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Video: CA inmates stole up to $1B in COVID benefits scam, prosecutors say

San Quentin State Prison, California. (Zboralski, Wikimedia Commons/Released)
November 25, 2020

In a Tuesday press conference, Sacramento County District Attorney Anne Marie Schubert said “tens of thousands of inmates” including death row inmates, scammed the state out of as much as $1 billion in pandemic-related unemployment benefits during the ongoing coronavirus pandemic.

Those involved included local, state and federal inmates and included “every type of inmate that you could conceivably think of, murderers doing life or life without the possibility of parole, rapists serving hundreds of years of a sentence or perhaps life as well, child molesters, serial killers and other murderers sitting on California’s death row,” Schubert said. “Hundreds of millions of dollars, that may well amount to upwards of a billion dollars, having already been paid in their names.”

Schubert said the unemployment fraud could amount to the biggest case of fraud in California taxpayer history.

Schubert said that between just March and August, 35,000 unemployment claims were filed in the names of California state prison inmates and as of August, 20,000 of those claims had been paid, for a total of over $140 million.

Schubert said some of the unemployment benefits were paid directly to inmates and while in other cases the money was sent to relatives and friends outside the prisons and jails. Schubert said some cases used real names and real social security numbers while others employed fake names and numbers.

“We know, from looking at the early stages of this data, that there is both inmate fraud, on their own regard, working in conjunction with people on the outside on a massive scale,” she said. “We also know that there’s likely identity theft or people have stolen their identifies and have benefitted from stealing that.”

Schubert said 158 unemployment claims were filed for 133 death row inmates and the highest single claim paid was close to $20,000. About $420,000 for all the death row inmates, Schubert said.

Later in the press conference, San Mateo County District Attorney Steve Wagstaffe said one of his investigators, reviewing San Mateo County jail phone records in July, heard an inmate talking about the unemployment scam that he heard other inmates were taking part in.

Kern County District Attorney Cynthia Zimmer noted her county has a high number of detention facilities, including five state prisons, and the fraud was “running rampant” in those state prisons. Zimmer said she was notified of the fraud by state investigators.

In a statement to NBC Los Angeles, California Gov. Gavin Newsom said:

“Unemployment fraud across local jails and state and federal prisons is absolutely unacceptable. Earlier this year, I launched a strike team to expedite unemployment payments and to minimize abuse of the system. When we saw evidence of fraud in correctional facilities, I directed the Employment Development Department to review its practices and to take immediate actions to prevent fraud and to hold people accountable when fraud is not prevented. Based on that direction, EDD and CDCR, in partnership with USDOL worked to match social security numbers of those in state custody to identify the scope of the problem and to hold people accountable. To expedite and strengthen these efforts I have directed the Office of Emergency Services to stand up a task force to coordinate state efforts and support investigations by local District Attorneys. We will continue to fully partner with law enforcement and direct as many resources as needed to investigate and resolve this issue speedily. While we have made improvements, we need to do more. Everything the state does will be done in partnership with the local District Attorneys and I thank them for their commitment to resolving this issue as quickly as possible.”