EDD fraud report: Unemployment agency estimates nearly $20 billion has been paid out to scammers since pandemic began
This figure is actually down from the $31 billion reported last year.
EDD says it was an anomaly, but our sister station KFSN-TV in Fresno has discovered that potential fraud is still going on.
California’s EDD tightened its belt in 2020 after California district attorneys discovered billions of dollars in fraudulent payments were issued, including to inmates across the state.
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“This may and will be one of the biggest taxpayer money frauds in California history,” Sacramento County District Attorney Anne Marie Schubert told a conference call. release in December 2020.
Shortly thereafter, EDD boasted of a new task force that worked closely with EDD, “to utilize new tools and enhance existing programs to strengthen its fraud detection methods. to validate people’s identity.
People had to upload two main forms of ID such as a passport, driver’s license or military ID Where a primary form and two secondary forms such as a phone bill, cable bill, or bank statement that is less than 90 days old.
The new process has left thousands of legitimate people out of work and out of money.
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So many people were having trouble uploading their verification documents that state officials, like Assemblyman Jim Patterson, were allowed to step in to help.
Voters could send their documents to Patterson’s office, and staff would help upload them to the EDD portal.
From there, EDD and ID Me would begin the normal verification process.
“Our staff have become very good at problem-solving and problem-solving,” Patterson said.
He says his office has been able to help more than 3,000 people get the benefits they need.
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Then one day the office staff suspected that someone trying to upload his documents was trying to commit fraud.
Patterson says one person submitted their primary ID and a Credit One bank statement to upload into the system.
Once they were processed and approved, the same person asked Patterson’s office to help out a friend.
This friend submitted his primary form of identification and what was supposed to be their Credit A bank statement.
But office staff looked closely and noticed that both people appeared to be submitting the same bank statement. Everything was the same, from the charges on their account to the account number listed.
The only thing that was different was their name and address.
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“When we found out about the fraud, we were shocked by it and then kind of laughed, well, they’re actually trying to use members of the office of the legislature who are trying to help our constituents to help them defraud the EDD.” said Patterson.
Patterson’s office immediately flagged the accounts as possible fraud with EDD and reported it to law enforcement.
ABC7 News does not show names or identification documents because the individuals have not been charged with a crime.
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EDD spokeswoman Loree Levy said the department’s fraud detection has improved since 2020, saying the EDD believes it has stopped billions of dollars in potential fraud.
“Just because fake documents are uploaded doesn’t mean they result in a payment either. We’ve seen a lot of fake documents,” California Department of Employment Development spokeswoman Loree Levy said. .
But according to information provided to ABC7’s sister station Action News, at least one of those people appears to have been paid tens of thousands of dollars.
Action News asked ID.me if its technology cold-detects fake bills and bank statements, turns out it can’t.
In a statement, ID.me CEO and Founder Blake Hall said:
“ID.me has advanced capabilities to authenticate documents using machine vision and learning algorithms for government photo IDs. Documents such as phone bills and bank statements are more difficult to verify because these documents do not have security features. However, video chat verification is logged, so in the event of identity theft or fraud, an audit trail is available to agencies.“=
“Since they’re basically saying they don’t have a sure way to detect these fake notes, is that still the best form of verification for individuals?” Action News reporter Jessica Harrington asked Levy.
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“Well, it’s not on its own. We’re looking at a combination of documents, it can’t be just a bill, for example, a utility bill. So there are many things and I can’t going into too much detail, a lot of detail, but there are many things that we’re looking at in combination,” Levy said.
Fresno County District Attorney Lisa Smittcamp said there are several ongoing EDD fraud investigations locally.
She says the cases are extremely difficult and time-consuming to investigate and, likely, the punishment will be minimal, given California law.
“To try to get these people, you know the person who makes a claim of $5,000 or $10,000, jail or jail is probably going to be next to impossible.” Smithcamp said.
Smittcamp says taxpayers are the victims of it all – saying the saddest part is that most of the money is unlikely to ever be recovered.
Smittcamp had this message for suspected criminals and those who thought they could get away with something similar: “Just do the right thing and get a job.”
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