California Inmates Receive More Than $140 Million in Fraudulent Unemployment Claims
California is investigating one of the biggest fraudulent unemployment cases in its history. Over $140 million in fraudulent unemployment claims have been filed by inmates in state prisons and county jails across the state.
Governor Gavin Newsom has come under fire by the district attorneys of nine California counties. The District Attorneys wrote a letter to the governor urging the investigation into the over 35,000 fraudulent claims that have been made. Over half of the claims were paid out, with one claim being as high as $48,000. There have been an astounding 158 claims filed on behalf of 133 inmates currently serving sentences on death row. The highest payout to an inmate on death row has been almost $20,000.
Some of the inmates who filed for unemployment include high-profile individuals, including death row inmate Scott Peterson who was convicted of murdering his wife and unborn child, as well as serial killer Cary Stayner, and Isauro Aguirre, who was convicted of killing an eight-year-old child. Though it's not clear how many inmates filed and received a payment, the attorney for Scott Peterson has stated that Peterson himself did not file the claim and has not personally received any money.
Fraud Uncovered through Prison Recordings
Officials were tipped off to the fraudulent claims through recorded prison phone calls in which inmates bragged about how they obtained the unemployment benefits. There are even amateur rappers who recorded songs and music videos bragging about the ways they were beating the system. One YouTube rapper, Fontrell Antonio Baines, 31 who went by the stage name "Nuke Bizzle," applied for more than $1.2 million in aid under the CARES act and publicly bragged about it on social media.
In the recorded prison phone calls, a consistent theme among inmates who received the benefits was that someone on the outside helped facilitate the application process so that the inmates could get paid. In Kern County, where there are five state prisons, there were 16 inmates who filed claims associated with one address. The Kern County District Attorney Cynthia Zimmer said that in her almost 40 years of working as a prosecutor for the state, she has never seen fraud at such a massive level.
Anne Marie Schubert, the Sacramento County district attorney, adds that the massive fraud was able to take place because of dysfunction and disorganization at the California Employment Development Department (EDD). According to Schubert, unlike many other states across the nation, the EDD does not check the names of unemployment claims against names of prison inmates. Schubert adds "Quite frankly, the inmates are mocking us," referring to the inmates and those on the outside who publicly bragged about receiving unemployment benefits.
Once the fraudulent payments came onto the radar of officials, the EDD said it could not stop the payments until the inmates were charged with a crime.
Disorganization and an Overwhelmed System to Blame
The widespread fraud is being blamed on the lack of organization in the EDD as well as a substantial increase in claims because of the pandemic. Since March, more than 16.4 million claims have been filed. At one point, the backlog was over 1.6 million people.
Governor Newsom has responded to the fraudulent claims through a statement issued to NBCLA news. The statement read in part, "Unemployment fraud across local jails and state and federal prisons is absolutely unacceptable. Earlier this year, I launched a strike team to expedite unemployment payments and to minimize abuse of the system.” Newsom added, “We will continue to fully partner with law enforcement and direct as many resources as needed to investigate and resolve this issue speedily.”
