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California law enforcement authorities cracked down a large-scale unemployment fraud ring involving 21 people who stole more than $250,000 by submitting fake claims to the state’s Employment Development Department (EDD).

It is the first major case in California involving fraudulent unemployment claims during the COVID-19 pandemic as the EDD struggles in handling applications for benefits from millions of jobless Californians.

The unemployment fraud ring operated out of the San Mateo County Maguire Correctional Jail. Proactive investigators discovered it when they overheard inmates talking about fraudulent claims to the EDD.

In July, the San Mateo County Sheriff’s Office Administrative Classification Unit and the District Attorney’s Office started an investigation into the allegedly fraudulent claims.

The investigators from the Sheriff’s Office and the DA’s Office work with a criminal investigator for the EDD. They found that the unemployment fraud ring submitted bogus claims using the names of 30 different inmates.

In addition, the investigators identified 21 inmates who were responsible for 16 of the fraudulent claims submitted between June 9 and July 30, 2020, resulting in unlawful payments of over $250,000.

Authorities recovered $150K from the unemployment fraud ring

On August 15, law enforcement authorities served multiple arrests and search warrants in three counties for individuals who were participating in the submission of fraudulent unemployment claims but were not in custody at the Maguire Correctional Facility or California Department of Corrections.

$250K in fraudulent #EDD #unemployment payments discovered by SMCSO&DA investigators using inmate information.

Warrants netted 21 people responsible for 16 fraudulent claims using 30 inmates’ personal information to claim unemployment.
$150k was recoveredhttps://t.co/eLP0tQkoFJ pic.twitter.com/0nc5y7YX7Q

— San Mateo County S.O (@SMCSheriff) August 15, 2020

Law enforcement authorities arrested seven people and recovered $150,000 in cash while fourteen others were already in custody.

“This is the first type of fraudulent ring we have had involving inmates at our facility and we have been in contact with representatives from the EDD to ensure there are no further fraudulent claims being filed using inmate information. Inmates who are currently in custody at the Maguire Correctional Facility and participated in the EDD fraud were rebooked on the new charges. We are grateful to have caught this scheme when we did and that our personnel are so proactive,” according to the San Mateo County Sheriff’s Office in a statement.

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