California Prisoners Score Fraudulent Unemployment Benefits

Scamming COVID unemployment benefits from California’s Employment Development Department (EDD) isn’t just for celebrity rappers any more. Serial killers, rapists, and child molesters can cash in too!

Just before Thanksgiving, a law enforcement task force discovered that thousands of fraudulent COVID unemployment claims had been filed by residents of California’s state prisons. Worse, the EDD’s Labor and Workforce Development Agency, which operates the state’s pandemic unemployment system, had paid out hundreds of millions of dollars for these fraudulent claims. The New York Times reports:

In a letter to Gov. Gavin Newsom, the task force, led by district attorneys from San Diego to Fresno Counties, asked for “significant resources” to combat “what appears to be the most significant fraud on taxpayer funds in California history,” and wrote that claims had been paid under the names of tens of thousands of incarcerated Californians.

In most cases, task force members said, the payments were sent in the form of prepaid debit cards to addresses designated on the applications, with the proceeds later deposited to inmate accounts in jail and prisons, but in some, the benefits were sent directly to the institutions....

“It’s behemoth,” said the Sacramento County district attorney, Anne Marie Schubert, who since last month has been chairing the task force....

“The volume of fraud as well as the types of inmates involved is staggering,” the task force wrote to Mr. Newsom, adding that many of the claims filed under the names of inmates were being paid to recipients in other states and, in some cases, other countries.

“This needs to be halted,” Ms. Schubert said. “We are paying hundreds of millions of dollars in the name of serial killers, rapists and child molesters. We need to turn the spigot off.”

Indeed they do, but there’s an even more bizarre aspect to this story. The Washington Free Beacon reports that Julie Su, the head of EDD’s Labor and Workforce Development Agency, has emerged as a frontrunner to become Labor Secretary in the Biden administration:

A frontrunner to be president-elect Joe Biden’s labor secretary oversaw the payment of nearly $1 billion in fraudulent benefits to California prison inmates.

Julie Su is the secretary of California’s Labor and Workforce Development Agency, which operates the state’s pandemic unemployment system. The system paid out hundreds of millions of dollars in fraudulent unemployment payments to prison inmates and convicts, prosecutors announced on Tuesday.

The fraud involved over 35,000 unemployment claims filed between March and August under the names of California state prison inmates. The inmates included two serial killers responsible for the deaths of at least eight people, as well as the well-known murderer Scott Peterson, who was convicted in 2004 for killing his pregnant wife. The Sacramento County district attorney called the scandal “one of the biggest fraud of taxpayer dollars in California history.”...

One of the district attorneys leading the task force investigating the fraud said the “vast majority” of the money will never be repaid.

In a sane world, such an extraordinary failure to responsibly manage taxpayer resources would result in career-ending consequences. In today’s world, such an extraordinary failure may no longer be a barrier to promotion for a government bureaucrat.

Craig Eyermann is a Research Fellow at the Independent Institute.
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