EDD investigating fraud linked to pandemic unemployment money

OAKLAND, Calif. - California’s Employment Development Department has acknowledged a portion of billions of dollars in pandemic unemployment assistance has been misappropriated. In some cases, letters are sent to the wrong addresses or people who never even applied for assistance.
 
Since the beginning of the coronavirus pandemic, the state has distributed $77 billion in unemployment benefits. Data shows 12 million claims have been filed since March, which is more than any other state.

“While (California’s) numbers are higher than the nation’s, not by this amount,” former EDD Director Michael Bernick said. “Some element of fraud strongly appears to be going on.”

More than 400,000 pandemic unemployment assistance claims were filed by Californians in a single week, accounting for more than half of all claims nationally.

“That’s a huge red flag,” said retired Pleasanton police officer Eric Fredgren. “There’s something wrong in California.”

He found it suspicious when unemployment assistance letters showed up in his Danville mailbox addressed to someone else.

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“I don’t know how they got my address,” Fredgren said. “I’ve never filed for unemployment in my life.”

He reported it to EDD but more mail came so he contacted the Danville Police Dept. He said the investigation into his case has “hit a brick wall.”

It keeps happening. Unemployment insurance letters, checks and debit cards keep showing up in some California mailboxes. In some cases, it’s dozens a day.

“I don’t know who these people are,” Jason Delrasario of South San Francisco said. “I’m not a fraudster. This is not my mail.”

Delrasario, an unemployed Uber driver, filed for assistance months ago but has yet to see a check in the mail.

“I’m paying interest on some of my debts, so I need the money,” he said. “I can’t wait much longer.”

Last week, 40 lawmakers called for an emergency audit of EDD to figure out what's going on and figure out what fixes need to be put in place.

Additionally, Gov. Gavin Newsom launched an investigation and assembled a team to look specifically at payment of claims. He said Wednesday the problems aren’t unique to California and all states are dealing with systems not designed for the level of activity brought on by COVID-19.

“This is unacceptable,” Newsom said. “But so is the condition of the system when we inherited it.”

The EDD said it knows fraudsters are exploiting the system and it is working as quickly as possible to help those affected by the pandemic.

“Our investigators are working with local, state and federal partners in exposing fraudulent schemed at the core of these multiple claims, developing methods to stop and prevent such claims from being paid and prosecuting the unscrupulous offenders to the fullest extent of the law,” according to a statement.

The EDD is encouraging people who receive other people’s mail or suspect fraud to report it.

KTVU took the names on mail sent to the wrong addresses and tried to track some of the people down finding most never even applied for EDD asistance. Many of them are now concerned fraudsters may have more of their personal information.

“As a taxpayer, I’m pissed off,” Fredgren said. “This is taxpayer money just being wasted.”

Brooks Jarosz is an investigative reporter for KTVU. Email him at brooks.jarosz@foxtv.com and follow him on Facebook and Twitter: @BrooksKTVU