San Francisco Chronicle - (Sunday)
State tries to curtail suspected jobless aid fraud
The California Employment Development Department is taking steps to combat a sharp increase in suspected unemployment fraud that will require some people filing for benefits to jump through additional hoops to get paid.
On Thursday, EDD said it will no longer automatically backdate Pandemic Unemployment Assistance claims to the date a person said they lost work and will “limit multiple claims at the same address.”
Other states have been combating unemployment fraud for months. As early as May, the Secret Service warned about a sophisticated international crime ring, likely emanating from Nigeria, targeting state employment systems. Criminals may be using identity information stolen in past hacks to file unemployment claims in the names of real people, many of whom are still employed.
The EDD reported that between January and June, about 60% of the mail it sent out seeking additional information to verify a claimant’s identity was returned. That response rate “dropped significantly to 15% in July and 9% in August — indicating a strong suspicion of recent fraud that will go unpaid since the EDD will not receive the necessary documents on these
claims to prove identity,” it said in a news release.
Many people across the state have received mail from EDD at their home addressed to strangers. On the flip side, some who were approved for unemployment said their Bank of America debit cards loaded with benefits were sent to the wrong address.
Lena Emmery, who lives in San Francisco but owns a property with two small homes in San Rafael, received about a dozen letters addressed to “a lot of different names” at the two homes about a month ago when they were vacant. “It was very mysterious,” she said. “We just crossed out the name and put it back in the mailbox.”
About three weeks ago, Don Scordino, president of the Fresno Association of Realtors, received three letters from EDD at a vacant home he had listed. He verified with the owners that they had no connection with the addressees, and returned them to the mail carrier, who said, “This is happening a lot.”
Scordino asked other Fresno Realtors if they had this experience “and I was amazed at how many other people responded with, ‘Yeah, we have been seeing this.’ ” One agent said at a house he was showing, there were about six letters that had been brought inside. The next day, there was a broken window and the letters were gone. Another agent said 67 letters from EDD arrived at a house she was showing. “We got pictures. There were 10 different names, none related to ownership,” he said. “I didn’t open any of the envelopes, but about half felt like they had a debit card on them.”
Marc Dickow, president of the San Francisco Association of Realtors, said he got about 20 letters addressed to a vacant home he had listed on Dolores Street, all addressed to a person the owner didn’t know. He said other San Francisco agents “have gotten them at their listings.”
Many people living in their homes have also received EDD mail addressed to strangers, said Alisha Gallon, a spokeswoman for Assemblyman Jim Patterson, RFresno.
Dave Robertson contacted Patterson’s office on behalf of his 19yearold son Forrest, who filed for unemployment at the end of April after he lost work as a mechanic at the shop where he was working as an independent contractor. At the end of August, he got a letter saying he was awarded benefits, which included Forrest’s full name and Social Security number.
“We waited about 10 days, contacted EDD, which is damn near impossible,” Dave Robertson said. “They said, ‘The information you are giving us doesn’t line up with what we have.’ What happened was that sometime between Aug. 19 and 31, someone had jumped into their system or something and absconded with his information, changed his mailing address, email address, phone number, dropped the middle initial out of his name. The debit card went to somebody here in Fresno and they had already cleared $14,876 in funds.” Robertson went to the Fresno police, which referred him to the county sheriff ’s office, which took a report but didn’t promise to investigate. EDD also told him “there is nothing we can do about it,” Dave Robertson said. Bank of America told him to report the issue to a BofA fraud number.
Patterson, in an email, said, “It’s the EDD’s job to have systems in place that provide timely and accurate benefits to Californians while at the same time protecting their identity. They’ve failed at all three. The first thing they can do is stop sending people’s full Social Security numbers through the mail.”
California’s spike in suspected fraud coincided with a sharp increase in claims for Pandemic Unemployment Assistance, a federal program for selfemployed and other people who can’t get state unemployment. The EDD was receiving an average of 200,000 new PUA claims per week in July through midAugust. Over the past three weeks, new PUA claims jumped from 223,000 to 345,000 to 524,000.
PUA is more susceptible to fraud than regular state unemployment. When laidoff employees file for state unemployment, the EDD can verify their claim against payroll records and their former employer. But there are no payroll records for selfemployed people; claimants merely have to self-certify they lost work because of the coronavirus.
On May 26, the inspector general for the U.S. Department of Labor warned that a state’s “reliance on selfcertifications alone to ensure eligibility for PUA will lead to increased improper payments and fraud.”
Also, when someone qualifies for state unemployment, their benefits begin the week they applied, even if they got laid off earlier. Those who want an earlier start date must contact the EDD, which is no small task.
By comparison, when someone qualifies for PUA, their benefits begin the week they said they lost work because of the coronavirus, which could be as far back as Feb. 2, regardless of when they apply. The EDD had been paying retroactive PUA benefits automatically to anyone who qualified. All unemployment benefits for weeks from April through July included an extra $600 per week in federal assistance.
On Thursday, the EDD said it is “no longer automatically backdating new PUA claims in order to stop perpetrators from targeting earlier months when federal stimulus payments were available.” It added that “legitimate PUA claimants who believe their claim should be backdated” should contact EDD. They can submit an inquiry online by going to https://askedd.edd.ca.gov and using the dropdown menus to select “Unemployment Insurance Benefits,” then “Claim Questions,” then “Backdate the Effective Date of my Claim Due to COVID19.” Or they can call EDD at 8339782511 or 8003005616.
It also said it “has shut down multiple claim situations (at a single address) following key identified patterns. These situations are believed to be fraud, and scammers will often try to intercept, redirect or gather mail associated with these claims.” In an email, EDD spokeswoman Loree Levy said, “There are legitimate cases of multiple workers at the same address who don’t fall into such patterns and those will continue.”
EDD stressed that it will not send representatives to your home and asked anyone who receives EDD mail “that doesn’t pertain to you” to send it to EDD, P.O. Box 826880, MIC 43, Sacramento, CA 942800225. Alternatively, you can write “Return to Sender” on the envelope and give it to your mail carrier. Envelopes that may contain debit cards have a return address in Tennessee.
California’s spike in suspected fraud coincided with a jump in claims for Pandemic Unemployment Assistance.