Between March and August, local prison inmates received more than $6 million in unemployment benefits — just a small part of what could be ‘the most significant fraud on taxpayer funds in California history’

Inmates in Lassen County and across California receiving unemployment benefits — are you kidding me? Sadly, the answer to that question is no.

And if that doesn’t push your blood pressure a bit higher, consider this tidbit of information of special interest to Lassen County residents — convicted murderess Joanna McElrath and convicted child rapist Arik Baker — “both serving life sentences and have not worked for years are amongst those whose names have been cross referenced with open unemployment claims,” according to Lassen County District Attorney Susan Melyssah Rios.

As hard as it might be to believe, Joanna McElrath, convicted of killing her husband, Susanville Police Officer Robert McElrath in an act of domestic violence in January 2011, is allegedly receiving unemployment benefits during the COVID-19 pandemic while behind bars. File photos

OK. Easy to turn the money off now that we know inmates are collecting money to which they are not entitled. Ah, but sadly the boondoggle doesn’t end there.

According to Rios, “Of more concern is the response from EDD that they cannot turn off the benefits even with the allegation of fraud.  They need a conviction to substantiate the fraud before they can stop paying the claims, citing due process violations if benefits are shut off without a hearing.  In the meantime, they continue to pay out the benefits and will continue to process the fraudulent applications for inmates who haven’t had a job in years and continue to delay or deny the legitimate claimants who have truly been affected by this pandemic.

In this light, investigations continue from one end of California to the other to try to find those responsible for a massive fraud against the state’s taxpayers — inmates behind bars collecting unemployment benefits during the COVID-19 pandemic.”

Rios, who also serves as an EDD Fraud Task Force Leader, joined eight other district attorneys from the California District Attorneys Association who wrote a Nov. 23 letter to California Governor Gavin Newsom outlining an unemployment insurance fraud involving “tens of thousands of local state and federal inmates and hundreds of millions of dollars.”

Convicted child rapist Arik Baker is also allegedly receiving unemployment benefits even though he’s serving a life sentence behind bars.

Rios and the other district attorneys, federal prosecutors and local state and federal law enforcement) have asked the governor to meet with them as they hoped to gain his “personal involvement in halting what appears to be the most significant fraud on taxpayer funds in California history.”

According to the letter, the state could already have paid out “nearly $1 billion” on the fraudulent claims,” and “the state attorney general, at this junction, has taken no interest into the investigation and prosecution of state inmates defrauding a state entity. The burden this has placed on resources at the at the county levels has been overwhelming and we are appreciative of US Attorney for the Eastern District, Greg Scott, in taking an active role into the investigation.  Thanks to subpoenas issued by the US Attorney’s Office (covering the time period March through August), we have been able to identify approximately 530 inmates at CCC and 925 inmates at HDSP whose names have been used to apply for and receive unemployment benefits. The majority of these monies are being sent to addresses out of county, multiple claims to the same address. Not all of the claims are made payable to a real name: some claimants are “John Doe” and in one unfortunate instance, “Poopie Britches” – the claim was paid.

According to the letter, “Unemployment claims have been made and paid in the names of death row inmates and include some of California’s most notorious murderers such as Cary Stayner, Wayne Ford and Isauro Aguirre.

In the letter to the governor, the task force reported the fraud extends to every CDCR institution and every type of inmate. Many of the claims being paid are sent to out-of-state residents.

According to the task force CDCR inmates have fied 35,003 claims totally more than $140 million between March and August. In the same time period, 144 inmates on death row have filed for $421,370 in benefits.

It doesn’t end there. As the investigation expands into county jails, investigators report, “Early data shows that fraud within the county jails is also rampant. Much like the state prisons, it is anticipated that fraud will exist in every county jail facility.”

The task force recommends the following actions to address the problem:

  • Add significant resources and investigative staff to assist the Statewide Task Force in the investigation and prosecution of those involved in this fraud; and
  • Employ a crossmatch system to ensure that incarceration data is routinely matched against EDD claims so no further funds are paid to or on behalf of incarcerated individuals. If legislative action is necessary, seek urgency legislation.

And just when you thought things couldn’t get any worse, they do.

According to the task force, it is “additionally concerned that this fraud may also have permeated other facilities, including state hospitals that house the following types of inmates or patients: not guilty by ready of insanity, incompetent to stand trial, sexually violent predators and other civil commitments related to mental health.”

“We are hoping this gets the attention it deserves from the governor, and he employs the use of state resources to help combat this issue,” Rios wrote. “I personally would like to thank our North State regional task force for the work of the HDSP ISU, CCC ISU, the Lassen County Sheriff, Sacramento County District Attorney Anne-Marie Schubert, El Dorado County District Attorney and CDAA President Vern Pierson and US Attorney Greg Scott for all of their assistance with data compilation and the resources expended from their offices.”