Nick Shirley alleges $170M California daycare fraud in new video, echoing Dr. Oz’s hospice claims

LOS ANGELES - A "ghost" network of empty lots and strip-mall storefronts in California have become the front line of a multi-billion dollar federal-state clash, as a new investigation by YouTuber Nick Shirley alleging $170 million in daycare fraud adds fuel to the fire ignited by Dr. Mehmet Oz. 

While Dr. Oz’s recent "street investigation" exposed a $3.5 billion hospice scheme centered in Los Angeles, Shirley’s footage suggests the alleged rot extends into California’s taxpayer-funded childcare systems, where spending has surged by 1,000% despite stagnant population growth. 

Together, these dual probes paint a portrait of an alleged "fraud epidemic" that critics say has turned California into a national epicenter for organized Medicare and social service exploitation, even as Governor Gavin Newsom dismisses the efforts as "political cosplay" and racially charged profiling.

New allegations

What we know:

On Tuesday, Shirley published a 40-minute video on X alleging that "California is even bigger" than his previous findings in Minnesota regarding taxpayer-funded fraud. 

"California may have the largest amount of fraud in the country. As California is the state with the highest taxes and collects more money than any other state in America, it is filled with fraud. California’s version of Medicaid, called Medi-Cal, has more than doubled since 2022 from $108 billion to a proposed $222 billion in 2026," Shirley said.

PREVIOUS COVERAGE: YouTuber Nick Shirley in California to investigate alleged 'ghost' day care fraud

Despite a stable population, Los Angeles County has seen a massive 1,000% surge in hospice care spending, now accounting for 10% of all U.S. home healthcare expenditures, according to Shirley, who claimed the financial growth is coupled with systemic issues in government-funded daycare, where programs riddled with violations continue to receive funding.

Shirley and his team visited multiple locations in the Los Angeles and San Diego areas registered as daycare or hospice centers, only to find empty buildings, residential homes, or padlocked gates. 

Shirley claims to have uncovered over $170 million in fraud, stating these individuals "live in luxury with no consequences."

Dig deeper:

To verify his claims, Shirley used a mix of public and government datasets including public records from the federal Centers for Medicare & Medicaid Services (CMS) to identify facilities receiving high volumes of government funding. 

Other sources include the National Provider Identifier database to track the registration and active status of healthcare providers, as well as CCAP/CalWORKS records and official inspection logs from the California Department of Social Services that list violations and enrollment counts.

State fiscal reports from the Medi-Cal annual budget were also analyzed to show the increase in overall spending compared to population growth.

San Diego daycare investigation

Local perspective:

Shirley starts off in San Diego, where he and partner Amy Reichert visit the location of an alleged daycare in the middle of a shopping plaza. 

"A lot of the buildings are closed down or boarded up and have been graffitied," he said. "Then you also have this big dumpster right here with all this garbage, and the daycare is right there."

According to state records, Reichert said, "the last few visits from the state have said that 39 [kids] are enrolled."

"And right now we're seeing about five children," Shirley added. 

That daycare's "backup facility," the UMI Learning Center, was reportedly convicted in federal court in 2024 of having 150 "ghost kids," Reichert said.

The two move on to Hayder Sahra Family Child Care, where 14 children are allegedly enrolled. 

"According to state records, when inspectors arrived here, there were 14 kids enrolled but zero present. This place was also cited for having missing children's records and also not having a facility roster," Reichert said. 

Shirley goes on to knock on the door, pretending that he wants to enroll "Joey" into the daycare. 

"You don't know what's going on!" the woman who answered the door said. "You don't care! Is not enough Minnesota, you come here?" she added as she continues to yell in Somali.

"We're not targeting a Somali population; we're just going after daycare, and it just so happens that all the daycares we're at are Somali so far," he responds.

They visited another alleged daycare, where they were greeted by two children outside who said their teacher was not present. 

"Not here? So you guys are all by yourself?" Shirley asked. 

"Yeah. No one is here," the child responds. 

"My heart is breaking," Reicherst said. "This is unbelievable. It's supposed to be a licensed daycare and there's no adult anywhere." 

Van Nuys hospice and home health fraud

Local perspective:

Shirley then moved up a bit north to the Van Nuys neighborhood in Los Angeles, where Shirley said "there is home healthcare and hospice fraud literally everywhere." 

"California ranks the highest for Medicare, Medicaid, Med-Cal, whatever you want to call it," Shirley added. 

Their first stop was Garden of Angels Hospice. 

"They billed $4.8 million. Per beneficiary, they charged $5,807. Inside the same location, there’s also Blossom Hospice, and they received $3.4 million. It looks like there’s about 15 more hospice centers inside this one plaza. Some don’t even look like they’ve been registered with the CMS," he said. 

Shirley noted all the buildings claim to be hospice centers, such as Angels of Haven Hospice Care and Angels of Valley Hospice. 

At one point, Shirley asked workers in an office for information about checking in "grandma" into hospice. 

"We only do hospital referrals," the worker responded. When asked how many people are with the hospice, they said, "Irrelevant." 

Shirley points out Miracle Healing Hospice, which according to records, he said, charged $1.3 million, $32,000 per beneficiary for 38 beneficiaries." 

But when he knocked on the door, no one answered. A quick peek through the window showed an empty building, no furniture. 

What they're saying:

At one point, Shirley is met by a man later identified as "John Boyajian." 

Shirley asked Boyajian for help finding "hospice for our grandma." 

"You looking for hospice for who? For Dr. Oz? This is stupid. You can't record me," he replied. 

"We're looking for ‘Gardens of Angels.’ They billed $4.8 million. We have yours too, KMD Home Health, right?" Shirley asked. 

"First you have to research, If you want to learn, I'll teach you how to get after the crooked people," Boyajian replied. 

Shirley goes on to ask what Boyajian knows about Miracle Hospice, which received $1.3 million and is also empty. 

"I don't give a f**k about Miracle. Call the FBI," Boyajian responded.

Shirley noted the parking lot filled with expensive, flashy cars such as models of Mercedes, BMW, and Tesla. 

"This is what we call ‘welfare maxing,’ This building looks like it used to be some old motel that has turned into some cash-grab money grab for hospice here," he said.

Shirley visits a business that claims to teach people how to open a hospice, but he is met by two people who gave him information. Shortly afterward, Shirley's crew caught one of the alleged workers leaving the parking lot in a Maybach. 

"Where can we open a hospice at? Get the Maybach just like you!"

‘Defraud American taxpayers for years’

What they're saying:

Shirley expressed his frustration with the lack of government oversight on social media, stating, "We ALL work way too hard and pay too much in taxes for this to be happening. These fraudsters have been able to defraud American taxpayers for years without any pushback from the public and politicians."

"It’s sad to think about it. Here in the United States, we’re literally being defrauded by people taking advantage of old people, young people in daycare, disabled people with autism clinics, and no one’s doing anything to stop it. It’s time we stand up to these fraudsters," he said. 

What we don't know:

It remains unclear if the California Department of Social Services or local law enforcement have opened official inquiries into the specific addresses highlighted in the video. 

While Shirley cites a figure of $170 million, the exact breakdown of how that total was calculated across the various facilities shown has not been fully disclosed.

The backstory:

Shirley gained national attention after he posted a video in late December alleging that members of Minneapolis' large Somali community were running fake child care centers so they could collect federal child care subsidies.

The U.S. has occasionally seen fraud cases related to child care subsidies. But the Minneapolis video’s central claims — that business owners were billing the government for children they were not caring for — were disproven by inspectors. Nonetheless, the Trump administration attempted to freeze child care funding for Minnesota and five other Democratic-led states, including California, until a court ordered the funding to be released.

National spotlight on ‘fraud epidemic’

Big picture view:

Somali-run child care centers across the U.S. have become targets since Shirley's video caught the attention of the White House amid the administration’s immigration crackdown.

President Donald Trump has repeatedly targeted Somali immigrants with dehumanizing rhetoric, calling them "garbage" and "low IQ" and suggesting that Rep. Ilhan Omar, a Democrat who was born in Somalia, should be deported: "Throw her the hell out!" In Minnesota, 87% of foreign-born Somalis are naturalized U.S. citizens.

Trump has zeroed in on a years-old case in which a sprawling network of fraudsters — many of them Somali Americans — bilked Minnesota of an estimated $300 million that was supposed to help feed children and families. His rhetoric intensified after Shirley’s video was posted.

Prior to Shirley's video, Dr. Oz released a "street investigation" video also from Van Nuys, claiming a $3.5 billion fraud scheme is being run by "Russian and Armenian gangs." He identified a four-block radius containing 42 registered hospices, suggesting these are shell companies used to bill Medicare for healthy patients or "ghost" services.

PREVIOUS COVERAGE: Newsom, Dr. Oz feud intensifies over Armenian 'mafia' hospice fraud claims in Los Angeles

Gov. Newsom's office slammed the video as a political stunt and accused Oz of racial profiling. Newsom pointed out that the video featured law-abiding Armenian-owned businesses (like a bakery and art studio) and argued that Oz was "cosplaying" as a fraud fighter for an issue the state has been tackling for years.

The recent investigations by Shirley and Oz have cast a national spotlight on what critics describe as a "fraud epidemic" within California’s taxpayer-funded social systems. While their focuses differ—Shirley on "ghost" daycare centers and Oz on "sham" hospice facilities—both investigations point to one pattern: a massive influx of government funding into programs where the reported growth bears no correlation to the actual population or need. 

The investigations have ignited a fierce battle between the Trump administration and Newsom. While the state has defended its record—noting a 2021 moratorium on new hospice licenses and the revocation of over 280 licenses—critics argue the oversight remains "diabolically easy" to bypass. 

The situation is further complicated by allegations of racial profiling; Newsom recently filed a civil rights complaint against Oz for specifically linking the fraud to "Armenian mafia" networks, while local business owners in "Little Armenia" argue they are being unfairly scapegoated for systemic government failures. 

What's next:

The viral nature of the video may be putting pressure on California state auditors to examine the disbursement of funds to the named facilities. Shirley has indicated that his team will continue to track these "fraudsters" and has called on the public to demand accountability from local politicians regarding the use of tax dollars.