Local Assemblyman Calls State Unemployment Officials ‘Dimwitted Accomplices’ of Fraud

A Fresno assemblyman wants hearings and investigations after reported fraud of unemployment benefits.

State and federal prosecutors announced Tuesday that the Employment Development Department paid out $40 million in claims to 20,000 state prison inmates across California.

Assemblyman Jim Patterson (R-Fresno) didn’t mince words during a media teleconference he held in response to the revelations.

“This is a complete and monumental failure of one of the most significant public facing organizations in the state of California. They were warned repeatedly and they ignored those warnings. And then at a time when we needed them the most, they were the dimwitted accomplices of a billion dollar fraud,” Patterson said.

Patterson Long a Critic of Department

Patterson has been critical of the EDD for its handling of claims in the past. This is just another example, Patterson said, why the agency needs more oversight.

“They have failed utterly and completely. How in the world do you send hundreds of millions of dollars to prisoners with addresses that include the prisons they’re serving in, with names like John Doe and Poopy Pants?” Patterson said.

EDD officials say they are working on changes.

“EDD has been working with the assistance of the U.S. Department of Labor, Office of Inspector General  (DOL OIG) on cross-matches with inmate populations to identify suspect claims,” spokesperson Loree Levy said. “We’re also pursuing how to integrate such cross-matches moving forward as part of enhanced prevention efforts during this unprecedented time of pandemic-related unemployment fraud across the country. In addition, EDD is working collaboratively with state cyber-security experts.”

Patterson Calls for Hearing

The assemblyman wants EDD officials to explain themselves in open testimony. Patterson is the vice chair of the Assembly accountability committee and is on the Joint Committee on Legislative Audit.

“The only way we’re going to get those answers is to force them out into the open to publicly come before oversight committees and to have to answer under oath why and how they have failed so miserably, especially when they have been warned repeatedly,” Patterson said.

Assembly Speaker Anthony Rendon (D-Lakewood) says such oversight hearings are likely to happen.

“Today’s announcement by investigators shows how critical continued oversight of the Employment Development Department is. While so many Californians are in need, it’s unacceptable to see hundreds of millions of dollars lost to fraud. As we move into the 2021-2022 session, the Assembly will continue to provide oversight and assess best practices, to ensure fraud at this level never happens again,” Rendon told GV Wire℠.

Hearings also got a vote of confidence from Assemblyman Rudy Salas (D-Bakersfield), chair of the joint audit committee.

“I called for an independent audit of the EDD because of widespread problems within the department. Reports of people defrauding the system who should not be receiving EDD funds is unacceptable. I plan to continue holding oversight hearings and working with my colleagues to introduce legislation to help fix EDD,” Salas said via email.

Prosecutors: Infamous Inmates Made Claims

Of the 35,000 claims made (not all have been paid out) for approximately $1 billion, someone filled in the name of convicted murderer Scott Peterson.

Peterson was sentenced to death after being convicted of killing his pregnant wife in a case that attracted national attention. But the California Supreme Court recently overturned Peterson’s death sentence and ordered a lower court to review his murder conviction to see if he should receive a new trial.

Sacramento County District Attorney Anne Marie Schubert said claims were also filed in the names of multiple notorious convicted murderers, including Cary Stayner, convicted of killing four people in Yosemite National Park in 1999; and Susan Eubanks, a San Diego woman convicted of killing her four sons in 1997.

“Quite frankly, the inmates are mocking us,” Schubert said.

Schubert and other prosecutors said the problem was compounded by dysfunction at the California Employment Development Department, which they said does not check unemployment claims against a list of prison inmates, as many other states do.