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January 20, 2021

DA’s office cracks down on EDD fraud

Jail inmates accused of scamming for unemployment benefits

Santa Clara County prosecutors are cracking down on people—and particularly inmates—who’ve scammed taxpayers out of a fortune in ill-gotten unemployment benefits.

Over the past two months, officials have identified tens of thousands of incarcerates throughout the state—including serial killer Cary Stayner—who managed to bilk hundreds of millions of dollars in payments from the California Employment Development Department (EDD).

In the South Bay, authorities say, it’s being perpetrated by organized rings involving people locked up in local jails.

The DA’s office cites a case in which just one inmate stole $12 million from the EDD.

Though no charges have been filed against the suspect, Santa Clara County District Attorney Jeff Rosen—like his peers throughout the state—said he’s assembled a team to tackle the problem and expects charges to be filed soon.

Benefits fraud is punishable by up to three years in state prison and fines of $20,000.

Inmates are legally barred from receiving EDD benefits. But authorities say they’re getting around that by working with co-conspirators who use the inmate’s identifying information to submit EDD applications.

To prevent the EDD from finding out that the applicant is incarcerated, the DA says the accomplices receive the payments and then transfer them back to inmates.

“To those who have abused the system during this pandemic: you will be caught and pay the price from stealing from the pockets of the needy,” Rosen said in an announcement about the enforcement effort. “Fraudulent unemployment claims deny benefits to those who are legally entitled to receive them and who truly are in need.”

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