California’s unemployment insurance agency, the Employment Development Department (EDD), has been a bastion of incompetence for years, if not decades, and its performance during the coronavirus pandemic has been beyond horrible. By mid-October, there were hundreds of thousands of claims that had been backlogged for months, and some claimants hadn’t received a single benefit payment since the beginning of the pandemic. The agency was forced to stop accepting new claims for two weeks while they attempted to get a handle on things, but even with that they don’t expect to get caught up until January.
Still, according to a group of county prosecutors who held a press conference on the issue Tuesday morning, hundreds of millions of dollars have been paid out to inmates in California’s jail and prison system – including notorious serial killers on death row – who submitted clearly fraudulent claims. (As backwards as California is, we don’t pay inmates unemployment insurance. Yet.)
And when EDD was approached by at least one District Attorney over the summer with evidence that a massive fraud was being perpetrated, they essentially told him to pound sand and they were going to continue to pay the claims until charges were brought against the inmates for fraud.
San Mateo County District Attorney Stephen Wagstaffe said that in July Jordan Boyd, an investigator from his office, stumbled upon a massive EDD fraud scheme occurring in the San Mateo County jail (and in other county jails) while monitoring jail phone calls in another case. Thankfully Boyd decided to investigate further instead of simply saying, “Meh, that’s not the case I’m working on.”
Wagstaffe and his investigator did the logical thing. After the investigator interviewed inmates whose calls had been monitored to determine a universe of inmates who were involved in the scam, then took all of the inmates names that were mentioned in his jail and cross-referenced it with the EDD. In all, they determined that there were 22 inmates involved just in the San Mateo County Jail.
One of those 22 inmates was a person facing murder charges who was “simply awaiting his transportation to prison to serve his 95 years to life in prison” and another who transferred to Corcoran State Prison from San Mateo County shared the scam details with inmates there, who have nothing but time on their hands and access to the internet.
Wagstaffe continued the investigation but was forced to file charges on an expedited basis because:
We learned through EDD…that they could not cut these people off. The fraud was ongoing as we were investigating, and what we were told was that under the regulations that they were all bound by at EDD, they could not cut the people off until we filed the charges. Not simply that we told them hey, you know what, we’ve got the case…we’ve established it and now we just have to process it.
That in itself meant there was additional dollars paid out.
Six of them have been convicted and have been sentenced.
Sacramento County District Attorney Anne Marie Schubert said that unlike 35 other states, California’s EDD does not check new claims against a county, state, and federal inmate records to determine if the claimant is ineligible due to incarceration. But, during the first week of November the US Attorney’s office shared a database containing the entire California Department of Corrections & Rehabilitation inmate population with the county DA’s who are looking into the massive fraud and compared it to EDD claims that had been filed between March and August of 2020. That review showed that the fraud “exists in every CDCR prison. It encompasses every type of inmate…death row inmates…rapists and molesters, human traffickers….” Schubert said:
To give you a sense of the magnitude of just what we know of this snapshot between March and August, there has been 35,000 claims filed in the name of California state prison inmates. Of those 35,000, as of August 20,000 have been paid. The highest number of claims paid on behalf of a single inmate is 16 claims, and the total amount paid out for that snapshot is over $140 million.
There was money sent actually to prison, paid and sent to inmates in prison.
Claims were made to people using their own names and Social Security numbers and to people committing identity theft. Fake names and Social Security numbers were also used, including a claim paid to someone supposedly named “Poopy Britches.” Really? That didn’t stand out to anyone?
Out of the 700 or so inmates on California’s death row, 133 death row inmates have claims in their names, and some of them filed multiple claims since there are a total of 158 claims from inmates on California’s death row. One death row inmate received $20,000, and between March and August the total amount paid to death row inmates was $420,000.
“Who’s on that list? A lot of notorious people have claims filed in their names. Cary Stayner, well-known serial killer. Wayne Ford, convicted and put on death row out of San Bernardino. Some may remember, he’s the individual that walked into the sheriff’s station in Humboldt County with a severed breast in his pocket and confessed to dismembering and murdering four women.
“Isauro Aguirre. He’s the individual who tortured and killed Gabriel Fernandez in Los Angeles County. Wesley Shermantine, well-known serial killer up here. Royal Clark from Fresno, another well-known serial killer, killed two young women. Rex Krebs from San Luis Obispo.
“In San Diego County a claim was filed under the name of Susan Eubanks. She murdered her four children.”
During a question-and-answer period after the press conference, prosecutors confirmed that death row inmate Scott Peterson, convicted of killing his pregnant wife, Laci, and their son, and dumping their bodies into the San Francisco Bay, had an EDD claim filed in his name and that it had been paid, but that they weren’t releasing the amount that had been paid on that individual claim.
The fraud isn’t limited to the state prison system; Schubert said the same type of fraud was happening at a large scale in county jails and that one county jail estimated that its inmates had received $10 million dollars in fraudulent EDD claims. One county jail. That is staggering.
Schubert estimated that EDD allowed hundreds of millions of dollars in fraudulent claims to be paid, quite literally stealing food out of the mouths of hard-working Californians who aren’t able to work. “Quite frankly, the inmates are mocking us,” she said.
El Dorado County District Attorney Vern Pierson shared his personal opinion that the dysfunctionality of the EDD and lack of responsibility shown by those in management has allowed this fraud to flourish.
The dysfunctionality within our state EDD department to deal with this – I will just tell you, from the line level investigators – I’m told there are only 17 statewide that can aid in these types of investigations. At that line level they’ve been very cooperative and very assistant with us in terms of seeing that these cases are investigated.
However, as you go up the chain of command, there’s been a series of resignations, retirements, and there’s really just a lack of responsibility on that side.
That hardened serial killers who epitomize the word “evil” are able to have three meals a day, a roof over their head, and fraudulently receive thousands of dollars a month while more than 100,000 Californians have been waiting for months for promised benefits and are forced to seek out food banks to have the ingredients for a Thanksgiving meal is beyond despicable and completely unacceptable. Monsters who rape, murder, and decapitate are allowed to continue to receive benefits even when law enforcement tells EDD that those benefits are being fraudulently paid because the law forbids paying inmates unemployment insurance, but hardworking, law-abiding Californians are having their EDD benefits frozen for weeks at a time, without notice, so the department can “investigate fraud.”
Hell, even a former EDD director sounded the fraud alarm nearly three months ago.
No one listened.
That’s par for the course for the Newsom administration, though. No one takes responsibility for anything, and no one holds anyone else accountable.
EDD leadership cannot simply shrug their shoulders and say, “Oh no, there was fraud, we had no idea this would happen!” because there have been multiple audits and investigative reports pointing out the massive inadequacies in the current system. The department is still sending out snail mail letters with recipients’ full Social Security numbers on them, even though they were ordered 18 months ago to stop. And then they wonder why fraud is so rampant.