That California’s state prisons and county jails may harbor fraudsters and thieves should probably not shock or surprise. But the revelation that inmates have bled hundreds of millions of dollars from state coffers via fake unemployment claims — while still behind bars — seems to have done just that.
In early December, nine county district attorneys implored Gov. Gavin Newsom for more help ferreting out fraud — a task made tougher by rules that can prevent the right hand from knowing what the left hand is doing. Among their most fervent asks: Allow expedited cross-matching of inmate data such as names, Social Security numbers and birth dates with unemployment claims filed with the California Employment Development Department.
“It is our understanding from several state agencies that this information has not been proactively shared with EDD (an agency with law enforcement investigatory powers) under the premise that there is some statutory prohibition to this data sharing,” wrote the D.A.s, including Riverside County District Attorney Michael Hestrin.
That’s wrong, they said: The law authorizes the EDD to release information to federal, state or local agencies to verify or determine the eligibility or entitlement of an applicant.
“(W)e believe, and the emerging data supports, that this is an urgent matter with an unprecedented scale of fraud that is bilking the State of California and its people of desperately needed financial resources,” the letter states.
State officials learned of the fraud scheme in the state prison system in August, but it continued nonetheless, the district attorneys said. They weren’t tipped off by state officials, but by federal investigators.
The data vital for matching, from the California Department of Corrections and EDD, didn’t get to a statewide task force until November. Within a matter of days, it had reviewed the data “and found the staggering scope of the fraud,” the D.A.s wrote. “We also received unverified information that EDD has distributed at least $1 billion to out-of-state claimants. We are deeply concerned that the fraud will continue to grow exponentially.”
They asked that “urgency legislation” be immediately introduced to allow the future cross-matching of data between correctional facilities and EDD. “With such legislation, California will align with the overwhelming number of states that have done cross-matching for years,” they wrote.
Governor responds
A task force convened by Newsom, and led by the Governor’s Office of Emergency Services, is coordinating daily with local, state and federal law enforcement, “and has already made important progress to resolve challenges and move the investigative efforts … forward,” spokesman Brian Ferguson said by email.
“We remain laser focused on coordinating with our partners in the district attorney’s offices to root out fraud and criminal activity within the unemployment system and hold those responsible accountable.”
On the data-sharing challenges, the task force already has identified a path forward, he said. California’s Department of Justice has granted approval to allow corrections to share its data “more broadly” with EDD investigators.
“This was a significant positive development, providing the EDD a new tool to now accelerate cross-matching of inmate data to identify inmates illegally applying for unemployment benefits,” Ferguson said.
“This information is critical and helpful to our collective investigative efforts. It will also help, through our partnership with the District Attorneys, to identify and eradicate any potential fraud within both the state prison system as well as local jail facilities.”
Local anger
In addition to the Riverside County D.A., the district attorneys who signed the letter were from Sacramento, Lassen, El Dorado, Fresno, Marin, Monterey, Ventura and San Diego counties.
“It’s outrageous that taxpayers will be on the hook for these fraudulent payments and that a system was not in place earlier to alert authorities and prevent such fraud,” said an emailed statement from San Diego County District Attorney Summer Stephan.
“A forensic investigation will take time and resources but is necessary to hold individuals responsible for gaming the system at a time when our economy and our communities are already hurting amid the ongoing pandemic.”
Stephan’s office is in the very early stages of investigating suspected EDD fraud committed by inmates in custody at San Diego County prison and jail facilities, a spokeswoman said. While the complete scope of the fraud is not yet clear, early indications are that as much as $5 million in fraudulent payments were made to inmates at the Richard J. Donovan Correctional Facility alone, she said.
In Orange County, D.A. Todd Spitzer has assigned a prosecutor and investigator to the statewide EDD Task Force, “and we are working to determine if there was fraud perpetuated by inmates housed in local facilities as well as by state prisoners who committed crimes in Orange County.
“I am disgusted by this behavior and how state bureaucrats allowed millions in taxpayer monies to be paid to convicted felons doing hard time in state prison,” Spitzer said in an emailed statement.
How does it happen?
Unemployment fraud is not uncommon.
On Dec. 16, federal prosecutors announced that Cara Marie Kirk-Connell, 32, of Menifee pleaded guilty to fraudulently obtaining more than $500,000 in COVID-related unemployment benefits.
“Kirk-Connell admitted she knew people who access the ‘dark web’ to purchase stolen identities that she used to then file fraudulent claims with EDD,” the DOJ said. “She further admitted to watching YouTube videos that instructed viewers on how to commit EDD fraud.”
The stolen information included dates of birth and Social Security numbers that were then used to apply for unemployment benefits in the names of other people. She had numerous cards in numerous names, and was authorized for $534,149 in COVID-related unemployment benefits, of which nearly $270,000 was spent, according to an affidavit filed with the criminal complaint.
There are many ways that personal information winds up on the dark web — computer hacks included — but there are more prosaic ways.
For years, the EDD has included full Social Security numbers on its most frequently mailed documents. A new bill, Senate Bill 58 by Sens. Scott Wilk, R-Santa Clarita, and Melissa Hurtado, D-Sanger, would require the EDD to immediately end that practice.
“With unemployment-related scams proliferating throughout California, there is no excuse for the EDD to continue to include full Social Security numbers on unsecured mail,” said Sen. Pat Bates, R-Laguna Niguel, a co-author on the bill. “The last thing the unemployed need to worry about is having their identity stolen by criminals.”
Source: Orange County Register
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