California may have paid up to $1 billion in fraudulent unemployment claims filed on behalf of prison and jail inmates in what prosecutors are calling “the most significant fraud on taxpayer funds in California history.”
The state paid more than 35,000 claims under state prisoners’ names, with one inmate collecting nearly $49,000, a group of district attorneys and a federal prosecutor said at a Tuesday press conference. California also paid more than $421,000 to 133 Death Row inmates — including Scott Peterson, a San Quentin prisoner convicted of killing his wife and unborn child. Some of the claimants used pseudonyms like “Poopy Britches” or “John Doe,” and most targeted federal benefits distributed by the state.
In a sharply worded letter, the district attorneys asked Gov. Gavin Newsom to get personally involved and immediately implement changes at the state unemployment department — including a system to cross-check prison and jail rosters against unemployment claimants. California is one of 15 states that doesn’t have such a system, according to the letter.
- Anne Marie Schubert, Sacramento County district attorney: “We are paying hundreds of millions of dollars in the name of serial killers, rapists and child molesters. We need to turn the spigot off.”
- Newsom: “I have directed the Office of Emergency Services to stand up a task force to coordinate state efforts and support investigations by local district attorneys.”
It’s just the latest task force Newsom has launched in response to persistent problems at the Employment Development Department, where 590,000 claims remain backlogged. A task force in September shut down EDD for two weeks in order to implement a tool to speed up processing times and mitigate fraud. But in October, the agency froze around 358,000 debit cards amid investigations into widespread fraud — and a state report released last week found EDD continues to leave millions at risk of identity fraud.
EDD’s director is retiring Dec. 31, leaving Newsom to appoint her successor at a critical moment for the agency and hundreds of thousands of Californians awaiting benefits.
CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.
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