Bill Essayli's Battle Against California's $76 Billion Scandal
- Rex Ballard
- Dec 27, 2025
- 5 min read
Introduction
In the heart of California's escalating fiscal and social crises, Acting U.S. Attorney Bill Essayli stands as a formidable force, determined to unravel what he calls a "criminal enterprise" of fraud, waste, and corruption under Governor Gavin Newsom's administration. Appointed in April 2025 by Attorney General Pam Bondi, Essayli—a Republican, former state Assemblymember, and seasoned federal prosecutor—has launched aggressive investigations into the alleged mismanagement of up to $76.5 billion in taxpayer funds across programs like homelessness relief, COVID-19 aid, and the high-speed rail project. His quest, fueled by a nonpartisan state auditor's damning report, aims not only to prosecute wrongdoers but to restore accountability in a state plagued by rising deficits and unchecked spending.
Bill Essayli: A Prosecutor on a Mission
Essayli's path to this role is marked by legal acumen and political grit. A Trump ally from Riverside County, he served in the California Assembly from 2022 to 2024, advocating for tougher immigration and crime policies. His prior stint as a federal prosecutor equipped him to tackle complex cases involving organized crime and white-collar fraud. Upon appointment, Essayli vowed to pursue violators "no matter how powerful," criticizing Newsom's oversight as woefully inadequate. His efforts come amid a state auditor's report exposing $76.5 billion in potential losses, turning California into what critics dub the "fraud capital of America."
The Homelessness Fraud Task Force: Uncovering Billions in Misuse
Central to Essayli's quest is the Homelessness Fraud and Corruption Task Force, launched shortly after his April 2025 swearing-in. This unit scrutinizes the $24 billion poured into homelessness programs since 2018, where funds have "disappeared" without reducing encampments or providing sustainable housing. Partnering with the FBI and HUD, the task force has exposed schemes in initiatives like Project Homekey.
Essayli has likened the scale to Minnesota's scandals, emphasizing moral outrage over funds diverted from the vulnerable. Recent developments, as of December 2025, underscore the urgency: A March 2025 independent audit revealed that Los Angeles cannot track billions in homelessness spending, with $2.3 billion specifically unaccounted for through the Los Angeles Homeless Services Authority from fiscal years 2021-2024. A federal judge in March 2025 described LA's homeless spending as a "train wreck" and threatened to seize control, while city officials admitted failures in tracking amid a $1.28 billion allocation for 2023-24, including $513 million unspent. By April 2025, the task force highlighted $2 billion in missing funds in LA County, prompting broader probes into federal, state, and local programs.
Table 1: Breakdown of Alleged $76.5 Billion Fraud by Category
To illustrate the extent, here's a detailed tabular breakdown based on state audits and federal probes:
Category | Estimated Loss ($ Billion) | Key Issues | Status as of Dec 2025 |
Homelessness Programs | 24 | Unaccounted funds; ineffective spending; developer embezzlement (e.g., $100M+ in Shangri-La case) | Active federal indictments; $2.3B to LA County missing |
COVID-19/EDD Unemployment | 32-55 | Fraudulent claims via identity theft; organized crime involvement | $5.9B recovered; multiple employee fraud charges |
High-Speed Rail Project | 18 | Overruns to $135B total; no completed track after 30+ years | Federal funding halted; ongoing waste probes |
CalFresh/Food Stamps | 2.5 | Improper payments due to mismanagement | High-risk audit listing; reforms pending |
Other (Infrastructure, etc.) | ~2-3 | Deteriorating dams, unupgraded 911 systems, EBT thefts | Scattered investigations; $180M education fraud noted |
Total | 76.5 | Systemic oversight failures under Newsom | Expanding task force probes |
An abandoned high-speed rail site, symbolizing the project's massive waste and delays.
Major Indictments: From Developers to Insiders
Essayli's investigations have produced swift results. In October 2025, charges were filed against developers Cody Holmes and Steven Taylor for misappropriating millions. Holmes allegedly diverted $2.2 million from a $26 million project to personal luxuries, while Taylor inflated costs in a property flip. By December, probes into $2.3 billion in unaccounted LA County funds intensified, with Essayli calling it "the tip of the iceberg."
Table 2: Key Indictments and Recoveries Under Essayli
Case/Individual | Charges/Details | Amount Involved | Outcome/Status (Dec 2025) |
Cody Holmes (Shangri-La) | Fraud, embezzlement; fake docs for unfinished project | $26M+ | Indicted; $2.2M personal diversion |
Steven Taylor | Cost inflation in property deal | $16M+ | Charged; ongoing trial |
Newsom's Ex-Chief of Staff | Fraud and conspiracy in fund misuse | Undisclosed | Federal counts filed |
LA County Employees (EDD) | 24 charged for stealing UI benefits | $0.7M | Prosecutions underway |
Overall Recoveries | EDD fraud reclamation | $5.9B | Partial; more expected |
Additional cases tie directly to Newsom's circle, expanding to healthcare for undocumented immigrants and redistricting abuses.
Exposing Gavin Newsom's Top 10 Failures
An illustration capturing the essence of the Gavin Newsom fraud scandal allegations.
Political Ramifications and Roadblocks
Essayli's work has amplified pressure on Newsom, whose "national model" for homelessness is now synonymous with scandal. Critics accuse the administration of funneling funds into partisan networks, potentially derailing Newsom's national ambitions. Yet, Essayli faces hurdles: Democratic senators delay his confirmation, citing partisanship and his knowledge of past election issues.
Conclusion
To put the scale of the fraud discussed in this article. $76.5 billion is more money than the federal budget of more that 130 countries around the world. Bill Essayli's unwavering quest is exposing the depths of California's fraud, one indictment at a time. With tables quantifying the waste and visuals underscoring the human cost, his efforts promise reform—but the battle against entrenched interests rages on into 2026. The Democrats in Congress continue to fight his permanent appointment.
Sources:
Official Reports and Government Sources
California State Auditor: Governor Newsom and 8 Agencies Named High-Risk (December 15, 2025) - https://californiaglobe.com/articles/california-state-auditor-governor-newsom-and-8-agencies-named-high-risk/
Report 2023-601 State High Risk Audit Program, Audit Plan - https://information.auditor.ca.gov/reports/2023-601/plan/index.html
United States Attorney Bill Essayli Announces Criminal Task Force to Investigate Fraud and Corruption Involving Homelessness Funds (April 8, 2025) - https://www.irs.gov/compliance/criminal-investigation/united-states-attorney-bill-essayli-announces-criminal-task-force-to-investigate-fraud-and-corruption-involving-homelessness-funds
Beverly Hills Man Arrested, Brentwood Man Charged in Separate Criminal Cases Linked to Fraud in Public Homelessness Funds (October 16, 2025) - https://www.justice.gov/usao-cdca/pr/beverly-hills-man-arrested-brentwood-man-charged-separate-criminal-cases-linked-fraud
News Articles and Media Reports
Failing Grades for Newsom from His Own State Auditor - New York Post (December 22, 2025) - https://nypost.com/2025/12/22/opinion/newsoms-california-and-the-failing-eight/
DOJ Accuses Real Estate Developers of $50M Funding Fraud - Fox Business (October 17, 2025) - https://www.foxbusiness.com/politics/california-homeless-crisis-doj-accuses-real-estate-developers-50m-funding-fraud (also cited in )
Newsom's Former Chief of Staff Accused of Corruption, Bank Fraud - CalMatters (November 12, 2025) - https://calmatters.org/politics/2025/11/newsom-chief-of-staff-indicted/
A Bombshell Federal Fraud Case Exploded Inside Newsom's Powerful Orbit - LA Times (November 13, 2025) - https://www.latimes.com/california/story/2025-11-13/federal-fraud-case-newsom-political-orbit
DOJ Accuses Real Estate Executives of Fraud in Homeless Funding - LA Times (October 16, 2025) - https://www.latimes.com/california/story/2025-10-16/doj-accuses-people-of-fraud-in-homeless-funding
2 Men Charged with Fraud in Misuse of Homelessness Funds - NBC Los Angeles (October 16, 2025) - https://www.nbclosangeles.com/news/local/justice-department-bill-essayli-homeless-fraud/3792422/
Federal Government to Investigate Fraud in Local Homelessness Funding - Santa Monica Daily Press (April 13, 2025) - https://www.smdp.com/federal-government-to-investigate-fraude-in-local-homelessness-funding/
DOJ Task Force to Probe So Cal Homelessness Spending - California City News (April 2025) - https://w.californiacitynews.org/2025/04/doj-task-force-probe-so-cal-homelessness-spending.html
New Federal Task Force to Probe Homeless Funding - Surf Santa Monica (April 11, 2025) - https://www.surfsantamonica.com/ssm_site/the_lookout/news/News-2025/April-2025/04_11_2025_New_Federal_Task_Force_to_Probe_Homeless_Funding.html
Homelessness Spending - LAist - https://laist.com/brief/news/housing-homelessness/federal-task-force-to-investigate-potential-fraud-and-misuse-of-homelessness-funding
Video and Social Media Content
NEW: $78 BILLION California FRAUD Scandal EXPLODES - YouTube (December 24, 2025) - https://www.youtube.com/watch?v=M-Lz2z_Za7g
Homelessness Fraud and Corruption Task Force Arrest - YouTube (October 16, 2025) - https://www.youtube.com/watch?v=Ns4gFJWNZcw
BREAKING: Now over $76.5 BILLION in FRAUDULENT SPENDING - Facebook (December 24, 2025) - https://www.facebook.com/DavidJHarrisJr/posts/breaking-now-over-765-billion-in-fraudulent-spending-has-been-exposed-in-califor/1439106374454566/
BREAKING - A 92-page report by the California State Auditor - Facebook (December 24, 2025) - https://www.facebook.com/breakingbattlegrounds/videos/breaking-a-92-page-report-by-the-california-state-auditor-has-found-that-over-70/912571834438635/
New Audits Allege up to $76.5 Billion in Fraud and Waste - Instagram (December 24, 2025) - https://www.instagram.com/p/DSpw8VuFOL-/