UPDATED 10:25 AM PT – Tuesday, January 26, 2021
Federal investigators are uncovering extraordinary amounts of unemployment fraud in the state of California.
California Labor Secretary Julie Su said out of the $114 billion the state has paid out so far during the pandemic, approximately 10 percent or around $11.4 billion has been confirmed as fraudulent. On top of that, another $20 billion is being considered suspicious.
Su said at the beginning of the pandemic, the state did not have sufficient security measures in place to prevent national and international crime organizations from stealing billions in state funds. These malicious actors were reportedly able to take advantage of the system due to overly broad and loose eligibility requirements, which made the state’s pandemic assistance fund an easy target.
Earlier this month, state officials temporarily halted benefits for more than 1.4 million Californians in an attempt to verify the identity of thousands deemed suspicious. In that time, state authorities have uncovered completely fabricated individuals, fake businesses, federal funds going to criminals in prison as well as funds going to individuals in countries like Russia and Nigeria.
“There is a human need for this money, a real human need,” stated Todd Spitzer, Orange County District Attorney. “And instead, this money went to six state prisoners, including two convicted murderers.”
Some California residents have found themselves the victims of fraud, left with no money and seemingly no one to reach out to due to how convoluted the state’s unemployment system is.
EDD provides updates on unemployment benefit fraud and fraud prevention efforts. EDD managing record amount of unemployment benefit claims and payments.
— EDD (@CA_EDD) January 26, 2021
The inability of the state’s government to prevent such widespread fraud has caused many local officials and residents to become furious with Democrat Gov. Gavin Newsom’s administration.
Officials have stated that investigations into fraudulent unemployment claims are currently ongoing.