I Exposed California's Billion Dollar Fraud Crisis

Investigative journalist Nick Shirley has released what he describes as a sweeping exposé into what he alleges is a massive fraud crisis plaguing California’s government-funded healthcare and childcare programs. In the video, Shirley travels across Los Angeles and San Diego to document what he claims are widespread abuses of taxpayer dollars, confronting operators of allegedly fraudulent daycare facilities, hospice centers, and home healthcare companies on camera.

Shirley opens by framing the scale of the alleged problem, stating that ‘California may have the largest amount of fraud in the country.’ According to Shirley, California’s version of Medicaid — known as Medi-Cal — has reportedly more than doubled in spending since 2022, growing from $108 billion to a proposed $222 billion in 2026, while the state’s population has not grown at a comparable rate. Shirley further reports that there has been a ’thousand percent increase in hospice care in the Los Angeles County,’ and that ‘one out of every $10 of home health care in America is spent in Los Angeles.’

Shirley’s first stop takes him to what he identifies as the Medina Learning Center, a daycare facility located inside a shopping plaza he describes as having boarded-up buildings, graffiti, a large dumpster filled with garbage, and a homeless individual sleeping directly adjacent to the daycare entrance. According to Shirley, state records indicate the facility has 39 children enrolled, yet during his visit only approximately five children were observed. Shirley notes the facility lists the UMI Learning Center as its backup, stating that the UMI Learning Center ‘was convicted in federal court in 2024 of having 150 ghost kids.’

Shirley then visits what he identifies as Hayden Sarah Family Childcare, located in a residential neighborhood in San Diego. He reports that according to state records, when inspectors arrived at the facility there were 14 children enrolled but zero present, and that the facility was cited for missing children’s records and not having a facility roster. During the visit, a woman at the location refuses to answer Shirley’s questions about the whereabouts of the enrolled children. Shirley also visits what he identifies as Haboo Family Child Care, a home-based daycare, reporting that across four separate state inspector visits, zero children were found present despite enrollment figures ranging up to seven children. A further visit to what Shirley identifies as Jamba Shukri Family Child Care — located inside an apartment building — allegedly reveals two children left completely unsupervised with no adult present. Shirley states the government program allegedly funding these facilities is called CalWORKs, and notes that ‘California allocates $6 billion to child care and daycare facilities’ across over 39,000 facilities statewide. He cites an error rate of over 1.6% found by the California Department of Social Services in their own audits, and estimates ’there’s upwards of a hundred million dollars in fraud lost each and every single year’ in the childcare sector alone.

The investigation then shifts to Van Nuys, where Shirley documents what he describes as an alarming concentration of hospice and home healthcare centers that he alleges are shell companies billing Medicare and Medi-Cal for services never rendered. Shirley visits a complex he describes as containing approximately 15 or more hospice centers, identifying specific businesses including Gardens of Angels Hospice, which he reports billed $4.8 million per beneficiary; Blossom Hospice, which he reports received $3.4 million with $6,000 per beneficiary; Miracle Healing Hospice, which he reports charged $1.3 million in 2023 at $32,935 per beneficiary for 38 beneficiaries — yet whose building Shirley describes as completely empty with no furniture inside. All Day Hospice, according to Shirley, billed $3.1 million over 19 months starting in April 2023, with $6,000 per beneficiary, 24 claims per patient, and only two service codes. Shirley also references Hospice of Caring Hearts, which he reports billed $2.5 million.

Throughout his visits to the Van Nuys hospice complex, Shirley repeatedly documents luxury vehicles in the parking lots, noting the presence of multiple Teslas, BMWs, Mercedes, Audis, and Lexus vehicles. He states, ‘hospice must be very lucrative because a lot of these businesses, these doors right here have nothing on them.’ Shirley also notes that seven of the entities operating in the area allegedly have zero CMS data, describing them as ‘possibly shell registrations, shell companies,’ and reports that these operations are ‘rumored’ to be connected to Armenian-Russian criminal organizations. Shirley confronts one business operator identified as John Boyagen of KMD, who pushes back on Shirley’s questions but acknowledges widespread fraud exists in the industry. The video concludes with Shirley arriving at Healthy Life Adult Daycare, which he states has billed $19.8 million over the past few years. Throughout the investigation, Shirley repeatedly asks operators, regulators, and bystanders to explain the need for a ’thousand percent increase in hospice care’ in Los Angeles, receiving no satisfactory answers. Shirley asserts that the total fraud in California ‘could be in the hundreds of billions of dollars,’ framing the investigation as a matter of urgent concern for American taxpayers.

In Nick Shirley’s Words

“California may have the largest amount of fraud in the country.”

— Nick Shirley

“One out of every $10 of home health care in America is spent in Los Angeles.”

— Nick Shirley

“So maybe if you want to get rich here inside the United States, come to LA, open up a hospice because there’s a thousand% increase in hospices opening up here inside of California and you can go ahead and become a millionaire.”

— Nick Shirley

“It’s not some random thing that’s happening here inside of California and Los Angeles in this Vanise area. Quite literally, we’ve been to two locations so far, and they’re just popping up to these home healthcare, these hospice centers, and they’re not even doing anything to try and hide what they’re doing.”

— Nick Shirley

“To be very conservative, it is safe to say there’s upwards of a hundred million dollars in fraud lost each and every single year.”

— Nick Shirley