1 in 3 LA Armenians using $30 billion In-Home supportive services program investigated by Dr. Oz

(The Center Square) – Armenian-speakers in Los Angeles County utilize California’s In-Home Supportive Services program at a rate roughly 700% higher than their proportion of the county’s population, an analysis by The Center Square found — renewing attention to potential fraud concerns in the community amid the ongoing public dispute between CMS Administrator Dr. Mehmet Oz and Gov. Gavin Newsom.

A top fraud expert said that The Center Square’s IHSS data analysis likely reveals organized fraud networks are operating in Los Angeles County’s Armenian-speaking community — with participants allegedly getting kickbacks and funneling large amounts of money out of the country through cash-based hawala networks.

While the U.S. Census estimates Armenians are only 2.1% of Los Angeles County’s population, Armenian-speakers are 14.7% of LA County’s 303,269 recipients of IHSS care, according to IHSS language data. No other group in Los Angeles County comes anywhere close in their utilization of IHSS with the next-highest utilization rate half that of Armenian-speakers.

Haywood Talcove, a nationally-recognized fraud expert and CEO of LexisNexis’s Risk Solutions for Government who has spent nearly two decades leading efforts to stop fraud and protect taxpayer resources, said the data TCS uncovered shows something wrong is happening in LA.

“It’s fraud. It’s in the community, and someone is teaching them how to do it,” Talcove said in an interview. “The money doesn’t stay in LA or California: a portion of it gets moved out the country through the hawala networks.”

California’s In-Home Supportive Services program was designed to get people assistance at home without having to move to an expensive facility, allowing qualifying residents to use taxpayer funds to pay in-home “providers” — mostly live-in relatives — for domestic and personal care services that include laundry, cooking, cleaning, and shopping. The state’s 799,379 IHSS providers are paid an average of more than $2,000 per month, or in excess of $24,000 per year.

Assuming Armenian-speakers are Armenians, Armenians get care from IHSS at a rate seven times higher than their share of LA County’s population, and almost a quarter of all Armenians in LA County are enrolled as recipients of IHSS care for elderly or disabled low-income residents. Only 42.6% of IHSS recipients in LA County reported speaking English.

Once accounting for the 16,783 Armenian-speaking IHSS providers in the county, nearly one-third of all Armenians in LA County seem to be receiving care or payment from the state’s $30 billion per year IHSS program that is roughly half-funded by federal taxpayers.

Talcove said fraud schemes often concentrate within particular communities because of shared language, family networks or cultural patterns that can be exploited.

“With fraud, there tends to be a relationship to transnational criminals and a certain ethnicity,” he said, emphasizing that the vast majority of people in any community are not involved.

According to Dr. Mehmet Oz, Trump’s administrator of the Center for Medicare and Medicaid Services, the federal government has uncovered billions of dollars in improper payments and fraud through California’s Medi-Cal system, noting IHSS expenditures have more than tripled in the past decade.

Oz, in a separate social media video, also claimed Russian-Armenian criminals are using businesses as fronts for benefits fraud. He shared that within one four-block area, there were 42 registered hospices (a separate program from IHSS, which he is also investigating).

“There’s roughly $3.5 billion of fraud taking place here in Los Angeles in hospice and homecare” said Oz in the video. “It’s run, quite a bit of it, by the Russian, Armenian mafia.”

Gov. Newsom responded by filing a civil rights complaint, saying Oz made “baseless and racist allegations against Armenian Americans in California.”

Newsom’s office did not respond to questions about the statistics by publication time.

Oz’s office did not provide a comment by the time of publication, though staff did say CMS’ subject matter experts were reviewing The Center Square’s information.

Talcove said Newsom’s statement regarding Oz is an all-too-common response among government officials presented with possible evidence of widespread fraud.

“That’s always the playbook: ‘You’re racist,’” Talcove said. “Not everyone is involved in fraud. But just like in Minnesota, when you do find a particular group that is running the same playbook over and over and over again, you have to put more controls in place.”

Talcove further explained how fraud becomes more common within a community, and how the money is ultimately moved out of the country.

“The way these organized criminal groups work is, they sign someone up. There’s someone up there that has taught them how to do the fraud, and they’re getting a kickback,” Talcove said. “And then that money has to get out of the country. So you use the hawala network.”

The hawala network is a long-running, decentralized, and global cash transfer network that allows for reliable, anonymous transfers of cash anywhere in the world. The operators of the hawala network, known as hawaladars, receive a cut of the cash flow for their services.

The hawala network has been implicated in either implicitly funding or facilitating the funding of terror and criminal operations.

Talcove says the IHSS data is likely revealing only one small portion of the likely fraud, which often involves the use of multiple government benefits programs, and thus cannot be stopped by focusing on a single program alone.

“They’re all getting EBT, they’re all getting TANF, they’re all getting cash assistance, because once you’re in one program, they’re in multiple programs, so the level of fraud is substantially larger,” Talcove said. “You’re not looking to bust individuals. What you’re looking to do is bust rings. And the rings are diverse business units. So they’ll take advantage of every program and every dollar.”

TCS contacted Los Angeles County’s Department of Public Social Services, which administers the program locally, but did not receive any response by the time of publication.

The latest state report on IHSS fraud and recovery says $8,033,669 in fraud was identified in fiscal year 2023-2024, when IHSS’s budget was $20.5 billion — implying an identified fraud rate of 0.04% as a percentage of the total program budget.

A Sacramento grand jury report from 2009 relayed estimates that fraud in IHSS may be as high as 25%, and that social worker fraud training at the time consisted of a brief exercise and four presentation slides, one of which said, “Don’t be a cop.”

IHSS documentation has since improved, moving from honor-system paper time sheets, to GPS-tracked safeguards, but it still includes honor-based electronic check-ins that could be completed by individuals who are not the provider.

IHSS fraud protocols, updated in 2013, include a large number of restrictions on anti-fraud activities.

Regarding random, unannounced home visits, the protocols state: “These visits only will be conducted as the result of a specific, articulable program integrity concern, never at random.”

According to Talcove, random, unannounced visits, combined with prosecution, are the best ways to limit future fraud in the program.

Such actions send “a distinct and clear message to everyone you are cracking down,” he said.