California prosecutors Tuesday blasted the state’s Employment Development Department as a dysfunctional, often unresponsive agency that was unable to help much while inmates filed hundreds of millions of dollars in fraudulent unemployment claims.
The district attorneys described an agency where people who understood its system — such as prisoners and their allies — could easily file and receive jobless claims, while people out of work struggled to get their badly needed unemployment money.
“The EDD department is so dysfunctional. There has been a backlog, there continues to be a backlog of many, many thousands of people because of the pandemic, because of the lockdowns,” said Vern Pierson, El Dorado County district attorney.
While inmates and their allies were able to complete forms that provided millions of dollars in what appear to be fraudulent claims, people who lost their jobs have been “unable to get money because they don’t know the system the way the inmates do,” he said.
Pierson said EDD has told him it has 17 investigators statewide to look into fraud.
Sacramento County District Attorney Anne Marie Schubert agreed. She said cooperation from the agency has been “slow and nonexistent.”
“We’ve made a number of efforts to reach out to top level management and haven’t really had any response from that,” she said.
One fairly simple way to detect inmate-related fraud would be to adopt the sort of prevention system that 35 other states have implemented, she said.
“There is no cross-matching between incarceration data and EDD on a routine basis that is being done in 35 states,” Schubert said. “If we have that spigot turned off, we can (stop this). It is time to turn that off.”
Gov. Gavin Newsom said in a statement Tuesday that when his office saw evidence of prison fraud, it told EDD to “review its practices and to take immediate actions to prevent fraud and to hold people accountable when fraud is not prevented.” State and federal agencies did work to match Social Security numbers, and Newsom has directed the Office of Emergency Services to have a task force to coordinate state efforts and support the prosecutors’ investigations.
Prosecutors said the inmate claims are largely related to the $600 a week extra benefit the federal government authorized from late March through late August. It boosted the maximum California weekly benefit from $450 to $1,050.
Congressional Republicans refused to extend the benefit, saying it was subject to widespread abuse because people could earn more not working than on their job. There’s little talk of reviving it.
Workers have deluged EDD for months seeking help. Because Congress created different unemployment programs and rules to help people cope with the downturn, people have told The Sacramento Bee they need guidance — and often had trouble getting anyone to help.
Since the coronavirus pandemic sent the economy reeling in March, EDD has struggled to keep up with claims. Its backlog was around 1.1 million claims this summer when Newsom created a strike force to help make the process more efficient, and the backlog has dropped since then.
Fraud allegations have continued to plague the system.
In September, EDD said its investigators were working with local, state and federal partners “in exposing fraudulent schemes at the core of these multiple claims, developing methods to stop and prevent such claims from being paid, and prosecuting the unscrupulous offenders to the fullest extent of the law,” the agency explained.
Last week, the state auditor warned that EDD’s policy of including full Social Security numbers on many mailings risks exposing identities of state residents.
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