Padlocked Buildings Billed Medicare — Operators Drive Luxury Vehicles

Independent investigator Nick Shirley’s explosive 40-minute exposé alleges California taxpayers have been bilked out of $170 million through “ghost” daycare centers and hospice facilities that exist only on paper while their operators drive luxury vehicles and live lavish lifestyles.

Story Snapshot

Shirley’s investigation uncovered empty buildings and padlocked facilities billing Medi-Cal, Medicare, and childcare subsidies for services never rendered
California’s Medi-Cal spending has exploded from $108 billion in 2022 to a proposed $222 billion in 2026, while LA County hospice spending surged 1,000 percent despite stable population
Governor Gavin Newsom dismissed the findings as “political cosplay,” refusing to address the evidence of systematic fraud
Federal authorities previously convicted UMI Learning Center for billing 150 “ghost kids” in similar scheme

Ghost Facilities Drain California Taxpayers

Shirley released his California investigation on March 17, 2026, documenting visits to registered daycare and hospice facilities across Los Angeles and San Diego. His team discovered empty strip mall locations, residential homes masquerading as care centers, and abandoned buildings continuing to receive government payments. The video amassed 4.3 million views within 24 hours as Americans witnessed firsthand how their tax dollars fund fraudulent operations. Shirley used publicly available data from the Centers for Medicare and Medicaid Services, National Provider Identifier database, and California Department of Social Services inspection logs to identify suspicious facilities.

Medi-Cal Explosion Fuels Fraud Epidemic

California’s Medi-Cal program has experienced unprecedented growth, with spending proposals doubling in just four years. This massive influx of government funding has created opportunities for organized fraud schemes. LA County alone now represents 10 percent of all U.S. home healthcare spending, with hospice expenditures increasing tenfold despite no corresponding population growth. The investigation revealed facilities where enrollment records showed 39 children registered but only five actually present. One daycare operator drove a $260,000 Maybach while billing taxpayer-funded programs for phantom services, epitomizing the “welfare maxing” strategy that exploits lax oversight.

Federal Convictions Validate Fraud Concerns

Shirley’s findings align with established patterns of fraud in California’s social services programs. UMI Learning Center received a federal conviction in 2024 for billing government programs for 150 nonexistent children. Dr. Mehmet Oz conducted a separate investigation alleging $3.5 billion in hospice fraud in Los Angeles. CBS News recently reported on criminals using dark web services to obtain stolen Medicare numbers for billing fraudulent home healthcare services. A federal task force has been established to combat hospice fraud specifically, acknowledging the systematic nature of these schemes. These independent confirmations demonstrate the investigation exposes genuine vulnerabilities in oversight rather than isolated incidents.

Newsom Deflects While Taxpayers Suffer

Governor Newsom responded to the fraud allegations by attacking investigators rather than addressing the evidence. He characterized both Shirley’s and Dr. Oz’s work as “political cosplay” and accused them of racial profiling, despite their use of public government databases without ethnic targeting. Newsom’s defensive posture protects a system where fraudsters exploit programs meant for vulnerable children and elderly patients. California taxpayers face the nation’s highest state taxes while funding ghost facilities that provide zero services. Low-income families suffer most when fraud diverts resources from legitimate childcare and hospice providers. The governor’s refusal to pursue accountability demonstrates the kind of government overreach and fiscal irresponsibility that has plagued California under Democrat leadership.

Shirley’s investigation builds on his previous Minnesota daycare fraud exposé, though that probe faced scrutiny when some claims were disputed by local inspectors. The California investigation appears more substantiated, utilizing multiple government data sources and documented site visits. No state or local law enforcement agencies have announced investigations into the specific facilities Shirley identified, leaving taxpayers wondering whether officials will act on this evidence. The investigation highlights fundamental problems with government-run social services: minimal oversight, perverse financial incentives, and bureaucratic resistance to accountability. As California continues expanding expensive entitlement programs without adequate fraud prevention, hardworking Americans funding these schemes deserve transparency and action, not dismissive political rhetoric from Sacramento.