State paid $400M in jobless benefits to inmates

SACRAMENTO >> California sent about $400 million in fraudulent unemployment benefit payments to state prisoners, a state official said Tuesday, nearly triple the amount disclosed last week and a number that could grow as a criminal investigation continues.

Nine county district attorneys and a federal prosecutor are investigating unemployment fraud involving payments from the California Employment Development Department, which was under intense pressure to quickly process millions of claims as the economic impact from the coronavirus intensified last spring.

Criminals took advantage by submitting numerous fraudulent claims, many of which were approved by the state. Prosecutors discovered the fraud included inmates working with people outside the prisons and last week estimated $140 million was paid to about 20,000 prisoners between March and August.

But Crystal Page, spokeswoman for the California Labor and Workforce Development Agency that oversees the unemployment office, said a review of records now pegs the figure at about $400 million.

The new number includes not just the base benefits of $450 per week but also additional aid Congress approved during the pandemic — $600 per week for four months plus $300 a week for six weeks after that.

In all, records show benefit claims were submitted in the names of 31,000 inmates. About 20,800 inmates were paid and another $80 million in claims involving the other prisoners were not, according to Page.

The new figure came after comparing jobless claims data with the Social Security numbers of state prison inmates. That part of the investigation was slowed — to the great frustration of prosecutors — because of a state law that forbids the prison system from giving out inmates’ numbers.