As part of the ongoing effort to protect Californians from fraud and ensure the integrity of the state unemployment system, the California Governor’s Office of Emergency Services in partnership with California Department of Corrections and Rehabilitation, the California Employment Development Department and the state’s district attorneys, the US Attorney’s Office today announced additional progress by a state-led task force on investigations and interdiction efforts and has instituted new safeguards to protect Californians from fraud.
Since being established in November by Governor Gavin Newsom, the California Task Force on Pandemic Unemployment Assistance Fraud has led to the arrest of 68 individuals and opened 1,641 additional cases.
“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,” said Mark Ghilarducci, Director of Cal OES and California’s Homeland Security Advisor. “We want to send a clear and unmistakable message to those who would choose to exploit a once in a generation crisis, to steal from vulnerable individuals — do not try it. We will leverage all resources to investigate and prosecute you.”
The Task Force has worked closely with EDD to employ new tools and bolster existing programs to strengthen its fraud detection methods. Updates include EDD’s implementation of ID.me to help validate the identity of individuals filing a new claim for unemployment benefits, use of Thomson Reuter’s fraud criteria to validate other claimant information, and review of existing claims to take action on highly suspect claims
“At a time when Californians are struggling with economic challenges due to COVID-19, it is disgraceful that so much EDD fraud has occurred,” said Alameda County District Attorney Nancy O’Malley. “Even more troubling is the impunity with which inmates in our jails and prisons and their co-conspirators have defrauded the public of funds that should go to those actually in need. The Bay Area Task Force is actively investigating and prosecuting these wrongdoers to ensure the integrity of our unemployment insurance system and the availability of support for those who have legitimate claims.”
Representing district attorneys’ offices overwhelmed by both Pandemic Unemployment Insurance and Unemployment Insurance fraud, Sacramento District Attorney Ann Marie Schubert is leading the charge on regional task force efforts working together to return taxpayer dollars.
“The magnitude of EDD fraud in California is astronomical. Recent estimates reveal that over $20 billion of EDD fraudulent claims were paid to criminals. Through the collaboration of law enforcement, district attorneys, federal prosecutors, EDD, CDCR and the Governor’s Office of Emergency Services, aggressive investigations and prosecutions are occurring throughout California,” said Schubert. “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.”
Newsom directed Cal OES to facilitate a coordinated effort, with other state agencies, the district attorneys and the US Attorney’s Office of multiple local, state and federal law enforcement entities to hold those responsible for PUA/UI accountable to fullest extent possible under the law.
“State unemployment systems across the country were under attack by sophisticated organized fraud schemes last year,” said Employment Development Department Director Rita Saenz. “Strong cooperation among local, state and federal law enforcement helps stop these schemes and bring perpetrators to justice.”
The full list of organizations participating in this effort includes: California Governor’s Office of Emergency Services, the California District Attorneys Association, United States Attorney’s Office, Federal Bureau of Investigation, United States Postal Inspection Service, US Department of Labor, Internal Revenue Service, Federal Deposit Insurance Corporation – Office of the Inspector General, Social Security Administration – Office of the Inspector General, United States Secret Service, United States Marshalls Service, Federal Bureau of Prisons, California Department of Corrections and Rehabilitation and the California Employee Development Department.
Some of the statewide efforts of the task force to date include:
- Allocating $5 million in state funding to immediately support and enhance the joint investigative efforts of regional District Attorney Task Forces.
- Establishing a new data sharing agreement that allows the CDCR to more broadly share information with EDD investigators to cross-match inmate data and more rapidly identify fraudulent claims.
- Utilizing the state cyber security threat intelligence, big data analysis and threat assessment capabilities to support investigative efforts.
Supporting federal, state and local law enforcement in conducting search warrants, indictments and facilitating arrests of fraud perpetrators.
Additionally, the US Attorney’s Office for the Eastern District of California, which covers 34 counties across Northern and Central California, has appointed district-wide coordinators to work closely with federal and state agencies on combatting EDD fraud at the federal level. The US Attorney’s Office is working on multiple investigations and has charged several defendants, including known gang members, who have stolen millions of dollars of EDD UI benefits.
“The U.S. Attorney’s Office is committed to combating fraud targeting benefits intended to assist individuals suffering during the ongoing COVID-19 pandemic like the conspiracy rings we are prosecuting in the Chowchilla Women’s Facility,” said Acting U.S. Attorney Phillip A. Talbert. “We will continue to work with our local, state, and federal law enforcement partners to investigate and prosecute fraud arising out of the pandemic.”
Regional Task Forces at work
The effort between counties involves the four regional task forces in Southern California, Central California, Northern California, and the Bay Area. These regions are collaborating through this system in coordination with Cal OES to share data, track resources, and bring suspects to justice. In these efforts, 382 search warrants have been served to individuals and businesses, 94 charges have been filed, and 68 individuals have been arrested outside of the prison system.
The Sacramento County District Attorney’s Office is leading the charge in Northern California by spearheading the task force that includes much of the geographic area of the state. Investigations and searches have yielded connections with organized crime and recovered hundreds of thousands of taxpayer dollars in stolen funds.
The Central California Task Force, which is being led by Kern County is making headway into the of suspected fraud centered around area prisons. In Central California counties through March 2021, 51 new investigations have begun, yielding dozens of search warrants, 9 separate charges filed, and multiple arrests in a single month.
Led by the Riverside County District Attorney’s Office, the Southern California Task Force is uncovering and prosecuting a wide range of fraud cases stemming from California prisons. With 68 new investigations since August 2021, the Southern California Task Force counties have followed through on 100 new search warrants, filed 23 charges, and arrested nine individuals connected with PUA/UI fraud.
The Alameda County District Attorney’s Office is leading the Bay Area Task Force in uprooting fraud within Bay Area counties and their prison systems. Through March 2021, 64 investigations have been conducted with other agencies, nearly 50 search warrants have been executed, and 34 arrests have been made connected to PUA/UI fraud. Partnerships between investigating agencies are producing a multitude of new charges, arrests, and seized goods.