California sent coronavirus relief money to inmates living in multiple states

(The Center Square) – More than $42 million in unemployment and relief money paid by the California Employment Development Department (EDD) went to out-of-state prison and jail inmates, a recent report found.

In total, $4 billion in reportedly fraudulent coronavirus relief funds were paid out, according to an analysis conducted by Sacramento-based Pondera Solutions, a subsidiary of Thomson Reuters.

The EDD said in a statement differentiating fraudulent from legitimate payments was difficult.

“The pervasiveness of scammers utilizing extensive, stolen personal identifying information can lead to difficulties in sorting through legitimate claimants from those who may have utilized some of their information for a fraudulent claim which is why we are taking further action to verify these claims in question,” the agency said in a statement.

The Pondera analysis reviewed inmate data from more than 2,000 facilities nationwide. It excluded data from some states, including Pennsylvania, Montana and North Dakota.

More than 2,000 of the high-risk claims identified by Pondera are inmates in Florida state prisons and county jails.

Inmates in approximately 33 of California’s 58 county jails are allegedly involved with filing the potentially fraudulent claims.

“Absurd fraud policies have made California’s EDD a target for prisoners nationwide. What a shameful waste of taxpayer dollars,” Assemblywoman Cottie Petrie-Norris, D-Laguna Beach, and chairwoman of the Assembly Committee on Accountability and Administrative Review, said in a statement.

Pondera Solutions researchers cross-referenced incarceration data with claims filed. They then identified high-risk matches of individuals whose incarceration could be reliably confirmed, and also closely or exactly matched the personal data of the unemployment claimant.

Last year, EDD officials reported that they had identified $400 million paid in 21,000 unemployment benefit claims improperly filed in the names of California prison inmates. Gov. Gavin Newsom said he was “deeply alarmed” by this revelation.

On Dec. 30, he appointed Rita Saenz as EDD’s new director. Gov. Newsom said Saenz would help the EDD ensure claims were paid on a timely basis “while simultaneously stopping fraud in our systems and holding people who have committed fraud accountable.”

Prior to the Pondera report, last fall, district attorneys from Sacramento, El Dorado, Kern and San Mateo counties claimed that nearly $1 billion in fraudulent claims for unemployment assistance and coronavirus relief money had been paid to inmates in California prisons.

In addition to these reports, Bank of America, which issues EDD debit cards with benefits added to them, announced the findings of its initial investigation: $2 billion of fraudulent payments had been made using their debit cards.

Sacramento County District Attorney Anne Marie Schubert, who with other county DAs last fall sounded the alarm on inmate fraud, said she is “working aggressively and collaboratively” with the state and law enforcement to combat it.

Schubert’s office also filed an 18-count indictment against Walter Lee Dawson, who while on probation was arrested for having nine EDD debit cards issued in different names, illegally carrying a Glock-style pistol with no serial number, and possessing $58,000 in cash and nearly four pounds of marijuana. Later on, after inquiring with EDD investigators, they discovered that Dawson had allegedly fraudulently acquired $219,000 in EDD-paid benefits.

Of the ongoing fraud being committed against the EDD identified in the Pondera report, Riverside District Attorney Mike Hestrin said, “We need our state leaders to level with California taxpayers about how a fraud and theft of this magnitude could have happened.”

Fresno County District Attorney Lisa Smittcamp said the state agency had been “irresponsible” for not having an “audit mechanism in place prior to making payments.”

Within a week of being appointed, Saenz directed the EDD to halt unemployment payments that appeared to be “high risk” until they could be verified as legitimate.

According to the Pondera report, more than 1,660 California inmates who were identified as high risk have fraudulently received benefits.

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