Federal prosecutors also allege that Williamson improperly obtained Paycheck Protection Program (PPP) loans through one of her business entities during the COVID-19 pandemic.
According to the indictment, Williamson came under civil investigation in early 2024 after one of her businesses received a subpoena related to PPP loan activity.
Prosecutors allege that, following receipt of the subpoena, Williamson and a business partner attempted to conceal financial irregularities by creating fake and backdated contracts intended to make the transactions appear legitimate.
Authorities characterize these actions as obstruction of justice, alleging they were designed to mislead investigators and interfere with the federal inquiry.
Alleged Tax Fraud and Personal Spending
In addition to campaign finance and bank fraud allegations, prosecutors accuse Williamson of submitting false federal tax returns that claimed more than $1 million in fraudulent business deductions.
According to investigators, Williamson allegedly masked personal expenses as legitimate business costs. The indictment states that the disguised expenditures included:
Private jet travel
Luxury hotel accommodations
High-end designer handbags
IRS Criminal Investigation agents allege these deductions were knowingly false and substantially reduced Williamson’s reported tax liability over multiple years.
Statements from Federal Authorities
FBI Sacramento Special Agent in Charge Sid Patel said the case reflects the culmination of an intensive, multiyear investigation.
“This case is the result of three years of relentless investigative work,” Patel said in a statement.
“The FBI will remain vigilant in its efforts to uncover fraud and corruption, ensuring our government systems are held to the highest standards.”
IRS Criminal Investigation Special Agent in Charge Linda Nguyen echoed those sentiments, emphasizing the agency’s focus on cases involving public corruption and tax fraud.
“Disguising personal luxuries as business expenses undermines the integrity of the tax system,” Nguyen said.
Legal Experts Weigh In
Legal analysts say the breadth of the charges suggests prosecutors believe they can demonstrate a sustained pattern of intent rather than isolated mistakes.
“When you see conspiracy charges layered with bank fraud, wire fraud, tax fraud, and obstruction, it usually indicates prosecutors believe they can show deliberate conduct over time,” said one former federal prosecutor familiar with white-collar cases.
If convicted on all counts, Williamson could face decades in federal prison and hundreds of thousands of dollars in fines, although experts note that sentencing guidelines typically result in penalties well below the statutory maximums, depending on loss amounts, prior criminal history, and cooperation.
Political Fallout and Broader Context
The charges come at a politically sensitive moment in California, where several high-profile Democratic officials have recently faced increased scrutiny over ethics, campaign practices, and the handling of public funds.
While there is no allegation that Governor Newsom was aware of or involved in Williamson’s alleged conduct, the case has drawn attention because of her proximity to the governor and her influential role within his administration.
Newsom’s office has not commented publicly on the charges as of Wednesday, and federal prosecutors emphasized that the case is focused solely on Williamson and her alleged associates.
