Please ensure Javascript is enabled for purposes of website accessibility
California: Criminal Rings Loot Billions in Jobless Funds
gvw_ap_news
By Associated Press
Published 4 years ago on
January 26, 2021

Share

LOS ANGELES — Sophisticated hackers, identity thieves and overseas criminal rings stole over $11 billion in unemployment benefits from California last year, but the extent of the fraud might grow far larger: billions more in payments are under investigation.

California Labor Secretary Julie Su told reporters in a conference call Monday that of the $114 billion the state has paid in unemployment claims, about 10% — or $11.4 billion — have been confirmed as fraudulent.

Nearly $20 billion more — another 17% — is considered suspicious, and a large part of that could be found to be fraud, she said.

“There is no sugarcoating the reality,” Su said. “California did not have sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.”

Nearly all of the fraudulent claims were made through the federally supported Pandemic Unemployment Assistance program. The program was approved by Congress to provide unemployment benefits to people during the coronavirus pandemic who are usually ineligible to receive them, such as independent contractors. But, officials say, its broad eligibility requirements made it an easy target of criminals, including from Nigeria and Russia.

While conceding the state was unprepared, Su also faulted the Trump administration for failing to provide the state with the guidance and support needed to foil sophisticated fraud rings. She said an array of safeguards put in place last year had blocked billions of dollars in potential fraud schemes.

Su described an agency struggling to keep up with a flood of new jobless claims as the pandemic shuttered businesses and sent unemployment rates soaring. And that reservoir of new money was also a lure for criminal enterprises.

Officials Noted the Fraud Problems Were Widespread in the U.S.

“It should be no surprise that EDD was overwhelmed, just like the rest of the nation’s unemployment agencies,” Su said. “As millions of Californians applied for help, international and national criminal rings were at work behind the scenes working relentlessly to steal unemployment benefits using sophisticated methods of identity theft.”

The state also has been trying to clear a persistent backlog of claims — more than 940,000 as of Jan. 20.

Officials noted the fraud problems were widespread in the U.S.

Washington state was among the first hit with fraudulent unemployment claims believed to be tied to a West African fraud ring using identities stolen in prior data breaches, such as the massive 2017 Equifax breach. More than 122,000 fraudulent claims made in the state siphoned $600 million.

Washington was able to recover $357 million as a result of the state’s collaboration with federal law enforcement and financial institutions across the country.

Prosecutors around the state have been targeting unemployment benefits fraud in recent months. On Monday, Orange County District Attorney Todd Spitzer announced charges against two business owners who opened up a storefront in Garden Grove, California, for the sole purpose of filing false unemployment claims. He also announced the prosecution of eight people, including six state prisoners, involved in two other unemployment fraud schemes.

Also Monday, House Speaker Nancy Pelosi and California Sens. Dianne Feinstein and Alex Padilla, all Democrats, urged President Joe Biden to create a federal task force to help states deter organized criminal fraud in jobless claims.

“California and many other states are experiencing fraud at a much greater rate than previously understood, perpetrated by international and interstate criminal organizations moving from state to state,” they wrote in a letter.

RELATED TOPICS:

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Yastrzemski and Chapman Homers Help Giants Rally Past the Brewers

DON'T MISS

Fresno City Council Finally Passes a Tough Smoke Shop Ordinance

DON'T MISS

Fresno Unified Trustee Wittrup Says District Had Stronger Candidates Than Misty Her

DON'T MISS

Trump Poised to Offer Saudi Arabia Over $100 Billion Arms Package, Sources Say

DON'T MISS

Lights, Camera, Board Vote: Fresno Unified’s Carefully Choreographed Production

DON'T MISS

US Farm Agency Withdraws Proposal Aimed at Lowering Salmonella Risks in Poultry

DON'T MISS

On Major Economic Decisions, Trump Blinks, and Then Blinks Again

DON'T MISS

Candi Is the Dandy to Add a Little Sweetness to Your Life

DON'T MISS

How Trump Tariffs Could Upend California Farms, Wine Businesses, and Ports

DON'T MISS

Tulare Man Sentenced to State Prison for DUI Crash That Injured Two Women

UP NEXT

How Trump Tariffs Could Upend California Farms, Wine Businesses, and Ports

UP NEXT

Survey: Californians Blame Utility Company Spending, Profits for High Electricity Rates

UP NEXT

Chicago Bears Great Steve McMichael Dies at 67 After Battle With ALS

UP NEXT

Long Wait Is Over for Cam Ward, Travis Hunter and Other Draft Prospects Joining the NFL

UP NEXT

Golden State’s Jimmy Butler Injured in Game 2 Loss, His Status for Game 3 Unknown

UP NEXT

Jalen Green Makes Eight 3s to Help Rockets Even Series With Warriors

UP NEXT

Newsom Seeks Help for Struggling Oil Refiners

UP NEXT

US Justice Department Directs Investigations Over Gender-Affirming Care

UP NEXT

US Justice Department Cancels Hundreds of Grants for Police, Crime Victims

UP NEXT

How Do High Schoolers Really Fare After Graduation? A New California Tool Lets You Know

Trump Poised to Offer Saudi Arabia Over $100 Billion Arms Package, Sources Say

6 hours ago

Lights, Camera, Board Vote: Fresno Unified’s Carefully Choreographed Production

7 hours ago

US Farm Agency Withdraws Proposal Aimed at Lowering Salmonella Risks in Poultry

7 hours ago

On Major Economic Decisions, Trump Blinks, and Then Blinks Again

7 hours ago

Candi Is the Dandy to Add a Little Sweetness to Your Life

8 hours ago

How Trump Tariffs Could Upend California Farms, Wine Businesses, and Ports

8 hours ago

Tulare Man Sentenced to State Prison for DUI Crash That Injured Two Women

9 hours ago

Judge Partly Blocks Trump Order Seeking to Overhaul US Elections

9 hours ago

Two From Search Group That Uncovered Mexico’s ‘Ranch of Horror’ Killed

10 hours ago

US Warns States They Could Lose Transportation Funding Over Immigration, DEI Policies

10 hours ago

Yastrzemski and Chapman Homers Help Giants Rally Past the Brewers

SAN FRANCISCO — Mike Yastrzemski and Matt Chapman homered as the San Francisco Giants rallied to beat the Milwaukee Brewers 6-5 on Thursday ...

4 hours ago

4 hours ago

Yastrzemski and Chapman Homers Help Giants Rally Past the Brewers

4 hours ago

Fresno City Council Finally Passes a Tough Smoke Shop Ordinance

5 hours ago

Fresno Unified Trustee Wittrup Says District Had Stronger Candidates Than Misty Her

President Donald Trump delivers remarks during an 'Unleashing American Energy' event at the Department of Energy in Washington, U.S., June 29, 2017. (REUTERS File)
6 hours ago

Trump Poised to Offer Saudi Arabia Over $100 Billion Arms Package, Sources Say

7 hours ago

Lights, Camera, Board Vote: Fresno Unified’s Carefully Choreographed Production

Chickens sit at a poultry farm. March 12, 2025. (REUTERS/Diego Vara/File Photo)
7 hours ago

US Farm Agency Withdraws Proposal Aimed at Lowering Salmonella Risks in Poultry

7 hours ago

On Major Economic Decisions, Trump Blinks, and Then Blinks Again

Candi, GV Wire's Adoptable Cat of the Week
8 hours ago

Candi Is the Dandy to Add a Little Sweetness to Your Life

Help continue the work that gets you the news that matters most.

Search

Send this to a friend