CA Recovers $1 Billion In Fraudulent Unemployment Money

CALIFORNIA — More than $1 billion in fraudulent unemployment insurance funds have been recovered by the Golden State's Employment Development Department, Gov. Gavin Newsom's office announced Tuesday.

The EDD said the funds were found on 780,000 inactivated benefit cards. Much of the recovery money will be returned to the federal government since the fraudulent claims were from the emergency federal Pandemic Unemployment Assistance program.

The program was a primary target of fraud across the country during the pandemic, officials said.

"Fraudsters and criminal organizations ripped off California, along with every other state, during one of the worst crises in history — we’re taking aggressive action to return that money to the taxpayers," Newsom said.

The EDD also said it recently halted 47,000 potentially fraudulent claims worth up to $560 million.

The department first caught onto widespread fraud in 2020 during the height of the coronavirus pandemic. The department said it was facing as much as $2 billion in fraud that year, prompting lawmakers to place the EDD near the top of the state's fixit list.

Since then, the department has opened more than 1,500 fraud investigations, made 467 arrests and seized $3.5 million in counties reporting information to the state and convicted 162 people.

Since the department began investigating widespread fraud, the department said it has launched a new verification system, set up a call center for identity theft victims and worked with Bank of America to issue debit cards with new chips.

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