California improperly approved $400M in unemployment benefits for prisoners
One California district attorney named serial killers who received benefits
California improperly paid at least $400 million in unemployment claims to prisoners, according to state officials investigating the matter.
Nine district attorneys and one federal prosecutor are looking into the California Employment Development Department's approval of some 20,000 unemployment claims filed by prisoners at local, state and federal institutions as the agency tried to quickly deploy coronavirus aid to state residents in need.
Sacramento County District Attorney Anne Marie Schubert first announced the scheme during a news conference last week, during which she said the fraud could total up to $1 billion as investigations continue.
Someone completing an unemployment benefits form. (iStock)
Schubert directly named serial killers and prisoners on Death Row who received the unemployment benefits.
"The breadth of this fraud is massive," Schubert said. "The aggregate combined ... could be in the hundreds of millions of dollars of theft from legitimate people that so desperately need it."
HUNDREDS OF COMPANIES THAT GOT STIMULUS AID HAVE FAILED
California, unlike 35 other states, did not accept federal aid that would have helped the state update technology to cross-examine unemployment claims with prison populations.
That $400 million figure includes initial federal benefits of $450 per week, as well as additional benefits of $600 per week for four months and $300 a week for six weeks after that. In total, about 31,000 prisoners filed claims, though only 20,800 prisoners actually received the benefits, said Crystal Page, spokeswoman for the California Labor and Workforce Development Agency.
PAYMENT PROTECTION PROGRAM FRAUD ACCUSATIONS CONTINUE TO GROW
John Cox, a business owner and founder of C.H.A.N.G.E. CA, a project of the nonprofit Rescue California Educational Foundation, said the $400 million flub is just one mistake in a series of many -- such as a $2.7 billion loss in state funding that was supposed to go toward affordable housing -- due to the state's mismanagement, and has called for Newsom to resign.
"Store Closing" signs are posted at a "Sur La Table" kitchenware store as people enter on September 22, 2020, in Los Angeles, California. (Photo by VALERIE MACON/AFP via Getty Images)
"These politicians are just not accountable anymore, and there's got to be a backlash at some point, I hope," Cox said. "In the private sector ... if there were a major business out there that had mistakes and blowups like this, the board of directors would instantly say, 'Hey guy, sorry, you're gone. We have to change management because our shareholders are not going to put up with this.' Where is the accountability in California?"
Cox said "taxpayers are basically the shareholders of the economy," and Newsom has been put in charge of the fifth-largest economy in the world.
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"This is the tip of the iceberg," Cox said. "If we really looked at what's going on in California, I'm here to tell you that the mismanagement and fraud and spending in the spending in this state have got to be mammoth. These are the ones that came to light. Think of all the other schemes going on that haven't come to light."
For the average Californian, he added, the mismanagement means higher taxes.
"What does this mean to the average Californian? Taxes in this state are the highest in the 48 mainland states. We have the highest taxes in the country and the highest poverty rate, and one of the reasons for that is because of the mismanagement. All these taxes have to be paid by somebody. Well, guess what? They're mostly passed along to consumers," he said.