California prosecutors are raising concerns over the state possibly having sent over $1 billion in unemployment benefits to people living out of state, including some outside the United States.
District attorneys from nine counties in the state said they’ve received “unverified information” that the California Employment Development Department had distributed at least $1 billion worth of benefits to out-of-state claimants based off fraudulent claims, the Los Angeles Times reported.
“We are deeply concerned that the fraud will continue to grow exponentially,” the district attorneys wrote to Gov. Gavin Newsom, asking him to increase resources to investigate fraud.
The request came shortly after it was revealed that the state had sent over $400,000 worth of unemployment benefits to inmates on death row who had claims filed in their name, including high-profile convicted murderer Scott Peterson. An additional $140 million was sent to other inmates throughout several prisons in California.
Preliminary federal findings suggest “billions of dollars were sent out of the state and out of the country by EDD,” according to McGregor Scott, a U.S. attorney for the Eastern District of California, whose office has been investigating the prison fraud for months.
Riverside County District Attorney Mike Hestrin said his office had identified 1,500 inmates who had received benefits, including some that went out of state.
“We are still working through this, but it’s massive,” Hestrin said.
Another law enforcement official, who spoke on the condition of anonymity and is involved in a statewide investigation on the fraud, said the agency had sent money to addresses listed around the world. Most of the money went to addresses listed in Central America, but another claim had gone to Australia.
Prosecutors said one of the most prominent barriers in getting to the bottom of the fraud is obtaining the personal information of inmates, including Social Security numbers.
Because the EDD isn’t a law enforcement agency, the state prison agency can’t legally provide Social Security numbers to them, though the EDD can enter into a reciprocity agreement with other law enforcement agencies to help provide that information.
Newsom said the state tightened security on claims, including installing a system in September that requires new unemployment benefit claimants to verify their identity with documentation.
“It has been very, very effective at addressing some of the fraud issues in the front door,” the governor said.
Newsom encouraged the EDD to increase scrutiny on claims, but not at the expense of delaying payments to unemployed Californians grappling with the economic effects of the coronavirus pandemic.
“People want things in a timely manner, but they also want the veracity in terms of the distribution of those funds,” Newsom said.
