California paid up to $1 billion in fraudulent unemployment claims to prisoners — including death row inmates

News & Politics

California taxpayers have been bilked out of hundreds of millions of dollars — possibly even $1 billion — this year, that went to jail and prison inmates through fraudulent unemployment claims filed as part of the state’s pandemic relief system.

Murderer Scott Peterson, convicted in 2004 of killing his pregnant wife Lacy, was one of the recipients, according to prosecutors.

What are the details?

Widespread job losses amid the coronavirus pandemic spurred governments to act quickly in making financial relief available for those struggling financially. But in the rush, critical fraud prevention measures were missed, and in California, prisoners and their loved ones were able to take advantage.

The Los Angeles Times reported on the massive racket conducted through California’s Employment Development Department, which was revealed through a letter from nine district attorneys and a federal prosecutor who wrote to Gov. Gavin Newsom (D), urging him to put an end to the loopholes.

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The newspaper reported:

So far, investigations have uncovered more than $400,000 in state benefits paid to death row inmates, and more than $140 million to other incarcerated people in California’s 35 prisons, according to [Sacramento County Dist. Atty. Anne Marie] Schubert. In total, payments to those ineligible due to incarceration in prisons and jails could total nearly $1 billion, the prosecutors claim.

Schubert told the Times, “The murderers and rapists and human traffickers should not be getting this money. It needs to stop.”

But the prosecutors noted that the huge racket was not as simple as incarcerated individuals filing their own applications for relief funds, although some purportedly did just that. The New York Post reported that “the alleged con took many forms: some claims were submitted directly by inmates or by their family and friends, while other prisoners were unwitting victims.”

Anything else?

Authorities believe prison gangs may also be involved in some instances of large-scale, organized scams to rake in jobless claims.

Peterson’s attorney claims his client was not involved in any fraud, and that we was unaware of the accusations by the prosecutors. Other notorious convicts named as recipients of the unemployment funds include death row inmates Cary Stayner, a serial killer, and Isauro Aguirre, who tortured and killed an 8-year-old boy.

Newsom issued a statement thanking the district attorneys “for their commitment to resolving this issue,” according to The New York Times.

“Unemployment fraud across local jails and state and federal prison is absolutely unacceptable,” said the governor, who announced his own task force to aid district attorneys and coordinate state anti-fraud efforts.

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