California's EDD Fraud Crisis by Alyssa Acuna

 The U.S. Department of Labor estimates that the U.S. has paid as much as $63 billion in improper benefits since the rise of unemployment began last spring following the Covid-19 Pandemic. California has taken the biggest hit with an estimated $11 billion fraudulent payments and $19 billion in flagged accounts. There has been much confusion surrounding the unemployment benefits system and has left many citizens out of work, income, essential needs, and many have fallen victim to one of the largest on-going fraudulent schemes in history.

California Secretary of the U.S. Department of Labor, Julie Su, stated during a January press conference, “California has not had sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.” Many existing balances have been drained by cyber thieves while others have opened false claims on behalf of unsuspecting victims. After passing the CARES Act Relief bill, it has left the online system flawed with loopholes for cyber criminals to target vulnerable citizens. Predators are known to be stealing mail, proof of identification, and duplicating EDD debit cards. Oftentimes, they are even sold on the dark web to other predators in foreign countries such as China, Nigeria, or Russia. Many investigations have also been traced back to inmates behind bars who have worked with accomplices on the outside to use their identification and obtain their EDD benefits and transfer them back into the inmate’s account while also partaking in their own percentage.

Bank of America, who has been administering the billions of benefits being paid out, has also struggled to find new and better ways to control the damage. But unfortunately, they are continuing to lose money, making it impossible to refund the victims whose accounts have been tapped into and wiped. Instead, they are sending generic letters apologizing to those victims searching for answers and struggling to find hope.

As we await the anticipated $1.9-trillion stimulus package to be pushed through this month, it is crucial for everyone to keep an eye out for any strange emails, notifications, or any suspicious people lingering around your street.  Anyone can be a victim. The IRS warns that many people could potentially get taxed on benefits that they never received.  They urge that you dispute it right away and submit an accurate tax return, reporting only the income they received. California victims who suspect that their identity has been compromised, can file a fraudulent unemployment claim by visiting Submit a fraud report. (Links to an external site.)