Republican Candidates Allege Up to $250 Billion in California Fraud, Including Education Scams

SACRAMENTO, CALIFORNIA  (VINnews) — Republican gubernatorial candidate Steve Hilton and state controller candidate Herb Morgan on Monday released a preliminary report claiming up to $250 billion in fraud, waste and abuse across California government programs, based on hundreds of whistleblower tips submitted to their online platform.

The “Califraudia” report highlights alleged systemic issues in multiple agencies, including K-12 education and higher education. It specifically points to “fake community college applications” used to scam student aid funds, alongside claims of pay-to-play schemes in public schools.

Hilton and Morgan launched the Califraud.com tip line about a month ago, collecting submissions from whistleblowers, citizens, contractors and service providers. They described the $250 billion estimate as evidence of “systematic looting” requiring urgent audits.

Education-related allegations include widespread abuse in K-12 systems and fraudulent enrollments at community colleges to divert financial aid. The report ties these to broader problems in programs like Medi-Cal, CalFresh and homelessness initiatives.

Democratic Gov. Gavin Newsom’s office dismissed the findings as “MAGA made-up numbers,” noting that the administration has blocked over $125 billion in fraud since taking office.

Independent reporting has documented ongoing financial aid fraud in California’s 116 community colleges, where scammers create fake student profiles to obtain federal Pell Grants and state aid. Colleges reported losing more than $10 million in federal funds and $3 million in state funds to such schemes in the past year, though officials describe this as a small fraction of total aid disbursed.

The candidates’ report draws parallels to other high-profile fraud cases, including pandemic-era unemployment insurance losses exceeding $55 billion admitted by the state.

Hilton, a former Fox News host, and Morgan called for formal investigations, framing the allegations as a matter of fiscal responsibility ahead of the 2026 elections.