SAN DIEGO — While countless Californians are out of work because of the coronavirus pandemic and have struggled to get their unemployment benefits, it turns out that tens of thousands of inmates have managed to get paid.
A team of California prosecutors has uncovered an unprecedented fraud scheme targeting the state's Employment Development Department, or EDD.
Prosecutors said that more than 35,000 fraudulent claims were filed from California prisons and jails between March and August, with at least 20,000 of them paid out In what could be the largest fraud scheme victimizing California tax payers in the state's history.
"Hundreds of millions of dollars that may well amount to upwards of a billion dollars have already been paid out in their names," said Sacramento County District Attorney Anne Marie Schubert.
The names of those who allegedly benefited from this scheme include infamous inmates like San Diegan Scott Peterson.
Prosecutors said that this EDD fraud has been occurring in state and federal prisons as well as county-level jails throughout California.
"People would apply from the jail using the Internet, which is available to them in our jail," said San Mateo County District Attorney Stephen Wagstaffe.
In some cases, inmates had assistance from accomplices on the outside, according to authorities, while in other cases, blatantly bogus names and social security numbers were used on successful applications.
"Fake names like John Doe or John Adams, or in one case, somebody had the audacity to put their name as 'Poopy Britches'," Shubert said.
Prosecutors also said that in some instances, the identities of inmates may have been stolen to carry out these schemes.
"That doesn't take away from the fact that this money was stolen from the coffers of the California state government," Shubert added,
It was stolen from the government as well as from California's taxpayers, thousands of whom rely on those EDD funds to make ends meet during the COVID-19 pandemic.
"Basically they cannot provide for their own sustenance for housing, food, because EDD is so backed up and seeing these people able to go in and take money and shove those people further down the line - that's pretty egregious conduct," Wagstaffe said.
In response, the Employment Development Department said it now has safeguards in place, including an identity verification system which it has been using since October.
"The reality is there is no system in place in California to cross check prison data," Shubert said. "It's just like wildfire."
Late Tuesday, Governor Gavin Newsom announced a task force to tackle this problem, saying that "we need to do more."