Federal Warehouse Stores Luxury Cars and Memorabilia Seized in Major Fraud Cases

A secret federal law enforcement warehouse in Southern California holds dozens of Ferraris, Lamborghinis, Mickey Mantle rookie cards and game-worn Kobe Bryant sneakers seized in fraud cases, CBS News reported. Government estimates place annual losses to fraud schemes at a minimum of $500 billion, while consultants tracking fraudulently obtained funds place the figure above $1 trillion.

The Trump administration has launched a crackdown on individuals cheating federal programs including Medicare, food assistance and hospice care.

Bill Essayli, the top federal prosecutor in Los Angeles, toured an eight-bedroom, ten-bathroom compound on an isolated Orange County hilltop that served as the former home of Paul Randall. Randall was convicted of diverting more than $270 million in taxpayer funds in one of the largest California Medicaid fraud schemes in state history.

Randall pleaded guilty in April to wire fraud and faces up to 30 years in prison when sentenced this summer.

Essayli said Randall was out on bond awaiting sentencing on another federal fraud charge, one of six prior fraud convictions, when he began the latest scheme. "It should offend every American taxpayer that these people are taking advantage of the system," Essayli said.

"Obviously there's a breakdown in the criminal justice system if this guy was able to have six convictions and never did any real prison time," Essayli said.

Haywood Talcove, CEO of LexisNexis Risk Solutions, Government, projects that $1 trillion is lost to fraud each year and believes about 70 percent of that amount ends up with transnational criminal gangs. "It goes to Russia, it goes to China, it goes to Nigeria, it goes to Romania," Talcove said. Essayli said federal law enforcement is working on ways to better find and recover the stolen funds.

"That is why it is so important that the money never goes out in the first place; that's why it's important that we have systems in place to detect and prevent fraud," Essayli said.