Notorious killers among thousands of inmates' names used in huge CA unemployment scam

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Some of California’s most notorious serial killers were among thousands of prisoners and inmates on the receiving end of coronavirus unemployment benefits paid out by the state, a shocking scam costing taxpayers hundreds of millions of dollars, if not more.

In what’s being called "the most significant fraud on taxpayer funds in California history," investigators said Tuesday the claims were filed under names of thousands of jail and prison inmates, including many infamously on death row: Cary Stayner, a serial killer who murdered four women near Yosemite National Park in 1999, Scott Peterson, convicted of killing his wife and unborn son in 2002, and convicted serial killer Wayne Ford, who murdered at least four women in 1997 and 1998 in Northern California.

"Tens of thousands of inmates, local, state and federal institutions all involved," Sacramento County District Attorney Anne Marie Schubert said in a press briefing Tuesday. "Every type of inmate that you can conceivably think of. Murderers doing life or life without the possibility of parole. Rapists serving hundreds of years of a sentence or perhaps life as well. Child molesters. Serial killers and other murderers sitting on California’s death row."

Convicted murderer Scott Peterson is escorted by two San Mateo County Sheriff deputies as he is walked from the jail to an awaiting van March 17, 2005 in Redwood City, California.
Convicted murderer Scott Peterson is escorted by two San Mateo County Sheriff deputies as he is walked from the jail to an awaiting van March 17, 2005 in Redwood City, California. Photo credit Justin Sullivan/Getty Images

Investigators have uncovered about $400,000 paid to death row inmates, so far.

Schubert speculated the total "may well amount to upwards of $1 billion."

In most cases, officials said payments were sent as prepaid debit cards to addresses listed on the unemployment applications and later deposited into inmates’ accounts. It's not clear if the inmates completed the applications themselves or whether they actually received the money.

In other examples, the payments were mailed directly to the institutions.

"With this fraud, it means that victims victimized by these inmates are not getting the restitution that they so deservedly have been owed," Schubert said.

Several California DAs - including some from the Bay Area - sent Gov. Gavin Newsom a letter outlining the charges, asking for "significant resources" in the ongoing investigation. The governor on Tuesday directed the state’s Office of Emergency Services to create a task force in coordinating efforts.

San Mateo County District Attorney Steve Wagstaffe said investigators discovered the scam this past July inside a local jail.

"They would file from the jail," he told KCBS Radio. "They would file their applications with EDD. EDD required that you have an account at a bank where they could do a direct deposit of the money. Then, somebody on the outside would go get the money for you and then would have the money there. So, a couple of our people got out while this was all pending and then completed whatever sentence they were doing inside. One of them took a trip to Las Vegas."

The state’s continuing issues with unemployment claims during the coronavirus pandemic have been glaring.

Last month, officials said California’s Employment Development Department is working on getting unemployment checks to those who are waiting, but the backlog won’t be resolved until late January. The COVID-19 pandemic put more than 12 million Californians out of work, and the crisis overwhelmed the department, causing outrage from both applicants and lawmakers.

Just last week, a state audit revealed the EDD sent about 38 million mailings containing full social security numbers of recipients, putting many at risk for identity theft.