California Says It Cut EBT Theft by 83%. Federal Prosecutors, a State Fraud Investigators’ Group, and a $280 Billion Estimate Say Newsom’s Not Telling the Whole Story.
On January 16, 2026, Gov. Gavin Newsom (D-CA)’s office announced an 83 percent reduction in EBT theft, crediting new chip-enabled benefit cards for choking off the ATM-skimming schemes that had drained hundreds of millions of dollars from CalFresh and CalWORKs recipients. It was framed as a turnaround story: theft down from roughly $20 million a month two years earlier to about $4 million a month by fall 2025.
Federal prosecutors were not done. In the weeks before and after that announcement, U.S. Attorney’s Offices in the Southern and Central Districts of California charged dozens of defendants in separate EBT-theft rings, the Secret Service credited a single Southern California sweep with saving $8.4 million, and California’s own Department of Social Services data showed $126.8 million stolen from EBT cards in 2024 alone — a single year inside the very reduction period Newsom’s office is touting.
And EBT skimming is the smallest number in the room. A City Journal investigation published in April 2026 put total fraud across California’s broader safety-net programs — unemployment insurance, Medi-Cal, in-home care, and homelessness spending — at $180 billion to $280 billion over the Newsom era. His office called that estimate “utter bulls--- from top to bottom.” The state’s own welfare-fraud investigators say the 83 percent figure is undercounted, too.
- $126,800,000 — stolen from California EBT cards in 2024 alone, per the state's own Department of Social Services data — one year inside the period Gov. Newsom's office cites as an 83% improvement · Source: Gov.ca.gov, CalMatters
- $310,000,000+ — stolen from California EBT beneficiaries between June 2022 and January 2026, mostly through ATM skimming · Source: Gov.ca.gov, CalMatters
- $180,000,000,000–$280,000,000,000 — estimated total fraud across California's safety-net programs during the Newsom era, per a City Journal investigation Newsom's office disputes as inaccurate · Source: City Journal, Fox News
- 50+ — defendants charged by the U.S. Attorney's Office for the Southern District of California alone in a single EBT-theft prosecution targeting low-income families · Source: DOJ USAO-SDCA
- $400,000,000+ — in fraud the U.S. Secret Service says its card-skimming operations prevented nationally in 2025, including Southern California's Operation May Magnitude · Source: U.S. Secret Service
California’s CalFresh program (the state’s name for the federal SNAP benefit) and CalWORKs cash-assistance program both fall under Gov. Gavin Newsom (D-CA)’s executive branch, administered through the state Department of Social Services. Both programs distribute benefits on Electronic Benefit Transfer (EBT) cards — the same plastic cards recipients use at grocery stores and ATMs, and the same cards organized theft crews spent years targeting.
For years, organized skimming crews cloned the magnetic stripes on California’s EBT cards at compromised ATMs and point-of-sale terminals, then drained recipients’ accounts overnight, often before a beneficiary ever noticed. By the state’s own account, theft peaked at roughly $20 million a month before California began rolling out chip-enabled EBT cards — the same chip technology that has protected ordinary debit and credit cards for close to a decade.
The January 16, 2026 announcement from the governor’s office credited that chip rollout with cutting monthly theft to roughly $4 million by fall 2025 — the 83 percent figure. CalMatters covered the announcement the same month, noting the technology fix came only after years of pressure from advocates and lawmakers over a theft wave that had already cost beneficiaries hundreds of millions of dollars.
But the chip rollout didn’t end the enforcement need — it ran alongside it, not instead of it. The U.S. Attorney’s Office for the Southern District of California announced that more than 50 people have been charged in a single case tied to thefts of millions of dollars from California benefits for low-income families. A separate case from the same office charged seven more defendants on similar allegations. Neither case has been fully adjudicated as of this writing; every defendant named in them is charged, not convicted, and is presumed innocent unless and until a court finds otherwise.
Confirmed by California’s own data: $126.8 million stolen from EBT cards in 2024; monthly theft dropping from roughly $20 million to roughly $4 million between 2023 and fall 2025.
Disputed: whether the 83% figure fairly represents the scale of the problem, given that federal prosecutors were still charging dozens of new defendants in EBT-theft rings well after the chip rollout, and given that the California Welfare Fraud Investigators Association says the state’s own theft numbers are undercounted.
While Sacramento touted a technology fix, federal law enforcement kept building cases. The U.S. Attorney’s Office for the Central District of California announced two related law-enforcement operations targeting fraudulent withdrawal of benefits: one resulting in 15 arrests, a second in 5 arrests. In March 2026, Townhall reported that federal prosecutors had charged 52 people in a Romanian-linked EBT theft ring accused of targeting roughly $4 million from some of California’s most vulnerable benefit recipients. All of these defendants are alleged to have committed these crimes and remain presumed innocent unless convicted.
The U.S. Secret Service ran its own targeted sweep in Southern California in May 2025, dubbed Operation May Magnitude: 10 arrests, 20 physical skimming devices pulled off ATMs and point-of-sale terminals, and an estimated $8.4 million in benefits protected. ABC7 covered the raid as it unfolded. Nationally, the Secret Service says its card-skimming operations — EBT and otherwise — prevented more than $400 million in fraud in 2025 alone.
Not every California EBT fraud case is a pending federal charge. California Attorney General Rob Bonta (D-CA)’s office announced the sentencing of a defendant in a two-year EBT phishing fraud scheme — a resolved, adjudicated conviction, not an allegation. It stands as one concrete example of the enforcement pipeline actually closing a case, even as hundreds of millions of dollars in broader theft remain the subject of ongoing federal and state investigation.
“This is not a systemic victory. It is a delayed and partial mitigation of a crisis long allowed to grow unchecked.”
Gregory Mahony, President, California Welfare Fraud Investigators Association · via CalMatters, January 2026
The sharpest challenge to Newsom’s framing came from City Journal on April 1, 2026, in a joint investigation by Christopher Rufo, Devon Thorpe, Sean Schrupp, and Emily Strack. Their estimate: $180 billion to $280 billion in total fraud, waste, and improper payments across California’s safety-net programs during Gov. Newsom (D-CA)’s tenure. The breakdown they cite includes roughly $20 billion in confirmed fraud and $55 billion in improper payments out of the state’s pandemic-era unemployment insurance system (EDD); an estimated 15 percent fraud rate applied to Medi-Cal spending since 2019, totaling roughly $146 billion; a 170 percent budget increase in the In-Home Supportive Services program since 2019; and $24 billion in homelessness spending over five years that the investigation says California cannot fully account for.
City Journal’s claim: $180 billion to $280 billion in total fraud and improper payments across EDD unemployment, Medi-Cal, IHSS, and homelessness spending combined, compiled from state audits, federal oversight reports, and program budget data.
Newsom’s office, per Fox News: called the estimate “utter bulls--- from top to bottom.”
What’s not in dispute: the EDD’s own confirmed pandemic-era fraud figure (~$20 billion) and its improper-payment estimate (~$55 billion) both come from state and federal audits, not from City Journal’s own modeling.
“Utter bulls--- from top to bottom.”
Gov. Gavin Newsom's (D-CA) office, responding to City Journal's $180-280B estimate · via Fox News
Narrower estimates track closer to the EBT-specific problem. California Globe put CalFresh (SNAP) fraud at $20 billion to $25 billion over five years. The California Welfare Fraud Investigators Association, whose members are the front-line state and county staff who actually work these cases, disputes Newsom’s 83 percent figure as an undercount that doesn’t reflect the scale of what its own investigators see in the field.
SNAP FRAUD CRACKDOWN: From Hour 1, Day 1, USDA has been laser-focused on eliminating fraud in the SNAP program — and we're not stopping until every taxpayer dollar goes to the families who actually need it.
California’s dispute over its own numbers is playing out against a broader federal push. USDA Secretary Brooke Rollins (Trump-administration appointee) has launched a SNAP Program Integrity Data Team, extrapolating from 29 cooperating states to an estimated $3 billion a year in SNAP fraud nationally — more than $10 billion when broader improper-payment estimates are included. Breitbart reported that Rollins has said Democratic-led states have resisted sharing fraud data with USDA, complicating the federal effort to get a national handle on the scope of the problem.
Nationally, the Government Accountability Office has found that SNAP trafficking — the sale of benefits for cash, the core of most skimming schemes — runs roughly 1 to 2 percent of total benefits, or $1 billion to $1.3 billion a year, while broader improper payments (errors and fraud combined) run closer to 10 to 11 percent, more than $10 billion a year. California’s scale, given its size as the nation’s largest SNAP caseload, sits at the center of that national number by simple arithmetic — which is part of why federal scrutiny of the state has intensified rather than eased since the chip-card rollout.
Congressional Republicans representing California districts have pressed the state directly. Rep. Young Kim (R-CA-40) sent Gov. Newsom a formal letter on November 6, 2025, demanding a full CalFresh fraud investigation and asking his administration to explain how it would ensure benefits reach the Californians the program is meant to serve rather than organized theft rings.
All the alarms have been sounding on fraud in CA, yet Newsom keeps looking the other way. While hardworking Californians struggle, criminal fraudsters are cashing in MILLIONS. Someone has to hold Sacramento accountable — & I won't stop fighting until we get real answers.
“I was begging them not to let the money go out like that, because it was going to be the biggest fraud in the history of our country.”
Haywood Talcove, CEO, LexisNexis Risk Solutions · via City Journal
The gap between the state’s framing and outside scrutiny is not limited to EBT cards. Bill Essayli, First Assistant U.S. Attorney for the Central District of California and a Trump-administration appointee leading that office, made a related accountability point about homelessness spending that captures the broader climate California’s safety-net programs now operate in: “California has spent $24 billion in the last five years on homelessness, and no one can account for where that money has really gone,” he told City Journal. That is a separate line item from CalFresh or CalWORKs, but it reflects the same pattern federal investigators keep describing across multiple California programs: large sums, thin accounting, and enforcement that arrives well after the money is gone.
That same U.S. Attorney’s office is one of the two federal districts bringing the EBT-theft cases detailed above, which means the same federal prosecutors raising accountability questions about homelessness spending are, in parallel, the ones charging defendants in benefits-theft rings and pressing California for better fraud data — two fronts of the same broader oversight push into how the state’s safety-net dollars are tracked and protected.
Gov. Gavin Newsom (D-CA), in office since January 2019, oversees CalFresh and CalWORKs through the state Department of Social Services.
Attorney General Rob Bonta (D-CA) prosecutes state-level benefits fraud, including the resolved EBT phishing sentencing cited above.
Federal EBT-theft prosecutions run through the U.S. Attorney’s Offices for the Southern and Central Districts of California, independent of the governor’s office, under the U.S. Department of Justice.
None of the federal charges detailed in this story amount to a conviction, and every named defendant in a pending case is presumed innocent unless and until a court finds otherwise. The one adjudicated EBT-fraud case in this story — Attorney General Rob Bonta (D-CA)’s two-year phishing scheme sentencing — stands as proof the enforcement pipeline can close a case, not as proof the broader problem is contained.
What is not in dispute is the shape of the record: a governor’s office announcing an 83 percent improvement while, in the same window, federal prosecutors in two separate California districts, the U.S. Secret Service, a state-level welfare fraud investigators’ association, a congresswoman representing a California district, and a national magazine investigation all describe a problem that is either still growing or was never fully measured to begin with. Chip cards appear to have made ATM skimming harder. They have not made the underlying dispute over how many billions California’s safety-net programs have actually lost go away.
Confirmed by the state’s own data: $126.8 million stolen from California EBT cards in 2024; $310 million-plus stolen June 2022–January 2026; theft trending down from ~$20M/month to ~$4M/month since the chip-card rollout.
Confirmed by federal law enforcement: dozens of defendants charged across at least four separate DOJ actions in the Southern and Central Districts of California, plus a Secret Service sweep that recovered $8.4 million and one Attorney General sentencing that has already been adjudicated.
Disputed, not fabricated: the $180–$280 billion total-fraud estimate is City Journal’s modeled figure, explicitly rejected by Newsom’s office — readers should treat it as a contested outside estimate, not an official audit finding.
