$20 billion has been given to criminals by the state of California. It is more than 11% of all the money paid since the start of the pandemic. Officials blamed most of the fraud on a change in the law that let self-employed people get weekly checks from the government. There were not many checks to stop people from getting benefits that were not eligible.
“I don’t think people have realized that a lot of money has been issued to people who don’t deserve it,” Tom from Palmdale said. He brought 29 dump trucks filled with $100 bills, about half of the money lost to fraud. Many people in the United States got money that they did not deserve when they said that they were unemployed. The fraud was spread across many states, and in some states, scammers took 30% of what people were getting.
In California, there were so many cases of fraud that the state approved at least $810 million in benefits for people who were in prison. Some of these prisoners are on death row, and the state sent them up to $21,000 in benefits. One address even received some of the $2 million that were a part of this fraud.
Governor Newsom’s administration tries to help people who want to find a job and keep their money. The state has put new software to block fraud attempts and stop 120 billion dollars from being stolen. Saenz told lawmakers on Monday that 2020 was an anomaly. Saenz said it was like a criminal assault on the unemployment insurance program. She said, “We stopped that type of fraud last year.”
In January, state officials said that the fraud could be as high as $31 billion. But now they say it is only $20 billion. The Newsom administration has hired former U.S. Attorney McGregor Scott to help prosecute spammers, and investigations are going on right now.
But the Department still has some problems. When people apply for unemployment benefits, sometimes their information is different than what their former employer filed. When this happens, state officials have to interview these people to resolve those issues.
People wait up to 6 months for interviews. Saenz said this was not acceptable. But she said that the state has a new policy. If people get an interview, they will get their money while they wait for the interview. About half of the people who are waiting have been paid in this way already.
She said that things are not improving fast enough for some people. There are still some challenges ahead.
Since the start of the covid-19 pandemic, California has spent a lot of money. They have spent over $178 billion. That is four times as much as they spent from the worst two years from the Great Recession 10 years ago.
The number of claims made overwhelmed the Department, which created a big backlog of answers. The Department did not stop fraud for the first four months of the pandemic. The Newsom administration was blamed for this because they did not do much to stop it.
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The auditor’s office said the Division had completed 13 of its 21 recommendations. EDD has made a lot of progress. We found some trouble spots at the audit, but they have worked hard to fix those problems. EDD still needs to find a way to make sure these new changes keep happening.
The Department of Audits did not miss any deadlines (the time to make changes). The Department is hiring new people for the Department’s newly formed group that does investigations related to fraud. The Department is working with a new system that will put people’s unemployment benefits in their bank account. But it will take a few years.
Some lawmakers were worried when they heard about the delay. They said people might be losing faith in their country. “When a government agency fails, I think it breaks the public trust,” said Assemblywoman Cottie Petrie-Norris. She’s a Democrat from Laguna Beach.
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