In the latest revelation of possible criminal fraud involving unemployment benefits in California, an analysis found that more than $ 42 million in claims were made to prisoners and inmates from outside the state, giving more clarity to what officials now estimate could be $ 4 billion in fraud assistance funds for coronavirus.
A large number of Florida inmates, including a man sentenced to 20 years for second-degree murder, are among the thousands of out-of-state prisoners who allegedly received California’s pandemic unemployment benefits, according to a December analysis commissioned by the State Department of Employment development and reviewed by The Times.
The analysis compared data from individuals jailed across the country against nearly 10 million people on the state’s pandemic unemployment lists and found that EDD approved more than 6,000 applications, totaling more than $ 42 million, involving individuals who were likely to be jailed in another place when they were paid by California.
In all, the analysis found that there were more than 20,000 claims considered to be of high or moderate risk of having been paid to an incarcerated person, whether in California or in another state. If all of these claims were fraudulent, the estimated $ 42 million in payments to prisoners would jump to $ 96 million.
The disclosures come at a time when state officials are discovering that potentially fraudulent California aid claims could total about $ 4 billion – double previous estimates.
Bank of America officials recently informed state officials of the increase in the number, according to sources familiar with the talks and other government officials. They spoke on condition of anonymity because they are not allowed to discuss the ongoing investigation.
More than 2,000 of the high-risk claims identified in the EDD analysis are inmates from the Florida Department of Corrections or county prisons in that state, according to a summary analysis of the data dated December 18.
Along with the convicted murderer – identified in the report as 43-year-old Nakeva Thornton, who allegedly received $ 10,800 in payments and was convicted in 2012 – the report highlights another Florida inmate serving time for theft and breaching the rules of sex offenders who allegedly received $ 9,000 and is scheduled to launch in 2024.
The analysis identified inmates receiving California benefits in other states, including Nevada, Illinois and South Carolina. Nevada and Illinois prison officials did not immediately comment on the allegations, but South Carolina Department of Corrections spokeswoman Chrysti Shain , said his department “has not been notified by the California authorities or anyone that any of our inmates are involved in this.”
Officials at the district attorney’s offices in Clark County and Washoe County in Nevada said any allegations of inmate fraud would be handled by the Nevada attorney general’s office.
The report caused another wave of outrage in the California Legislature and among county district prosecutors, who will be tasked with investigating and prosecuting many of the cases.
“Absurd fraud policies have made California’s EDD a target for prisoners across the country. What a shameful waste of taxpayer dollars, ”said Congresswoman Cottie Petrie-Norris (D-Laguna Beach), chairman of the Assembly’s Accountability and Administrative Review Committee.
She said that fixing the agency needs to be the top priority for the newly appointed Director of EDD, Rita Saenz.
Sacramento County Dist. Atty. Anne Marie Schubert, who along with other county prosecutors in November set the alarm on inmate fraud, said on Tuesday that she remains concerned about internal inmate fraud and out-of-state claims, but has seen progress from the state employment agency in last weeks. She added that she is “working aggressively and collaboratively” with the state and law enforcement to combat this crime and help EDD “avoid it up front”.
This week, Schubert’s office filed an 18-count indictment against a trainee arrested with nine EDD debit cards issued under different names, along with a Glock pistol without a serial number, $ 58,000 in cash and nearly four pounds of marijuana. . A subsequent investigation with EDD investigators found that about $ 219,000 had allegedly been fraudulently acquired by the man, Walter Lee Dawson.
“We need our state leaders to report California taxpayers about how fraud and theft of this magnitude could have happened,” said Riverside Dist. Atty. Mike Hestrin, when presenting the contents of the EDD report. Fresno County Dist. Atty. Lisa Smittcamp added that it was “irresponsible” that the state agency did not have an “audit mechanism in place before making payments”.
The analysis also identified more than 1,660 California inmates at high risk of receiving benefits while incarcerated, including more than 700 people arrested in Orange County prison. In a California complaint, a Shasta County prison inmate, charged with murder and jailed since 2014, received $ 167 a week for 16 weeks starting in March, according to the report.
The analysis was conducted by Pondera Solutions, based in Sacramento, a subsidiary of business information provider Thomson Reuters specializing in fraud, waste and health and government abuse. Thomson Reuters bought the California company earlier this year.
The analysis used a database of lists of prisoners and jails from more than 2,000 establishments across the country. However, the database does not include all states, according to the report, missing data from places like Pennsylvania, Montana and North Dakota, among others. The report also lists potentially fraudulent claims in only 33 of California’s 58 county prisons. It is not clear whether county prison data for all counties has been included.
The incarceration data was then compared with the claims information. High-risk correspondences included those in which incarceration could be reliably confirmed, exactly matched the name and exactly matched the personal data of the unemployed person.
Pondera’s analysis was reviewed by The Times more than a month after EDD officials said they had identified $ 400 million paid on some 21,000 unemployment insurance claims wrongly registered on behalf of California inmates. Governor Gavin Newsom said at the time that he was “deeply alarmed” by reports of benefits paid to people behind bars.
The benefits paid in California include claims made on behalf of those sentenced to death.
EDD officials did not immediately respond to questions about the Pondera report, but have been struggling to stem the tide of fraud since Bank of America, which issues EDD debit cards containing benefits, said last month it found evidence of $ 2 billions in fraud. during an initial review.
There was no immediate response to a request for comment from Saenz, which Governor Gavin Newsom appointed on December 30 to take over as director of EDD after Sharon Hilliard announced his retirement.
In appointing Saenz, the governor said he was confident she would help the department pay damages in a timely manner, “while stopping fraud in our systems and holding people who have committed fraud to account.”
EDD officials said they have challenged the separation of legitimate claims from false ones.
“The spread of scammers using stolen and extensive personally identifiable information can lead to difficulties in classifying legitimate complainants from those who may have used some of their information for a fraudulent complaint, which is why we are taking additional steps to verify these complaints in question , ”, Wrote the agency in a statement.
EDD took the unusual step of announcing on Sunday that it was suspending payments on many claims already approved – those considered “high risk” – until they could be verified as legitimate.
EDD spokesman Aubrey Henry declined to say how many high-risk claims have been suspended, and said warnings will come out soon about how claimants can unfreeze their claims. The agency has decided to act now to avoid paying additional federal $ 300 pandemic compensation for fraudulent claims.
The announcement of suspended claims drew more than 700 responses, most of which were irritated, on the EDD Facebook page, many of whom say they have been prevented from obtaining benefits that they claim are rightfully theirs.
“So, good and honest people who are unemployed are now being penalized for a system error?” a man from Los Angeles wrote. “Our tax money is going to be wasted on these clowns!”
Among those notified that his claims have been suspended is Los Angeles’ Irene Flores, who said in an interview that he was a driver for Lyft before the pandemic.
Flores said he applied for unemployment for the first time in March and twice had to file documents to verify his identity, once during a process that delayed his payments by five months. Then, on New Year’s Eve, she received a notice from EDD stating that her claim was suspended again until her identity could be verified.
“It is worrying because there is no need for my account to be pending for the third time when I sent all the documents they asked for and they checked,” said Flores.
The suspension of unemployment insurance made her unable to pay her January rent and hampered her ability to buy groceries for herself and her children.
“It is a great difficulty,” said Flores.
Congressman David Chiu (D-San Francisco) said the word of benefits for out-of-state prisoners is especially difficult to accept, while thousands of unemployed Californians are still without financial aid.
“In the meantime, they send money to prisons outside the state,” said Chiu.