Those were the first words I heard after the ring of my phone shook me violently awake. I had been back in my bed for only an hour. The wife, the kids, all piled together since I had been gone for nearly two weeks.

What started as coverage in Las Vegas for O.J. Simpson’s release from jail quickly became coverage also for the Route 91 terror attack. I flew home after about 10 days of nonstop coverage and very little sleep and went straight into harvest for our 2017 wine vintage. So after 12 days of intense news coverage and physical hard work, I was exhausted, and within minutes my sleep was deep…until that call.

My heart raced, and I knew this would be big. Immediately called New York and got into the control room. All night long, I sat in the closet in our guest room so I wouldn’t wake up the kids or my wife reporting on the fire that was ravaging through Wine Country. I knew the area well; I grew up there, and one of my first television jobs was there. I knew the roads and the hills like my own backyard.

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Because these matters involve identifiable public officials and potentially active investigations, I’m being careful to distinguish between what sources have told me and what has been independently confirmed, but the investigations are significant in scope.

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My phone rang, and it was one of those sources every reporter hopes to find during a career. He wasn’t someone who called often. He didn’t chase headlines. And when he did call, I listened. A news buddy, I call them, and he was one.

“Can we talk off the record first?” he asked.

That was never unusual because most of my investigative reporting started that way. It was a way for a source to gauge my interest and decide how to proceed safely, and I always honored that request because if you don’t… no more calls.

After a few minutes of catching up, he paused and asked a question that caught me completely off guard.

“You know they’ve had the laptop for a while...right?”

“What laptop?” I asked.

“Anthony Weiner’s.”

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One of the biggest lessons during COVID wasn’t about viruses. It was about money, and it was about “science”, two concepts that still drive COVID to this day.

And if there’s one thing I’ve learned after more than two decades covering wars, disasters, politics and corruption, it’s this: Follow the money.

Early in the pandemic, everyone was focused on the daily case counts, lockdowns, masks, vaccines, the “science”, political fights, and the ever-changing rules. I understood why. People were scared. Families were hurting. Businesses were shutting down overnight. Hospitals were overwhelmed in certain places. Nobody knew exactly what came next, and our leaders at the local, state, and federal levels were inconsistent at best.

While much of America was consumed by the daily headlines, another story was quietly developing beneath the surface, and it would eventually become one of the biggest fraud scandals in American history. I’ve covered COVID Fraud in a previous chapter, but it needs to be noted here as I discuss the whole issue and my reporting from my couch in Napa during the pandemic.

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By then, I had immersed myself in a very different life.

I was coaching soccer. Coaching baseball. Helping open our tasting room and coffee pub in Napa. I also supported my wife as she continued pursuing her dreams as an actress and television host. Between family, business, and community commitments, my time devoted to news was almost nonexistent.

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A test is something you take in a classroom. A test is filling in bubbles with a No. 2 pencil. A test is something you can simply take again if things don’t go as planned. This wasn’t a test, this was a very expensive operation that had been in the works since before many of these sailors were born.

By the morning of the launch, months of planning, years of development, and billions of dollars in technology had all converged into a single moment somewhere in the Pacific Ocean. The crew of USS Lake Erie had spent countless hours preparing for this day. The engineers, radar operators, weapons teams, sailors, officers…they had all prepared.

Even the sailors whose jobs had nothing to do with missile defense understood the significance of what was about to happen.

Captain Randal Hendrickson, who would later become an Admiral, ran the ship and was ultimately responsible for the overall test. Tall and slender, he had a kind presence that didn’t subtract from formal Naval speak, dress, and work ethic. He was an Aegis computer for me, quickly rattling off statistics, plans, and expectations, all the while leading the ship and providing our guidance.

The test itself sounded simple enough. A ballistic missile target would be launched from Kauai. A drone aircraft would simulate a second threat at a much lower altitude. So it would be as if a missile were launched at the U.S. and then another one at the ship. The system would need to take both threats down at the same time.

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You don’t become a soldier, a firefighter, a fisherman, or a sailor. You don’t live their lives. But for a few days—or sometimes just a few hours—you get a glimpse into what they do, how they think, and what they sacrifice.

Over the years at FOX News, that privilege took me around the world. I spent time with troops in the Persian Gulf, Kuwait, Bahrain, all over Asia and South America, and in Iraq. I worked alongside military personnel during disaster relief operations after the tsunamis. I flew with the Air Force, rode with the Army, embedded with Marines, worked alongside the Coast Guard, and spent countless hours with the United States Navy.

Covering Rim of the Pacific exercises—RIMPAC—was always among my favorite assignments. During one of those trips, I met a Navy captain who suggested something that immediately caught my attention.

“You ought to come cover one of our missile tests.”

As a kid, I remembered hearing about President Ronald Reagan’s Strategic Defense Initiative—what critics jokingly called “Star Wars.” The concept seemed almost impossible: using one missile to shoot down another missile. A bullet hitting a bullet.

Many people mocked the idea.

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The blood had dried by then, but it remained on just about everything…abandoned T-shirts, blankets, shoes, and pieces of clothing scattered across the grounds. Cleanup had not yet begun because the investigation was still ongoing. The entire festival site remained frozen in time — almost like the city itself was afraid to move.

And the numbers still boggled the mind.

Fifty-eight people were murdered that night, and two more would die from their wounds later. Hundreds more wounded. Thousands are still traumatized.

Standing there day after day, looking across the Route 91 grounds toward Mandalay Bay, the entire scene became surreal. You could still see the blown-out windows from the shooter’s suite high above the Strip. Early in the morning, before the desert sun fully took over the skyline, you could occasionally see curtains hanging out from the broken windows, moving slightly in the breeze. Small reminders that this wasn’t history yet. It was still an active crime scene.

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As they advanced, he glanced back at us as we walked away from our SUV. He gave me a quick wave with his hand, motioning for us to stay behind them. Of course, they were going first. We were unarmed. My photographer, Eric, had a backpack carrying our satellite uplink so we could report live, along with a video camera. I carried a microphone, a notebook in my back pocket, a pen, and not much else. My producer was right behind us. We, too, were crouched and walking towards uncertainty.

The tactical team moved toward the entrance while people still streamed out, though not nearly as many as there had been just minutes earlier. I remember saying out loud, “Don’t worry, we’ll stay back. We’ll stay out of the way.” As much as I wanted to get closer and document what was happening, I also didn’t want to become part of the story, put my crew in danger, or interfere with officers heading into a situation they clearly still didn’t fully understand.

That night turned into 17 straight hours of reporting and one of the most horrific scenes I’ve ever witnessed. I saw a rolling freezer used as a stretcher. Bodies covered under blankets along the sidewalk. People walking out shirtless because they had ripped off their clothes to use as tourniquets for victims who had been shot by an unknown gunman.

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By Adam Housley

It Started With Tips That Didn’t Make Sense

The first calls and messages coming in during the late summer of 2020 didn’t sound like isolated mistakes; it all sounded coordinated.

“They turned off the alarms and opened the vault.” One longtime law enforcement source with direct knowledge of the fraud investigation told me early on.

Friends, sources, and law enforcement contacts began flagging something strange and asking me to look into it, since I was now an independent journalist, and always one they could trust. Unemployment benefits were showing up where they shouldn’t. Debit cards issued to people who never applied. Payments going to inmates. Multiple claims tied to the same address. People using the same photograph more than 100 times for claims; some even used Nancy Pelosi and Dianne Feinstein multiple times to successfully get COVID relief money. All got paid with your money.

At first, it felt like the kind of bureaucratic breakdown you’d expect in a crisis. But it didn’t take long to realize this wasn’t just mismanagement; it was a gold rush of fraud and corruption, and California leaders were letting it happen because they were more worried about image than about ensuring that EDD money and other relief efforts went to the people who actually needed it.

A System Rushed — and Exposed

When COVID shut down large parts of the economy, California—like much of the country—moved fast. Billions of dollars were disbursed through the Employment Development Department (EDD) and in other ways to keep people and businesses afloat. The government was shutting us down, but also propping us up at the same time.

And to be clear: speed mattered. People needed help.

“Gavin gave away at least 60 billion to fraud, and we will never know the extent. Nationwide… It’s gonna be over 1 trillion in fraud. But again…we’ll never know it all,” said one investigator.

According to multiple sources I spoke with at the time—and continue to hear from to this day, basic fraud prevention tools, which were already weak, were either purposely paused, weakened, or simply overwhelmed. Then, when federal investigators began looking into the fraud, EDD and California state leaders deliberately hindered the investigation because they didn’t want the bad press, forcing them to issue subpoenas rather than trying to help identify the massive theft of public money.

Organized Crime Didn’t Miss The Opportunity

Identity verification protocols weren’t keeping up. Cross-checking systems lagged behind. And in some cases, warnings were raised internally but were purposely not acted on. Meanwhile, criminals weren’t waiting, and California officials knew it was happening the entire time and failed to stop the flow.

This wasn’t random fraud; it was organized, calculated, and fast-moving. I was told it began on day one but quickly spread. The open door widened further when a couple of news reports emerged showing families in Southern California who did not receive the necessary funds to help during COVID and were at risk of eviction, which didn’t paint a good picture for California state leadership. Governor Newsom and other leaders were worried about bad press, a common theme throughout the COVID debacle.

As one source told me, “That’s when Governor Newsom went to California EDD and told them…Approve Everything! I don’t care.”

Of course, the reason for the somewhat panicked order was due to bad press. “Nobody wants to see a family in LA without the money they need to survive.” But for every legitimate family that slipped through the cracks, there were thousand whom purposely stole money and stole big.

My sources continue to point to international fraud rings, domestic criminal networks, and opportunists, all of which tapped into the same vulnerabilities. Initially, it was criminals using stolen identities—many pulled from previous data breaches—but they quickly learned that completely fabricated identities slipped through without a hitch. Basically, as the governor demanded, everything got approved.

Also, investigators tell me many of these overseas organized crime syndicates use American citizens as money mules to cash out the UI bank cards at US banks, then either wire the money via Bitcoin to overseas wallets or use the informal, trust-based money transfer system, Hawala, throughout the Middle East and Africa. They moved funds without physical cash movement or traditional bank involvement to send or wire it overseas.

One source described it bluntly: “They were filing faster than the state could even understand what was happening.”

And what about all the money that was racing out of California faster than water runoff from a Sierra downpour? The mass majority didn’t stay in California, or even in the country. As I have repeatedly reported, a significant portion of fraudulent funds flowed out of state—and out of the country—almost immediately after issuance. Much of it went to criminal syndicates around the globe.

The biggest offender…APT41 (also known as Double Dragon) is a sophisticated Chinese state-sponsored advanced persistent threat group that carries out government-directed espionage while simultaneously pursuing financially motivated cybercrime, often for personal gain by the operators. As much as investigators have been able to find, or allowed to find, APT41 seems to have grabbed the most money in the high hundreds of millions. Southeast Asian organized crime was also a big player, but so were criminal groups in Nigeria, Latin America, and Russian criminals were also heavily involved.

The larger media did catch on…kinda. While I reported about inmates—thousands of them—inside Californias prisons who were able to successfully file fraudulent unemployment claims, the reports and outrage began to sink in. People already incarcerated were receiving benefits intended for workers who had lost jobs during the pandemic. The press was all over it, but failed to dig deeper.

According to sources and subsequent confirmations, inmate identities were used on a massive scale. In some cases, inmates themselves orchestrated the fraud. In others, outside networks used prison records as a ready-made database.

A law enforcement contact told me, “It was one of the easiest entry points. The data was there. The system wasn’t catching it.”

Then there were organizations like large, big-city teachers’ unions. In one case, while the entire staff in that county was paid their normal salaries, and some even got raises during COVID, nearly 80% applied for COVID funds from the State of California and received them. But even that was pennies as compared to the massive fraud rings and operations from criminals outside the country.

And again, the question that kept coming up: How was this not stopped immediately?

California Leaders Gradually Admit, but Still Hinder

As the months went on, the numbers kept climbing. I was told right away that the fraud exceeded 20 billion. That’s when the investigation into fraud being conducted by federal agents was just beginning. At first, California officials acknowledged fraudulent payments but downplayed their number and extent admitting to a few billion.

Then the numbers I kept being told grew. $30 billion. $45 billion. $60 billion. Eventually, the State of California confirmed at least $20 billion in fraud tied to EDD payments, but I was already guaranteed it was 3 times that, and, once it was all added up, likely more than $ 100 billion, just in California alone.

So based on my sources and reporting, source estimates, and broader pandemic fraud tracking, the real number was clearly far higher. Multiple sources I’ve spoken with over the years continue to put the likely total far above official figures—potentially exceeding $100 billion when accounting for known gaps, and even more when including related fraud tied to other California and even federal programs.

One financial crimes investigator told me, “We’ll never know the full number. There was too much volume, too little control, and too much that got out before anyone could track it, and the State of California has not made the investigation easy. They are cooperating very little.”

Warnings Were There

The most frustrating part of the story is that the red flags weren’t subtle; they were obvious.

Massive early spikes in claims. Massive duplicate filings. Significant out-of-state activity and filings. Payments tied to known inmates. Sources say concerns were raised internally and externally—sometimes repeatedly. But the response was ignored at California’s highest levels.

To be fair, officials were dealing with an unprecedented crisis. The pressure to deliver aid quickly was immense.

Still, as one source with firsthand knowledge of the fraud investigation told me,“Speed doesn’t mean you ignore basic safeguards. You don’t just hope for the best with taxpayer money.”

Once the scale of the fraud became undeniable, efforts ramped up. The blame was put on small businesses in California for “misusing PPP Loans”. Immediately, I got a call once that narrative hit the press. It was made very clear that it was being sold by the Newsom Administration and EDD, but it was nowhere near the truth. It was explained that, yes, while a few businesses took advantage, the majority, by far, did the right thing and passed along the PPP money to employees and landlords, as intended.

California officials later stated they blocked tens of billions of dollars in fraudulent attempts after strengthening controls, but by then, much of the damage was already done. They also would not cooperate with the men and women investigating the fraud “unless we used grand jury subpoenas.”

I also continue to get requests about recovery efforts. Sure, a million here and a million there, and a persecution or two makes some feel better, but true recovery? Limited at best. A significant portion of the stolen funds is likely gone for good—moved through accounts, converted, or transferred overseas beyond easy reach. Never, ever to be recovered. Even as federal investigators were being roadblocked by EDD and others in Sacramento, they were warning that the flow would continue, and very little was done to stop it. California lost likely 100 billion and will get very little, if any, back.

The Bigger Picture

This wasn’t just a California problem. Across the United States, pandemic relief programs were hit by fraud at historic levels. Federal watchdogs have since warned that hundreds of billions of dollars may have been lost nationwide. I am told that the number actually exceeds 1 trillion in nationwide fraud losses. California remains the most striking example—because of the scale, the early warning signs, and the systemic breakdown that followed.

There are still so many questions to be answered. Because this isn’t just about what happened. It’s about what happens next.

And the bottom line is that the pandemic demanded urgency. No question. But urgency without accountability created opportunity—on a massive scale. And criminals took it.

As one source told me not long ago: “This wasn’t just fraud. This was preventable.”

That may end up being the hardest truth of all.

“What do you mean it can’t run?” I asked firmly, sitting in a chair beside my bureau chief’s desk.

“You don’t have enough, and you’ll need at least three people on camera.”

“That makes zero sense. Not only is the story true—and now verified by other outlets—but I’ve got five sources, and I know them all. And we were the ones who broke it,” I shot back.

He grew more desperate—louder, more argumentative—as if his life depended on killing the story.

It was Monday, just a couple of hours before we were set to air part two.

At Fox, at least when I was there, the structure was layered. You had multiple bosses operating in three chains: news, politics, and international. News flowed through New York; political stories ran through Washington, D.C. There was overlap, but ultimately New York deferred to D.C. on anything political, including final script approval. That process alone could be tedious—waiting for producers in D.C. to comb through your script, making sure every word, angle, and implication passed muster. I loved working with them, and almost always it was a debate over whether to use “which” or “that”.

In general, though, with political stories, it was always more of a time battle. Adding extra layers led to more opinions, semantic debates, and delays. Add in controversial subject matter, and the DC Bureau Chief would often step in, creating yet another hurdle. All of it was meant to ensure accuracy—but it also meant friction at times and ultimately a time crunch come editing time.

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While in Sacramento, Chico, and Santa Rosa for 4 years in local news, I covered the Giants’ last game at Candlestick Park. Won an Emmy for covering opening day at the new park, then called Pac Bell. I got to see Sacramento open its new AAA baseball park and the return of professional baseball. Covered the Sacramento Kings in their heyday. Watched Derek Jeter toss a ball sideways to beat the A’s in one of the most iconic plays in recent MLB memory. I also stood on the sidelines and watched Steve Young on Monday Night Football, only to cover his retirement not long after. So yep, I did get my share of sports when they crossed over into news, or if someone needed me to fill in.

When I became a National/International news correspondent, the fortunate opportunities involving sports continued, but on a much larger level. World Series. SuperBowl. NBA Finals. Even motocross and the Baja 1000. There were conversations with John Wooden, Greg Maddox, and Wayne Gretzky. While a news correspondent covering wars, hurricanes, and tsunamis, if it was something big, sports-wise that crossed over into the news realm west of the Mississippi, I usually went.

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I thanked him, not realizing who he was referring to. Despite my wife being in Hollywood, I’m not a Hollywood guy, and I probably should be. While I’ve seen pretty much every Michael Bay movie, I didn’t realize he was talking about the director, and I said, “ Who’s Michael Bay? “ He kind of chuckled and said, “Oh, he’s a director. He’s done a couple of movies.”

“Which ones did I ask immediately?” Still not realizing who he was talking about.

The list is impressive, as you likely know, and I was invited over to Michael Bay‘s office in Santa Monica. He and his team had done some research and felt that I’d been the fairest and most in-depth on the Benghazi story, and also noted that I had gotten close with a number of people on the ground that night, and others connected in other ways. They were doing all their background work as they prepared the script and the shoot of the movie ‘13 Hours’.

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He knew me more than I knew him. Fox has thousands of guests, and he was one of thousands. He complimented my reporting and a couple of places I had been recently, then casually mentioned he'd seen one of my reports on Benghazi and asked if I’d be interested in talking with his friend, who had been at the compound the night of the attack.

“I’d walk across the Atlantic to meet him,” I said.

“Well, I can set it up. I am good friends with one of the survivors’ fathers. I will make the connection.”

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“What does that mean?”

“They’re gonna give something to you that’s classified and try to get you in trouble. That’s how they do things,” he said.

“But as a journalist, I am protected.”

“Kinda. But they’ll try to ruin your credibility and/or try to prosecute you under the Espionage Act.

“As for me, I’m not worried about them hurting me physically, I just know they like to get people in trouble that aren’t doing what they want them to do, and that means dumping something on their computer or leaking documents you’re not supposed to see and I don’t want them to do that to you,” the voice on the line said.

And with that, my trusted source had me prepared for a shadow figure with a tip that I couldn’t trust. This interaction explains the entire time I spent covering the Benghazi story. The story started with a phone call, and now it continued with a warning by phone. At first, I doubted. I mean, is this a Michael Crichton book? What the heck? Then I reminded myself, and this contact is one of my most trusted.

My connection to the Benghazi story began after I completed a report in San Pedro, California, with the Coast Guard. I was on my way home in typical bumper-to-bumper afternoon LA traffic, and I heard about the Benghazi attack on the radio and the Administration’s story that it was caused by a video.

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About the same time, our security for the first few days consisted of two off-duty Texas police officers. They were nice enough guys, but you could tell they hadn’t spent much time overseas, let alone in a situation like this. So one late afternoon, they decided to have a meeting on the rooftop of the airport to discuss security and a plan for the next couple of days, since we clearly couldn’t continue living on a tarmac.

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It was a quick glance and a short comment coming from someone who looked like they just scraped their way out of a 100-year-old chimney that had never been cleaned. What appeared as caked black soot in actuality was 5 hard days living on a tarmac with massive cargo jets blowing gusts 24 hours in your face. Gusts of dust and soot and exhaust mixed with sheer exhaustion. It caked every inch of our bodies, our faces, every bit of our gear. There was no escaping it.

In actuality, we spent five full days at least, maybe six, lying on a tarmac. I actually lost count. The breathing exhaust and pollution from the nonstop jets and planes coming to land in Haiti…I’d become numb to the taste of anything. With the burnt rubber film sitting in my mouth and the sound of engines in my ear, constant 24 hours a day and night. The senses were clogged and overwhelmed, not to mention the pure devastation caused by the massive earthquake. We were enveloped by dust caking everyone, anything, and everything, and sound that drowned out any simplicity or normalcy.

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His scowl is clear, and he scans my crew and the soldiers around us, trying to make eye contact and get us to avert our gaze. It’s truly a childish attempt, but at the same time, a vivid reminder that the separation between North and South here on the Korean Peninsula runs deep, rooted in hate sold in the North. Here, the separation is literally a curb, separating the same people from very different ways of life.

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In a cold, dark San Quentin cement box theater, I saw the deep breaths of nervousness, the breaths of annoyance when an IV couldn’t be inserted easily ... and the last quick breaths of air as a man’s chest went still. This man wasn’t a friend, a family member, or even an acquaintance. This man was convicted of brutally murdering four innocent people and later bragging about how he watched their last breaths. On this night, I saw his, and all I could think was sadness. Families with lost loves. Those who are against the death penalty clearly would not be happy with this night, and for those who are in favor, it’s clinical and not the painful end you might desire.

It started with a phone call a few weeks before the set date of death for Stanley “Tookie” Williams on December 13, 2005. On the other end, a contact with then California Governor Schwarzenegger’s office. I had covered the entire California governor’s recall a couple of years earlier and had gone on a motorcycle ride with him for a story, and they felt that, since I was fair, I should be included on a list of possible witnesses.

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“You are?”

“Look at the TV.”

It was late in the evening, after a fundraiser at the Beverly Hilton in Los Angeles. My wife Tamera and I had joined some friends for a nightcap at the bar after the event when I glanced to my left, and I saw a flash on the screen above the bar. It was about 11:45 PM, or it seemed that late, when I saw a video of a wall of water.

Tearing from the ocean across the land, the massive wave of water swept everything in its path. Buildings tumbled like blocks, and cars were tossed like toys in a bathtub. I took a couple of steps closer to watch that first video coming from Japan, since the bar TV’s sound was off. Few people paid attention. The TV was an afterthought.

Across the bottom of the screen, the words…earthquake…tsunami…and Japan. The warning quickly stretched across the Pacific to the shores of California, Oregon, and Washington. I turned back to Tamera and said, “Are you OK if I go to Japan? I’ll likely have to leave asap.”

No sooner had she replied yes, my phone rang. Sure enough, I was on my way.

“Are you available?”

“Yep”

“We are going to book you the first flight we find. Barnes and a producer are going with you.”

“On my way. I’ll be home and ready to go in an hour.”

Like every breaking news story, we raced back to the house; I packed a bag and was on my way to LAX (Los Angeles International Airport) as soon as I could. The first flight out was very early in the morning, and ultimately, we were the only ones to take off for Tokyo from the United States. Later, we’d learn the reason we were the only plane to take off and eventually land in Japan was that the entire crew and the captain were based in Tokyo at JAL, and the Captain was a higher-up that JAL needed to help with the fleet and needed him home. All other flights from the U.S. to Japan had been grounded, but ours.

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