California Unemployment Fraud Could Balloon to $2 Billion

As we noted, California prison inmates, including convicted murderers, serial killers and such, have been making fraudulent unemployment claims, and the state Employment Development Department has been faithfully paying the criminals. According to law enforcement officials, EDD has no mechanism to stop the payouts amounting to some $1 billion. By some accounts the worst fraud on taxpayers in state history is about to mount a surge.

Bank of America contracts with EDD for unemployment debit cards. As USA Today reports, the bank has identified 640,000 suspicious accounts filed in the names of infants, children, centenarians and out-of-state residents. Bank of America estimates the total amount of fraud at $2 billion. Jon Coupal of the Howard Jarvis Taxpayers Association compared it to opening a bag of cash in a tornado and hoping that the money lands where it’s supposed to be. 

The massive fraud has escaped the notice of state attorney general Xavier Becerra, tapped by Joe Biden to head the U.S. Department of Health and Human Services. EDD boss Sharon Hilliard departs on December 31, proclaiming, “I retire knowing that EDD is on a great path to success.”

Back in July, Gov. Gavin Newsom formed a “strike team” to deal with EDD processes, but nothing to prevent or detect fraud. The governor is now taking measures to deal with the struggling economy. His pick for chief economic and business adviser is Dee Dee Myers, a former White House press secretary for President Bill Clinton and campaign worker for Dianne Feinstein’s 1990 gubernatorial bid. Myers’ experience, Gov. Newsom claims, gives her “an ability to work across sectors, ensuring that our recovery is built upon common ground and common solutions.” Embattled taxpayers have reason to wonder. 

Myers is the author of Why Women Should Rule the World, but the Santa Clara political science grad has no record of turning around a struggling economy. After Gov. Newsom tapped her for the post, Myers told reporters, “He’s really smart . . . He’s a big and creative thinker, and I find that very energizing, to think about what’s possible.” The governor, Myers added, “really understands, I think, the innovation economy and the potential of the innovation economy.”