Employment Development Department Fraud Deepens

State investigators have so far identified $400 million paid on fraudulent unemployment claims filed under the names of California inmates, including at least 133 on death row, according to state officials on Tuesday. The new total is nearly triple the $140 million disclosed just last week.

In a letter to several district attorneys on Tuesday, Gov. Gavin Newsom said he was “deeply alarmed” by the problem. He blamed the fraud in part on the decision by Congress to expand unemployment benefits through the new Pandemic Unemployment Assistance program, which allowed for the self-certification of applicants for eligibility. The vast majority of fraudulent claims in the prisons involve the new Pandemic Unemployment Assistance program

“While this helped many individuals in need during the pandemic, bad actors took advantage of the crisis to abuse the system,” wrote Newsom. 

Benefits claims were submitted in the names of 31,000 inmates, of which 20,800 were paid. Debit cards issued by California’s Employment Development Department have since been frozen and $80 million in potential payments have been blocked.

It remains unknown how many claims were filed from prison or how many were filed by fraudsters taking the identity of inmates. EDD officials have claimed no inside involvement.

Newsom has appointed a task force chaired by Mark Ghilarducci, the director of Cal OES, and Tom Osborne, the deputy director of homeland security at Cal OES. However, cross-matching personal data from claims to the list of inmates had been difficult for the task force, as the personal information of inmates is confidential and difficult to legally get a hold of.