn a year in Medicaid funds for these services in the state. The move is currently paused, awaiting a hearing. Meanwhile, federal administrators have approved the state’s plan to crack down on fraud.

The Trump administration’s other remedies for scams vary from the straightforward to the mean-spirited. Mr Vance’s task force is charged with finding ways to withhold state funding, as well as flagging high-risk transactions and setting up anti-fraud requirements across federal agencies. It will “use every tool available to bring wrongdoers to justice”, says one administration official, “and ensure the scale of fraud this nation saw cannot ever happen again.” California, Florida, Maine and New York have received letters about fraud prevention, which administrators worry could be the first step to cutting funding.

Yet other moves by the administration run counter to an interest in minimising scams. In 2025 Mr Trump pardoned one prominent health-care fraudster, Robert Harshbarger junior, and commuted the sentence of another, Lawrence Duran. Such treatment is why the crackdown is “all bullshit”, says Paul Pelletier, a former chief of the Department of Justice’s fraud section. “You have a president who is pardoning the biggest health-care fraudsters out there…they are speaking from both sides of their mouth—there is no credibility.” Prosecutors have also been pulled from fraud cases to focus on other priorities, according to reporting from ProPublica, leading to over 100 health-care fraud cases closing. On entering office, Mr Trump fired more than a dozen inspectors general, who typically play a key role in such investigations. In the health department, a two-decade veteran was replaced by T. March Bell, previously best known for running a congressional investigation into whether Planned Parenthood was selling fetal tissue (spoiler: it was not).

The context for all this is the midterms. Democrats have an enduring lead on health-care programmes, which are popular, while Republicans are associated with spending cuts. The administration’s political strategy is now akin to a word-association game: when voters think of health care, Republicans hope they think of fraud, rather than the cuts. Beyond November, the focus on scams sets up a longer-term discussion about the health of such schemes. At a meeting of Mr Vance’s task force, Stephen Miller, a White House adviser, asked what fraud “does to public trust, social trust, people’s faith in the system”. In the case of some fraud investigations, that may be the point. ■