Unemployment Fraud Scheme Suspected; CA Officials Investigate

CALIFORNIA — A possible widespread fraud scheme affecting the unemployment benefits system caught the attention of lawmakers this week. Officials have opened an investigation into the incident, Gov. Gavin Newsom said Wednesday at a news conference.

Californians who hadn't previously filed unemployment claims began receiving bizarre amounts of letters from the Employment Development Department last month, many of which were regarding claims of other people.

Now, there's growing concern that those addresses are being used to file fake unemployment claims.

"We are concerned about fraud in this space," Gov. Gavin Newsom said Wednesday afternoon. "We are working with local authorities as well as state agencies across every jurisdiction to weed that out."

The concerning reports come at a time when millions have applied for unemployment benefits in California after the coronavirus pandemic left many without jobs. In July, 1.1 million Californians filed claims for unemployment. Although fraud has been a consistent concern among many state agencies, it is unclear how many of these claims may be fraudulent.

@CA_EDD I'm getting multiple requests for unemployment benefits to my address for people who I don't know and who don't live at my address. I called the fraud line but the recording states nobody is manning the lines (which seems nuts), see attached photos. pic.twitter.com/wfaHezuIWE
— Ben Gregg (@Ben_Gregg) September 2, 2020

"Identity theft is a growing problem affecting millions of people and their livelihoods," The EDD tweeted Saturday. "If you think someone has filed an Unemployment Insurance (UI) claim in your name, report it."

The EDD has added a new team of five employees, who are expected to help sort the issue out, Newsom said Wednesday.

"[We've brought on] five new people with fresh capacity to get under the hood and figure this out in real time…and figure out how widespread this is," Newsom said.

A few California legislators have been vocal about the issue, with some taking aim at the agency.

"116 envelopes containing debit cards, certification forms, etc. mailed to my constituent from EDD. Addressed to 33 different people. None of whom ever lived at that address" California Senator Melissa Melendez tweeted Tuesday. "Last night we requested an audit of EDD. The request was denied."

Assemblyman Jim Patterson weighed in Wednesday at a news conference and called for the EDD and the U.S. Department of Labor inspector general to investigate.

"Something is going terribly wrong here with EDD," Patterson said.

Melendez tweeted again Wednesday to comment on the situation.

"If the government can't send unemployment checks to the right people who asked for them, how can we expect them to not send election ballots in the mail to people who didn't ask for them?" Melendez tweeted. "Will 116 mail ballots wind up at a single house for November?"

Newsom responded to the outrage expressed by officials at his Wednesday news conference.

"I appreciate the legislative urgency, we have worked closely with many legislative leaders...we share the same goals, the same urgency," Newsom said.

If the government can't send unemployment checks to the right people who asked for them, how can we expect them to not send election ballots in the mail to people who didn't ask for them? Will 116 mail ballots wind up at a single house for November?" pic.twitter.com/ZKhYMY23kC
— Senator Melissa Melendez (@senatormelendez) September 2, 2020