California has opened hundreds of investigations into unemployment fraud involving prisoners

SACRAMENTO —  A California task force formed five months ago to investigate fraudulent unemployment claims involving incarcerated people said Monday that there have so far been 68 arrests and it has opened 1,641 other inquiries.

The report by the statewide task force comes after local prosecutors warned that potentially tens of thousands of fraudulent claims have been filed involving people in prison and jail that could total $2 billion.

Gov. Gavin Newsom announced in November that he was asking state officials to form a task force with federal prosecutors and county district attorneys who had already begun investigating improper claims filed in the names of people behind bars, including those on death row.

The Newsom administration released an update on its investigations Monday shortly after Secretary of State Shirley N. Weber reported there were sufficient signatures to qualify for the ballot an effort to recall the governor.

“This coordinated and targeted partnership between government and law enforcement has been very successful so far in detecting and disrupting COVID-19-related fraud schemes,” Mark Ghilarducci, director of the Governor’s Office of Emergency Services, said in a statement.

Some state lawmakers remain critical of Newsom, saying the state did not act fast enough to stop fraud in prisons.

“His response to the outrageous amount of fraud was so underwhelming, the same D.A.s he’s now wisely working with actually started cracking down on [Employment Development Department] fraud without him,” Assemblyman Jim Patterson (R-Fresno) said Monday.

Before Newsom formed the task force, nine district attorneys and a federal prosecutor said in November they saw indications that potentially tens of thousands of fraudulent claims were filed in the names of people in prison or jail who are ineligible to receive unemployment benefits.

Those whose names were used in claims include San Quentin inmate Scott Peterson, who was convicted of killing his wife and unborn son but denied seeking unemployment benefits.

Investigators said some claims were filed in the names of those in prison without their knowledge, but several cases have emerged in which incarcerated people coordinated with friends and family to file fraudulent claims.

Until late last year, the state prison agency refused to share the personal information of prisoners, including Social Security numbers, with the state Employment Development Department to allow the EDD to match it with unemployment claims, but attorneys later determined that the information could be shared.

On Monday, the state Senate Labor Committee approved a bill by Sen. Shannon Grove (R-Bakersfield) that requires the prison agency to share information with the EDD.

State officials said law enforcement in regional task forces have served 382 search warrants, 94 charges have been filed, and 68 people have been arrested outside the prison system.

In Southern California, law enforcement agencies said they have launched 68 investigations since August that involved 100 search warrants and 23 people being charged, with nine arrested outside prison.

Sacramento County Dist. Atty. Ann Marie Schubert said Monday that the amount paid to criminals may total $20 billion, although the EDD has said that it has identified about $11 billion in fraud, which includes people not in prison.

“The magnitude of EDD fraud in California is astronomical,” Schubert said in a statement released by the Newsom administration. “While there is much work to be done, significant progress has been made not only to identify those committing these crimes but also to prevent further EDD fraud.”