When 20-year-old Sebastian Alvarez opened a recording studio last spring, he couldn’t have anticipated that a pandemic would halt his business before it could get off the ground. He applied for unemployment to keep himself afloat financially, and cover the business costs he’d need to take care of while everything was shut down.
But upon approval for unemployment insurance, he found himself in another unforeseeable situation—he couldn’t access any funds, because someone allegedly purchased his social security number, and was using his identity to collect benefits.
“I'm just grateful that it's not urgent,” said Alvarez. “It's not my last hope right now.”
When he realized that his identity and benefits had been compromised, and that it was unclear when he’d receive money, he moved out of his apartment to his family home, where they now assist him financially.
“Thankfully, that was an option,” he said. “I'm just super grateful that I have them. Otherwise I would be, you know, in the streets.”
When he received his EDD debit card in June, he noticed that the money issued to him was already spent—by someone he did not know, who lived in Milpitas. He called Bank of America to report the suspicious spending, and asked if they had ever issued debit cards to an address other than his. They had—3 times to a Milpitas address since 2016, and again in March of this year.
He also realized that on his unemployment profile, a form stated that he had applied for paid family leave in 2016. He hadn’t; he was 16 at that time. Additionally, when the EDD sent a verification letter to Alvarez’s former employer when he applied for benefits, the letter contained his correct social security number, but a woman’s name.
Alvarez said that he reported the situation to the EDD multiple times.
“It's a little frustrating, because I call and I call, and I tell them the same thing a thousand times,” he said. “And they've even said, ‘Okay, an investigator is going to call you.’ And an investigator never calls me.”
Alvarez's situation comes at a time when the EDD has announced that they will pause unemployment claims for two weeks, until October 3, as the agency addresses backlogged claims and fraud. The agency also announced Saturday that they will use a new identity verification tool for claimants.
With the help of his mother, Karla Paez, Alvarez reported the situation to the San Diego Police Department and the Milpitas Police Department, where they determined the woman using his information lived.
In a police report obtained by KTVU, officer Daniel Cancilla wrote that he reached the suspect over the phone. She admitted that she purchased Alvarez’s social security number at a flea market three years ago.
She said that she was able to start working in the country after obtaining his number and used it to apply for jobs. She said that she believed she purchased the social security number legally, and did not realize she was breaking the law.
Alvarez said that his mother also phoned the suspect, who admitted to everything, and apologized. But despite her remorseful words, Alvarez said that she continues to access his account and collect money owed to him.
“I don't want her to get deported, but at the same time, she's not making it any easier for anyone, especially because she keeps attempting to collect benefits using my social,” he said.
Undocumented workers make up 10% of the workforce in California, according to Alexx Campbell, an attorney at Legal Aid at Work. They’ve been hit especially hard by the pandemic because they cannot access social safety nets, like unemployment.
Former EDD Director Michael Bernick said that identity theft with EDD benefits has always been an issue, but the recent proliferation is probably a result of the increased amount of money available in benefits, and the increased number of applications. He said that for Alvarez’s situation, there is not much else he can do. He’s done what he would recommend—to report the fraud to the EDD and to the police.
“I know people are very, very, very tired of contacting EDD—very, very, very tired of waiting for the EDD,” he said. “But to be truthful, there's no easy answer to this.”
The department is surely overwhelmed, he said.
“I don't know if they're overwhelmed, or they don't care,” Alvarez said. “But I think it's either of those.”
Bernick said that the week of September 5, the agency received over 600,000 new claims. Throughout the pandemic, they’ve processed over 13 million claims, the agency announced on September 17 in a press release.
Despite the harm Alvarez has endured, he said that he does not wish the suspect ill; he just wants his unemployment insurance, and an uncompromised identity.
“Out of this situation, I just want my social to be cleared...to not have any issues when I try and establish credit,” said Alvarez.
In response to reports of identity fraud related to unemployment benefits, the EDD wrote in a press release last week that the department is “aggressively fighting fraud in the wake of unscrupulous attacks on the unemployment program here in California and across the county.”
Department officials said that “perpetrators are often using stolen identity information from national and global data breaches, as well as exploiting expedited payment efforts in the federal PUA program.” They added that claims flagged as suspected fraud have been “suspended or closed while EDD investigators partner with local, state, and federal law enforcement to expose and prosecute offenders to the fullest extent of the law.”
The agency said that they will no longer automatically backdate certain unemployment claims, in order to stop fraudsters from targeting months when the $600 stimulus payments were available.
They also said that they have eliminated “multiple claim situations following key identified patterns” at the same address. A week later, the agency said in a release that this action yielded a large decrease in applications.
The Santa Clara County District Attorney’s office said in an email that the office had received the police report from the Milpitas police department, and that the case is under review.
“They (the EDD) haven't really made serious efforts to contact me,” Alvarez said. “I would really appreciate an email or a phone call, you know, just to say, ‘Hey, we're looking into it.’”