A Google information security engineer who had advance access to Google's year-end round-up of popular searches, is accused of making $1.2 million on a Polymarket bet based on that insider info.

36-year-old Google engineer Michele Spagnuolo has been charged with commodities fraud, wire fraud, and money laundering after federal investigators found that he had illegally placed and profited from a Polymarket bet in December. The bet was on what name would be Google's most-searched person of 2025, and Spagnuolo correctly bet, based on insider info, that it would the singer-songwriter D4vd — who was implicated in the death of his underage girlfriend in Los Angeles, after her body was found in the trunk of a car registered to him in September.

As ABC News reports via the federal complaint, at the time that Spagnuolo placed his bet in mid-October, Polymarket "assigned a near-zero probability to D4vd being 'the #1 searched person on Google this year.'" Then, when Google published its year-end search data, and D4vd came out as #1, Spagnuolo ended up netting $1.2 million from the bet.

"Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did because he had accessed Google's confidential, commercially valuable internal data," the complaint states.

Spagnuolo, an Italian citizen who resides in Switzerland, used the username AlphaRacoon in placing his bets.

"In total, from on or about October 15, 2025, through on or about December 4, 2025, Spagnuolo used the AlphaRaccoon account to risk approximately $2,754,092 on markets related to Google’s internal information," says the US Attorney's Office for the Southern District of New York.

"Today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets,” says US Attorney Jay Clayton in a statement. "As alleged, Spagnuolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket. Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted.”

And FBI Assistant Director in Charge James C. Barnacle, Jr. adds, "The FBI remains dedicated to searching for fraudsters who betray their employer for personal financial gains."

As the world of prediction-market betting grows, so does this kind of fraud. Another federal case involving a Polymarket bet was filed last month against a US Army soldier, Master Sgt. Gannon Ken Van Dyke, who allegedly used classified information to place a bet about the capture of former Venezuelan President Nicolas Maduro, netting $400K.

After weeks of frustration among the victims of the Ponzi-like scheme allegedly perpetrated by Sonoma County real estate investor Ken Mattson that he was still living in the lap of luxury, Mattson and his wife are being evicted from their Sonoma estate.

Ken Mattson and his wife Stacy, who have been fighting an eviction proceeding that stemmed from their bankruptcy filing, are going to be evicted from their $6 million Sonoma hills preoperty on June 15. As the Press Democrat was first to report, the Sonoma home will be sold, and its proceeds will become part of a restitution fund that will be used to pay back investors who lost money with Mattson.

Mattson was arrested one year ago, outside of a Napa gym, after months of rumbling around Sonoma County about the neglect of the local businesses Mattson had ammassed, the sale of property at fire-sale prices, and a growing number of angry investors seeking to get their money back. Those investors, as the Chronicle reports, were mostly "middle-income retirees" who thought they were buying shares in Mattson's ever-growing real estate portfolio, once said to be worth $413 million.

Instead, Mattson allegedly spent their money, buying the Sonoma estate, as well as an almost $10 million home designed by Julia Morgan in Piedmont, in addition to luxury cars like a Rolls Royce he was seen driving around Sonoma in until last year.

We learned last month that Mattson is expected to take a plea deal in federal court, pleading guilty to one count of wire fraud, for which he could spend up to 20 years in prison.

The eviction proceeding is related to one of the web of civil and criminal lawsuits against Mattson, as defrauded victims seek to be made whole. A bankruptcy judge is overseeing the liquidation of all of the assets owned by Mattson and his former business partner Timothy LeFever, who has claimed that Mattson acted alone in the fraud scheme.

As the Chronicle reports, the Piedmont home was sold earlier this month for $8.4 million, after going on the market two years ago for $9.9 million.

One victim, Santa Rosa resident Maria Crane, expressed frustration last week, speaking to the Chronicle, about the slowness of the wheels of justice. "We’re trying to keep our home, and he’s still living in a mansion that he used our money to buy," Crane said.

Meanwhile, some of the hospitality businesses Mattson built or purchased, including Cornerstone Sonoma and the Sonoma Cheese Factory on the town square, have been bought by new owners and are humming along once more. Cornerstone sold in December for $10.65 million, and two other historic properties near Sonoma Square, including the General's Daughter mansion and wedding venue (pictured above) sold last month for $6 million.

Mattson is due back in federal court on June 15, at which point he is expected to enter a plea, and after which a federal judge will decide the length of his sentence.

Previously: Sonoma County Real Estate Investor Ken Mattson to Take Guilty Plea In Federal Fraud Case

Top image courtesy of the General's Daughter.

A former financial advisor from Danville faces federal charges for allegedly defrauding 93 investors of $9.5 million over three decades following an FBI and IRS investigation.

Edwin Emmett Lickiss Jr., 78, of Danville, pleaded guilty in Oakland federal court Thursday to one count of wire fraud and one count of money laundering, according to a release from the US Attorney’s Office.

Lickiss reportedly admitted to running a Ponzi scheme that prosecutors say stretched from 1998 through September 2024 and involved 93 investors who were cheated out of at least $9.5 million following an investigation by the Federal Bureau of Investigation and the Internal Revenue Service.

Federal prosecutors say Lickiss falsely told investors he was placing their money into exclusive tax-free bonds that promised unusually high returns, while instead using newer investments to pay earlier clients and cover personal expenses, including home renovations, travel, vehicles, mortgages, and credit card payments.

Authorities say Lickiss also used the letterhead of his former firm, Foundation Financial Group, to issue fake promissory notes.

Lickiss is scheduled to be sentenced in August with prosecutors seeking six to 10 years in prison. As the Chronicle reports, his attorney is recommending a six-year sentence.

The US Securities and Exchange Commission has also filed a civil enforcement action against Lickiss in the Northern District of California.

Related: Sonoma County Real Estate Investor Ken Mattson to Take Guilty Plea In Federal Fraud Case

Image: David/Google Maps

Dozens of Napa County homeowners now have some answers as to why their property tax payments had not made it to the county tax collector this spring, and/or why the checks were getting deposited in other states.

The first piece of the puzzle has arrived in a mysterious case involving property tax checks that were disappearing in Napa County. Authorities say that nearly 50 Napa homeowners who used paper checks and the US mail to pay their property taxes had those checks stolen out of the mail, "washed," and desposited into accounts in multiple states.

ABC 7 first reported on the checks disappearing last month, when Napa County Treasurer and Tax Collector Robert Minahen put out an alert that around $1.5 million had been stolen in this fraud scheme.

In one case, a Napa vineyard owner cut a sizeable check for $225,000 which later had its payee information altered to a Florida LLC, and deposted there.

The FBI got involved, and they just announced an arrest that was made back in April in Phoenix, where at least a few of the checks had been deposited into one man's account there.

That suspect has been identified as Ricco Jackson, and as ABC 7 reports, he was arrested after he showed up at his bank to ask why his account had been frozen. Jackson allegedly deposited five checks into the account of a fake LLC in Phoenix, totaling $103,000. Jackson will now head to trial in federal court in August.

The investigation is continuing, and more arrests are likely to follow. The FBI believes that this is partly an inside job involving someone working for the US Postal Service who is intercepting mail in a targeted fashion.

As Minahan tells ABC 7, "I think you have somebody locally who's doing the stealing, somebody within the Bay Area between the Oakland post office, postal facility processing, and our office. And, they're then disseminating these stolen checks throughout the country."

In addition to Phoenix, stolen and washed checks have been deposited so far in Georgia, Florida, and North Carolina.

Minahan said that all but one bank had issued reimbursements to customers, and those have totaled $1.4 million to date. And he's encouraging everyone to pay their property taxes online instead of by mail.

A similar scheme, which appears to have remained unsolved, was happening last year in Santa Clara County. ABC 7's 7 On Your Side spoke to one San Jose property owner, Paul Glaser, whose $28,000 property tax check was stolen and cashed late last year, and as of February, his bank, Wells Fargo, was refusing to reimburse him.

When SF’s organizers disavowed SantaCon in 2014 due to the chaos it brought the city every Christmas, one of the event’s organizers in NYC leaned into the chaos by forming a charity — at first to appease officials and then later to allegedly collect and divert funds for personal use.

As SFist mentioned back in December, allegations had been circulating about Stefan Pildes, one of the original organizers of New York City’s SantaCon, who was suspected of funneling money that was meant for charitable causes into his own bank account while only donating a small fraction. Ticket sales and commissions paid by bars and restaurants reportedly brought SantaCon about $2.7 million in proceeds from 2019 through 2024 — all meant for charity, and federal prosecutors suspect Plides pocketed about half of it, according to the Chronicle.

Plides was arrested in Manhattan Wednesday and charged with federal wire fraud. Prosecutors say he used more than $1 million in donations meant for SantaCon to pay for expenses such as renovations to a lakefront New Jersey property, the lease on a Manhattan apartment, and an investment at a Costa Rica resort.

Gothamist has a rundown of the origins of SantaCon and how it spread from SF and Nevada to other cities. In 1990, the Cacophony Society’s John Law organized a Christmas-themed camp at one of the first Burning Man events in Nevada, prompting annual flash mobs in SF — then called Santarchy — in 1994. Plides and others brought it to NYC a few years later.

SantaCon’s turning point came in 2014, when SF organizers disavowed the event over mounting chaos — going so far as to stage a mock funeral — while NYC organizers, under Pildes, moved to contain it by forming the nonprofit Participatory Safety, Inc. at the NYPD’s urging.

Newer organizers Tom DiBell and Judi Henderson later reshaped the SF SantaCon into a more structured, charity-focused event, emphasizing toy drives and coordinated programming that gradually won back local bars after years of bans, per SFist.

In New York, as Gothamist reports, Participatory Safety positioned SantaCon as a charitable operation, bringing in money through $15 “Santa Badges,” bar commissions, and partnerships, with proceeds advertised as supporting local charities. But filings show a large share of revenue going to expenses tied to producing the event — staffing, permits, venues, and overhead — despite the nonprofit reporting little to no fundraising costs, a practice experts say can make its charitable output appear inflated.

The group also reported losses on cryptocurrency investments and directed both grant funding and operational spending toward Burning Man-related art projects.

“He took advantage of New Yorkers’ generous holiday spirit to finance his lifestyle through personal expenses, big and small,” said U.S. Attorney Jay Clayton in a statement. “No matter how you dress it up, fraud is fraud.  We are committed to protecting New Yorkers from those who exploit their enthusiasm and generosity.”

Ultimately, less than a fifth of the money raised through NYC’s SantaCon went to registered nonprofits between late 2014 and 2022.

Image: Bo Zaunders/Getty Images

Almost a year after he was arrested by federal agents and charged with fraud and money laundering, Sonoma County developer Ken Mattson appears to be taking a plea deal.

On Friday in federal court in Oakland, embattled real estate investor Ken Mattson and his attorneys had a hearing with the judge and prosecutors to discuss a preliminary plea offer, as the Press Democrat reports. Sources close to the case say that Mattson will be pleading guilty to at least one count of wire fraud in the case involving a massive real estate portfolio that was at one point valued at over $400 million.

Mattson, 64, was arrested by the feds in May 2025, a year after the real estate business he shared with partner Timothy LeFever appeared to be unraveling. The two men had, through "an array of limited liability companies," purchased some 257 properties across Sonoma, Solano, Sacramento, and Placer counties, including a collection of landmark properties in the town of Sonoma.

Around 200 investors, some of whom began to sense they were being jilted, raised alarms about Mattson and LeFever, and the federal indictment that came down accused Mattson of building "a classic Ponzi scheme" involving the sale of fake ownership interests to retirees — many of whom Mattson met through his church. (Mattson and his wife had been experiencing some backlash in the local community dating back to 2019 due to their vocal anti-LGBTQ views.)

Mattson is believed to have siphoned off around $100 million in investor funds for his own use.

LeFever, who has not been charged with any crime, pointed the finger squarely at Mattson for creating a "secret scheme," and he agreed in February to pay a $5 million settlement to help compensate victims.

The portfolio has been getting sold off, though it's unclear to what extent the victims in the case might be compensated after the banks take their share. As the Press Democrat reported last week, two landmark buildings off of Sonoma Square that had been owned by Mattson and LeFever, the Seven Branches Venue and Inn at 450 West Spain Street and the Victorian housing The General’s Daughter at 400 West Spain Street, sold in a bankruptcy auction for $3.2 million.

If convicted, one count of wire fraud could mean up to 20 years in prison for Mattson. US District Court Judge Jon S. Tigar will be deciding whether to accept the plea arrangement at a May 11 hearing, per Bay Area News Group.

A grassroots group, Wake Up Sonoma, which formed four years ago partly in opposition to Mattson and LeFever's real estate grab, issued a statement to the Press Democrat, saying, "We are glad to see this finally coming to some kind of at least partial resolution and that in some way it helps investors recoup funds."

"However," the group adds, "we hope that the enormity of his crimes are not reduced to just one count of wire fraud and that the plea deal does not let him off lightly. That would not be justice. He ruined many lives, disrupted our community for the past several years as well as more to come, and all of his crimes are pre meditated in service of his own greed."

Previously: Ongoing Wine Country Real Estate Scandal Draws Scrutiny of Lender Who Financed Accused Fraudster

Photo by Wesley Tingey

An SF woman was arrested at SFO and taken into custody by Tiburon police last week on suspicion of racking up $60,000 in fraudulent charges on her former boss’s credit card for extravagant purchases including international travel, luxury hotels, and spa services.

Naghmeh Novbakhtian, 35, of San Francisco, was arrested last Tuesday around 6:50 am in connection with a felony credit card fraud case upon her flight landing at San Francisco International Airport, according to the Tiburon Police Department.

Novbakhtian’s former boss told Tiburon police she had previously authorized Novbakhtian to use her credit card for childcare-related expenses when she was employed as the family’s nanny between July and December 2025.

The victim told police her credit card company recently alerted her to a dramatic uptick in unauthorized charges, amounting to around $60,000, in the months following Novbakhtian’s employment. Some of the charges included direct payments made to accounts associated with Novbakhtian, as well as international airline tickets under her name, luxury hotels, cosmetic and spa services, retail purchases, and ride services.

The police department says detectives are investigating whether Novbakhtian is connected to additional crimes, including a residential burglary that was previously reported.

The Marin County District Attorney’s Office is reviewing the case for felony grand theft and fraud charges. Tiburon police are asking anyone with additional information to contact the department.

Photo by Duke Cullinan

The jury in a lawsuit over Elon Musk’s 2022 takeover of Twitter found he misled investors by claiming he might walk away over the platform’s bot estimates, prompting some to sell during a downturn before he ultimately went through with the original deal — but fraud claims were dropped.

Nine jurors spent almost four days deliberating the arguments laid out as part of a class-action lawsuit during the nearly three-week trial at San Francisco Superior Court, as KQED reports, filed just before Elon Musk completed his $44 billion acquisition of Twitter in 2022, as SFist reported at the time.

The jurors found Musk misled investors by publicly questioning the platform’s bot estimates and suggesting the deal could be paused, which attorneys argued drove down the company’s stock price in the weeks after he signed a binding agreement, but they rejected claims that he engaged in a broader scheme to defraud investors.

The Associated Press reports that Musk could owe about $2.1 billion in damages to shareholders who sold stock during that period, but per KQED, that figure could be closer to $2.6 billion when both shares and stock options are calculated. According to the plaintiffs’ lawyers, damages will likely take six months to reach the plaintiffs. Per the AP, Musk is currently worth an estimated $814 billion, much of it through Tesla shares.

On the stand, as KQED reports, Musk said his tweets reflected his personal views and were not intended to manipulate the market, while reiterating his belief that Twitter had understated the number of bots, at times claiming most replies to his posts were spam.

He tweeted that the deal was “temporarily on hold” over bot concerns, per SFist, then hours later said he remained committed, before again suggesting days later that bots could make up as much as 20% of users, as KQED reports. During that stretch, Twitter’s stock fell nearly 18%.

After attempting to withdraw, Twitter sued in Delaware to enforce the agreement, per the AP. Just before trial, Musk reversed course and agreed to complete the purchase at the original price, per SFist.

The AP reports that shares had fallen to about $33 — roughly 40% below the agreed purchase price — during the uncertainty, losses the lawsuit ties to investors who sold amid the volatility. Musk argued that completing the deal at the original price ultimately benefited most shareholders.

"I can't control whether people sell their stock, but everyone who held the stock fared extremely well," Musk said.

Plaintiffs argued Musk’s statements came as Tesla’s stock declined and the deal became more costly, alleging he sought to drive down Twitter’s share price to renegotiate or exit the agreement, as the AP reports. Their attorney said the tweets were deliberate, not impulsive, and urged jurors to compensate investors who sold at a loss after Musk said the deal was “on hold.”

“He was basically saying the company was a sham,” said Mark Molumphy, a lawyer for the plaintiffs.

“Twitter was an important institution in San Francisco,” before Musk took it over, Molumphy said, per KQED. “It was not a sham; it was a real company, and the way he dragged it through the mud in order to basically get a better deal was atrocious.”

Musk’s legal team repeatedly sought a mistrial, arguing he could not receive a fair trial in San Francisco due to public bias.

Attorneys for the plaintiffs called the verdict a precedent, signaling that executives must carefully consider public statements in high-stakes deals.

“Going forward, this will have a real chilling effect,” said Monte Mann, a Chicago-based business litigation partner told KQED. “Executives and dealmakers will need to think carefully about how public statements can be interpreted — not just as disclosure, but as part of the negotiation itself.”

The case reportedly marks the first time a jury held Musk liable for his social media posts, though he had previously been acquitted in a 2018 Tesla-related investor case, as SFist reported in 2023.

“It's an important victory, not just for investors of Twitter, but for the public markets,” said Joseph Cotchett, an attorney for the plaintiffs, per the AP. “I think the jury's verdict sends a strong message that just because you're a rich and powerful person, you still have to obey the law, and no man is above the law.”

SAN FRANCISCO, CALIFORNIA - MARCH 04: Elon Musk arrives at federal court  on March 4, 2026 in San Francisco, California. Musk is on trial in a  civil case for allegedly manipulating Twitter's stock price prior to his  purchase of the company in 2022. (Photo by Josh Edelson/Getty Images)

Previously: Twitter Shareholder Hits Elon Musk with Class Action Suit for Market Manipulation, False Statements

Criminal charges just came down on a former SF homelessness nonprofit CEO accused of buying a Tesla with public money, among a slew of other financial improprieties, and she's facing nine felony charges.

We know that San Francisco has had a number of nonprofit spending scandals over the last several years and it is quite difficult to keep track of them all. But one involving the former CEO of a Bayview homelessness nonprofit called United Council of Human Services (UCHS) goes absolutely beyond the pale. That CEO is the now-ousted Gwendolyn Westbrook, who was fired in 2023 after the Chronicle reported on a lawsuit that alleged Westbrook had doubled her own salary, and that "current and former employees were aware of her buying a new Tesla, giving her Infiniti sport utility vehicle to her niece, buying vehicles for a close family friend and her cousins and vacationing in Aruba."

For good measure, per the Chron, the same lawsuit alleged that Westbrook "was paying for relatives’ weddings and flaunting a trunk full of high-priced jewelry," while submitting financial statements that vaguely described hundreds of thousands in spending simply as "other expenses."

None of those allegations have been specifically proven or disproven, but it sure seems like something untoward was happening with UCHS's bookkeeping under Gwendolyn Westbrook. Today, the Chronicle reports that SF District Attorney Brooke Jenkins's office has charged Westbook with nine felonies, largely around the misuse of public funds. A statement from Jenkins's office does not specifically detail the improprieties, just that they add up to about $1.2 million.

"According to court documents, Ms. Westbrook misappropriated more than $1.2 million in public funds from UCHS accounts to herself through a combination of undocumented cash withdrawals and self-issued payments, and that additional large sums withdrawn from UCHS accounts remain unaccounted for," Jenkins's office announced Monday. "Prosecutors allege that between 2019 and 2023, Ms. Westbrook engaged in unauthorized self-payments, improper cash withdrawals, and fraudulent reimbursement practices that diverted public funds for personal use."

UCHS was originally a mobile soup kitchen known as Mother Brown’s Dining Room, and transitioned into becoming a larger homeless shelter organization. According the the Chronicle, Westbrook "led the nonprofit for nearly two decades before her dismissal in 2023."

Westbrook was reportedly booked into SF County Jail on Friday, but has since been released. She's scheduled to be arraigned on Tuesday.

Related: SF’s 10 Wildest Nonprofit Spending Scandals of the Last Five Years, Ranked [SFist]

Image: SF Bay View Newspaper via Youtube

A 29-year-old towing company owner was sentenced to five years in federal prison for orchestrating a plan to set the trucks of four rival companies on fire, along with two years for submitting fraudulent car insurance claims, with state welfare fraud charges pending.

As Bay City News reports, Jose Vicente Badillo, 29, who's the owner of San Francisco-based companies Auto Towing and Specialty Towing, was sentenced to 60 months in federal prison on February 12 after pleading guilty to committing arson. As Mission Local reports, Badillo carried out a plan between April and October 2023 in which he conspired with others to set fire to six different tow trucks owned by four competitors in San Francisco and East Palo Alto, according to court documents.

Bay City News writes that Badillo’s plan was in retaliation to perceived wrongdoings by his rivals as well as an effort to drive more customers to his businesses. Additionally, Badillo was sentenced in a separate federal case on February 13 to 27 months in prison for conspiring to submit false auto insurance claims, costing hundreds of thousands of dollars in losses, between 2017 and 2021 approximately, which he’ll serve at the same time as the arson sentence, per Bay City News.

Mission Local reports that the two cases are part of a long roster of cases opened against Badillo in recent years. In 2023, the San Francisco district attorney charged Badillo on counts of welfare fraud, perjury, and grand theft for allegedly lying on his welfare application. Per Mission Local, while Badillo’s companies were generating $2 million per year in revenue, which went toward a $250,000 Lamborghini and several other large purchases, Badillo and his partner managed to receive full Medi-Cal, CalFresh, and CalWORKS benefits.

Additionally, Mission Local reports that Badillo has been prohibited from working with the city of San Francisco since February 2024 after it was discovered that one of Badillo’s companies installed fake “no parking” signs in a bank parking lot in 2023 and illegally towed cars. As Mission Local reported last fall, Badillo was reportedly still working with the city under a different business name despite no longer having a permit.

Image: TrongNguyen/Getty Images

Five people, including two from the Bay Area, have been sentenced to prison terms and restitution for their parts in a strange fraud scheme involving the creation of sham driver and customer accounts on the DoorDash platform.

The public learned of the case in October 2024, when four individuals were arrested in connection with a conspiracy to defraud DoorDash. The scheme involved the use of fake customer and driver accounts, and the creation of fake orders for which the drivers would be paid using inside access to the backend of DoorDash's systems.

The arrestees were 30-year-old Sayee Chaitanya Reddy Devagiri and 29-year-old Manaswi Mandadapu, both in Orange County, along with 30-year-old Hari Vamsi Anne of Cypress, Texas, and 29-year-old Matheus Duarte, a Brazilian national who was arrested in Mountain House, California, and who now resides in Hayward.

Those arrests came after a onetime employee of DoorDash, Dixon, California resident Tyler Thomas Bottenhorn, had already been separately charged with conspiracy to commit wire fraud in a federal criminal case filed in September 2022 — clearly after the fraud had been caught by DoorDash.

According to federal prosecutors, Bottenhorn had briefly worked for DoorDash in 2020, and used his knowledge of and credentials for the system's backend to launch the scheme. The other four defendents, including former DoorDash driver Devagiri, worked to create fraudulent driver accounts and fictitious customers accounts, ultimately stealing over $2.5 million from DoorDash by placing and fulfilling high-value food orders that never existed.

The scheme went on for some number of months between 2020 and 2021.

"Devagiri would then use DoorDash software to change the [completed] orders from 'delivered' status to 'in process' status and manually reassign the orders to driver accounts he and others controlled, beginning the process again," the Justice Department said. "This procedure usually took less than five minutes, and was repeated hundreds of times for many of the orders."

Bottenhorn pleaded guilty in November 2023 and clearly gave up the names of the other four involved. Devagiri and Mandadapu both pleaded guilty earlier this year.

On Tuesday, the US Department of Justice announced that the quintet had all been sentenced, with Bottenhorn sentenced to time served. He is also required to pay $2,127,216 in restitution.

Duarte received a sentence of 25 months in federal prison, Anne 22 months, Devagiri 21 months, and Mandadapu 12 months.

Duarte, Anne, Devagiri and Mandadapu also must each pay $2,590,195 in restitution.

Previously: Man Convicted Of Defrauding Bay Area Investors Over Fake Space Tech Company — For A Mere $50K

Dr Oz’s latest conspiracy theory says that the “Russian Armenia mafia” is running fake hospice centers in LA, and Gavin Newsom is taking legal action, as many of the businesses Oz highlights aren’t even hospice care.

In the run-up to the brutal and deadly ICE operations in Minneapolis, it is probably not just a coincidence that in the weeks beforehand, right-wing media embraced some YouTuber's conspiracy theory about supposed child care fraud by Somali-run day care centers in that city. The story did not really break through to the mainstream press, because it completely fell apart once any sensible scrutiny was applied. But the yarn was still a blockbuster in the echo chamber of the wingnutosphere, and remains prominent in Team Trump’s talking points.

Third-rate TV personality and now Centers for Medicare & Medicaid Services chief Dr Mehmet Oz just tried to do a sequel version of this viral ‘gotcha video,’ and alleges similar fraud by immigrants in LA’s Van Nuys neighborhood. But the New York Times reports that California Governor Gavin Newsom has filed a civil rights complaint against Dr Oz over the video, saying that Oz “spewed baseless and racially charged allegations” against Armenian-Americans.

Indeed, Oz makes some pretty inflammatory claims that the Russian mob is controlling dozens of Armenian-run LA hospice centers. But like a bottle of non-alcoholic whiskey, Oz has “zero proof.”

Dr Oz’s video posted Tuesday is seen above. “In this four-block area in Los Angeles, there are 42 hospices,” Oz claims citing no evidence. “These guys stole $16 million, and listen carefully, the main guy went to jail for two years, for stealing $16 million. Which is a good trade-off for a lot of folks.”

Oz also does not cite which case he is referring to. I found one case matching these $16 million Medicare hospice fraud details, wherein the main defendant was sentenced to five years in prison.

But Oz’s wildest claims are where he declares “It’s run, quite a bit of it, by the Russian Armenian mafia. You’ll notice the lettering and language of it behind me is of that dialect.”

View this post on Instagram

A post shared by Zartonk Media (@zartonkmedia)

As noted in the Instagram post above, Dr Oz is standing in front of a bakery while alleging that it is a Russian mob sham hospice. That bakery has lost a reported 30% in sales since the video was posted.

Hospice fraud is indeed a thing. As the Bay Area News Group’s report on this points out, the Newsom administration has revoked 280 hospice licenses for fraud in the last four years.

There is no way Gavin Newsom is going to get a favorable ruling in this civil rights complaint. The Trump administration is not going to rule against itself! So maybe Newsom just wants to set a boundary.

Or worse yet, maybe he feels that like in Minnesota, these attacks on immigrant-owned businesses are a prelude to an ICE crackdown that could spiral out of control.

Related: Newsom Stands by Doctor Facing Charges for Allegedly Mailing Abortion Pills to Louisiana Woman [SFist]

Image: @DrOzCMS via Twitter

The Trump administration is now waging more political war with Democrat-led states, announcing the withholding of $10 billion in social services funding to five states: Minnesota, California, New York, Illinois, and Colorado.

Citing wide-scale fraud for which there has been no evidence outside of Minnesota, the Trump administration is reportedly freezing funds distributed by the Department of Health and Human Services (HHS). Administration officials broke the news with the New York Post Tuesday, saying that the freeze would affect $7 billion for the Temporary Assistance for Needy Families program, around $2.4 billion for the Child Care Development Fund, and $870 million for social services grants primarily benefiting children.

The sudden freeze at five states with large populations is bound to disrupt funding for poor families, and it comes in response to conservative furor over a fraud scandal that's been unfolding in Minnesota involving billions of dollars in social services funds.

President Trump, on Truth Social on Tuesday, made reference to an investigation of potential similar fraud in California that has not been announced, and no evidence of this type of fraud in California has recently come to light.

"California, under Governor Gavin Newscum, is more corrupt than Minnesota, if that’s possible??? The Fraud Investigation of California has begun," Trump wrote.

"For too long, Democrat-led states and Governors have been complicit in allowing massive amounts of fraud to occur under their watch," said HHS spokesperson Andrew Nixon, in a statement, per CBS News. "Under the Trump Administration, we are ensuring that federal taxpayer dollars are being used for legitimate purposes. We will ensure these states are following the law and protecting hard-earned taxpayer money."

The attack is broad and, of course, without evidence outside of the Minnesota cases, in which over 90 people face charges in connection with fraudulent dealings in multiple social programs, including ones that serve hungry children, children with autism, seniors, and people with disabilities. Many of those charged, though not all, are of Somali descent, as CBS notes, and this has further fueled conservative ire about the scandal.

One Somali-linked nonprofit, Feeding Our Future, is accused of using $250 million in COVID-era grants to purchase luxury cars and real estate.

The Minnesota scandals appear to have, at least for now, dealt a significant blow to Governor Tim Walz's political future, and he announced Monday that he was ending his run for a third term as governor.

He said at a press conference, "We’ll win the fight against the fraudsters, but the political gamesmanship we’re seeing from Republicans is only making that fight harder."

"To use the power of the government to harm the neediest Americans is immoral and indefensible," said New York Senator Kirsten Gillibrand in a statement today, about the funding freezes. "This has nothing to do with fraud and everything to do with political retribution that punishes poor children in need of assistance."

And the Illinois Department of Human Services said in a statement, "This is yet another politically-motivated action by the Trump Administration that confuses families and leaves states with more questions than answers."

As with the administration's attempt to withhold SNAP funds last fall during the government shutdown, using the funds as a baldfaced political weapon against Democrats, this move is likely to face immediate legal challenges.

Top image: Minnesota Gov. Tim Walz speaks during a press conference at the State Capitol building on January 5, 2026 in St. Paul, Minnesota. Walz announced today that he is abandoning his re-election campaign for governor, blaming scrutiny from President Donald Trump for his decision. (Photo by Stephen Maturen/Getty Images)

The wild corruption case of a SF City Hall Workers' Comp department employee who embezzled $627,118 and blew city money and personal tech gear has ended, and that now-fired employee is headed to prison.

We occasionally find SF City Hall corruption stories that are just plain funny. One example that comes to mind is the embezzlement scheme of former assistant director of finance and technology for the SF City Hall HR workers’ comp division, Stanley Ellicott. He was charged in January 2024 for invoicing the city $14,000 for “earthquake supplies,” though according to his charging statement from the DA’s office, “The actual items purchased were three Oculus virtual reality headsets, four Rylo Action cameras, an HDTV projector, a Nikon DSLR camera worth nearly $2,000, four GoPro cameras, three mini instant cameras, six Microsoft tablets, and four OSMO pocket cameras with expansion kits.” Ellicott admits he then went and just resold most of that shit on eBay.

That scandal got a lot less funny when we learned a couple months later that Ellicott had allegedly embezzled more than $627,000 from the city’s workers’ compensation budget. The young man seemed to know the gig was up, and he pleaded guilty last month.

Now DA Brooke Jenkins just announced today that Ellicott has been sentenced to three years in a state prison.

“Mr Ellicott had enormous responsibility as the Assistant Director of Finance and Technology in the City’s Workers’ Compensation department and he is being held accountable for violating the public trust,” Jenkins's office said in a press release. “I am committed to rooting out public corruption at all levels and protecting residents and taxpayers from fraud and gross misconduct perpetrated by city employees.”

Ellicott started a fake business in Illinois called IAG Services, and between May 2019 and January 2024, he billed the city’s HR workers’ compensation fund for $627,118.86 for “auditing services.” There is no evidence that IAG Services, which was secretly Ellicott’s company, ever did any form of auditing. And this is the sort of thing that auditing is supposed to catch, is it not?

“The website for the Illinois business ‘IAG Services’ created in Oakland – where Ellicott lives – and IAG emails sent to Ellicott’s work address that appear to be created by him,” the DA’s statement adds. “On several occasions, Mr. Ellicott emailed his subordinates [at SF City Hall] and directed them to process payments to IAG that he had approved, enlisting their unknowing and unwitting assistance in his fraud.”

Ellicott pleaded guilty to two counts of misappropriation of public money, grand theft, financial conflict of interest, presentation of fraudulent claim, money laundering, and aiding and abetting a financial conflict of interest in a government contract.

Though ironically, the plea deal he took with that guilty plea resolves his fraud charges, the charges he got for buying VR headsets with city money that he billed as “earthquake supplies.”

Related: SF Worker Who Bought VR Headsets With City Money Now Accused of Stealing $627K In Workers' Comp [SFist]

Image: BERLIN, GERMANY - NOVEMBER 1: A visitor wears VR goggles to observe a simulation from inside the Einstein Telescope EMR at the Museum of Natural History during the opening day of the 2025 Berlin Science Week on November 1, 2025 in Berlin, Germany. Berlin Science Week, which runs from November 1-11, is taking place under the motto "Beyond Now" with over 350 events across the city to explore the question of how science contributes to overcoming today's crises and opening up new perspectives for the future. (Photo by Omer Messinger/Getty Images)

A new wrinkle in the case of a Sonoma County real estate tycoon accused of bilking nearly 200 investors out of $46 million, as it turns out most of his properties were financed by a single lender, raising questions about what they knew.

One of the bigger scandals currently developing up in wine country is the case of Sonoma County developer Kenneth Mattson, who was arrested by the feds in May and charged with a sweeping range of fraudulent real estate deals. Mattson had purchased nearly 90 properties across wine country, but his federal indictment called his real estate empire a “a classic Ponzi scheme,” wherein Mattson allegedly “offered and sold fake ownership interests” in properties to people who never actually received the ownership interests they paid for. Interestingly, most of Mattson’s investors were older retired people he recruited at church groups, and for good measure, Mattson and his wife were well-known anti-LGBTQ crusaders.  

The Santa Rosa Press Democrat has been doing some serious digging through bankruptcy and property records, now that Mattson is being forced to sell his properties at fire-sale prices. They discovered that one property was purchased in partnership with an investment company amusingly named Tony’s Salami & Cheese Fund I. Perhaps less amusingly, that company just happens to share the exact same Sacramento address as a lender known as Socotra Capital. And as the Press Democrat reports, this is raising questions about the degree to which Socotra Capital was aware of Mattson’s alleged Ponzi scheming.

After all, according to prosecturos, Socotra Capital was a crucial part of Mattson’s real estate purchasing scheme. The Press Democrat reports that Socotra gave Mattson's firm "at least 92 loans to KS Mattson Partners starting in 2017." Now that Mattson is in fire-sale mode, the Press Democrat adds that “Socotra now holds deeds of trust on 75 properties held by either KS Mattson Partners or entities belonging to LeFever Mattson Inc,” and that “The loans on those properties total $102.3 million.”

Socotra Capital strongly maintains their innocence in the matter.

“With regards to KS Mattson, we had no knowledge or involvement in Mattson’s alleged wrongdoing. Socotra acted appropriately and in accordance with the law at all times,” a Socotra spokesperson told the Press Democrat. “As a secured, first-position lender, all our loans are secured by high-quality real estate, including those related to KS Mattson loans.”

We should note that Socotra Capital does not face any charges, and were not named in Mattson’s federal indictment (rather, they were named as “LENDING ENTITY 1,” as the feds generally describe people and parties anonymously in their indictments when those parties are not currently suspected of wrongdoing).

Meanwhile, Mattson is currently out of custody on $4 million bail, and his preliminary court proceedings are still getting started.

Related: Wine Country Developer Arrested by Feds, Charged With Fraud and Money Laundering [SFist]

Image via Google Street View