“One guy on a telephone call bragged he just bought a $400 watch for his mother thanks to the state.”
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A scheme supposedly gave Scott Peterson and other California inmates COVID-19 unemployment benefits.
Attorneys described it as “the most significant fraud on taxpayer funds in California history.”
State and federal prosecutors investigated “fraud in the pandemic relief system administered by the state Employment Development Department [EDD].” For some reason, California does not have “a system that ‘cross matches’ prison and jail data with unemployment claims.”
From The Los Angeles Times:
The potential fraud came to light after district attorneys in Los Angeles, Lassen and San Mateo counties uncovered questionable claims coming from local jails and prisons, in part from monitoring recorded phone conversations of inmates while investigating unrelated crimes, said multiple sources familiar with the investigations. Investigators also noticed large money orders being sent to inmates.
Riverside Dist. Atty. Mike Hestrin said the scheme works typically by someone on the outside doing the paperwork. The payments usually go to an address outside of prison. Once the cash card is obtained, the person on the outside puts some of the funds into the inmate’s prison account, where it can be used to buy services and goods such as food and stamps.
“One guy on a telephone call bragged he just bought a $400 watch for his mother thanks to the state,” Hestrin said.
San Mateo County District Attorney Stephen Wagstaffe’s office discovered fraud months ago. The office filed charges against 22 people who allegedly applied “for benefits while incarcerated or helping an inmate to do so – felonies that could result in three years in prison.” Four have pleaded guilty.
Death row inmates got $400,000 and over $140 million went out to over 35 prisons. Kern County has five prisons and received $16 million.
Some claims used John Doe, John Adams, or “poopy britches” as names on the claims.
Officials did not disclose how much is attached to Peterson’s name. He is one of the 133 death row inmates associated with the fraud. California has 700 death row inmates.
Prosecutors demanded Gov. Gavin Newsom do something since this fraud could have been prevented:
The prosecutors contend that the fraud is preventable with systems such as those used by other states that check inmate data against unemployment claims. They asked Newsom to step in to “turn off the spigot” of payments to incarcerated people, contending that EDD’s response to their investigations has been “slow to nonexistent,” according to Sacramento County Dist. Atty. Anne Marie Schubert, who helped form and lead a task force on the issue.
“EDD, it’s just a dysfunctional mess,” said El Dorado County Dist. Atty. Vern Pierson, a member of the task force and president of the California District Attorneys Assn.
Newsom on Tuesday said the fraud was “absolutely unacceptable” and announced his own task force to aid district attorneys and coordinate California’s anti-fraud efforts, adding that the state has already started comparing inmate rolls to pandemic benefit claims.
“Earlier this year, I launched a strike team to expedite unemployment payments and to minimize abuse of the system,” Newsom said in a statement. “While we have made improvements, we need to do more.”
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