Gov. Newsom on defense over hundreds of millions in alleged EDD fraud paid to convicted criminals

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A prison unemployment fraud scheme that's resulted in hundreds of millions of dollars in improper payments to convicted criminals has Governor Gavin Newsom on the defense.

So far, according to officials, state investigators have found $400 million paid on some 21,000 unemployment benefit claims improperly filed in the names of California prison inmates.

State lawmakers are demanding legislative hearings over the massive fraud.

In a letter to a number of District Attorneys across the state, Newsom says the EDD implemented new security measures in early September after an uptick in suspicious claims. He adds that most of the fraud involved the federal Pandemic Unemployment Assistance program, aimed at quickly giving benefits to contractors and gig workers; allowing a self-certification process that was exploited. 

“While this helped many individuals in need during this pandemic, bad actors took advantage of the crisis to abuse the system,” Newsom said in the letter.

According to the Sacramento Bee, EDD is working with the Department of Corrections and Rehabilitation and the U.S. Department of Labor to crosscheck unemployment claims against state prison rolls to stop fraudulent payments, according to the letter.