Fraud concerns raised over state’s unemployment benefits

SACRAMENTO, Calif. (AP) — Concerns are growing about possible widespread fraud in California’s unemployment system following numerous reports of people receiving unsolicited letters, some with debit cards, from the state’s jobless agency, and a suspicious number of claims involving independent contractors.

The California Employment Development Department has paid a staggering $76.9 billion in unemployment benefits since the start of the pandemic, processing more than 11.9 million claims, most the result of Gov. Gavin Newsom’s decision to shut down much of the economy to slow the spread of the disease.

The U.S. Department of Labor reported Thursday that California had processed more than 405,000 Pandemic Unemployment Assistance claims last week, accounting for more than half of all such claims nationally. Congress authorized the program earlier this year to help people not normally eligible to receive unemployment benefits, including independent contractors.

Michael Bernick, former director of the Employment Development Department and now an attorney at the Duane Morris law firm, called that a “ridiculously high percentage.”

“This may be the potential fraud given the very, very outsized — ridiculously outsized — number of claims filed in California,” he said.

In recent weeks, several reports have emerged of people receiving dozens of letters from the Employment Development Department that include the personal information of others.

David Robertson said his son applied for unemployment benefits at the end of April. His son got a letter in August saying he was entitled to $167 per week, he said. But when they called the agency to ask more questions, they found that the contact information on his son’s account had been changed and more than $14,000 in benefits had been issued to someone else.

“How did this happen?

They can’t answer any of these questions,” Robertson said during a news conference this week organized by Republican Assemblyman Jim Patterson of Fresno.

Amy Brooks said she was denied unemployment benefits months ago. But she has recently received 24 pieces of mail from the agency. The letters have her address but different names and Social Security numbers. At least three contained debit cards.

“There’s no way this is a clerical error,” said Brooks, who lives in Fresno. “How can my address be linked to all of these people?”

Gov. Gavin Newsom said Wednesday he is “concerned about fraud in this space.” He said the state is working with local and federal authorities.

“It is a top priority for all of us,” Newsom said.

Employment Development Department spokesperson Aubrey Henry said the agency is aware of the letters and is “developing methods to stop and prevent such claims from being paid.”