DA Schubert weighs in on EDD overhauls in the wake of massive fraud

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SACRAMENTO, Calif. (KTXL) – Following the arrest of a Rio Linda woman suspected of filing fraudulent unemployment claims for prison inmates, Sacramento County’s district attorney says significant overhauls have been taken within the state’s unemployment agency to ensure problems are rectified.

“Are there still people sitting in jails or prisons that are still probably still doing this? Yeah. Pretty sure that’s happening. But I would like to believe it’s nowhere near the magnitude of what we saw before,” said DA Anne Marie Schubert. “Extraordinary amount of work has been undertaken by EDD and Office of Emergency Services, law enforcement, to shut the spigot off. Because the spigot was just like a fire hose. But there has been significant advancements since that time to get the systems in place that needed to be in place.” 

Investigators say the Employment Development Department fraud scheme, since it was uncovered late last year, is estimated to have cost $31 billion.

“That’s an astronomical amount of money that should’ve been going to people that work so hard,” Schubert said. “These thieves are just ripping off the system and taking the money from people who rightfully deserve it.” 

The DA said she’s dedicated a dozen investigators to EDD fraud cases along with a lead prosecutor who is considered the resident expert on prosecution.

“What is changing in a very significant way is moving forward,” she told FOX40.

Schubert says these EDD fraud cases are probably the biggest fraud in U.S. history, considering the magnitude here and in states across the country.

She also said that those crimes translate to much more.

“When you’re putting millions of dollars, flowing into the streets of our community, into the hands of people that don’t follow the law in the first place, what we’re seeing anecdotally is this really high correlation between illegal guns, drugs, gangs and EDD,” Schubert explained. “We’re going to crack down on this. Hopefully, they’re going to realize law enforcement is coming for them if they’re not only going to rip off the system, but they’re going to use that money to perpetuate their crimes.” 

In a statement, EDD told FOX40:

The EDD has been working jointly with the Sacramento County District Attorney’s office in matching unemployment claims data with available inmate data leading to this recent arrest and a number of other cases underway throughout the state.  We have confirmed that about 95% of fraud has occurred in the new federal Pandemic Unemployment Assistance program which scammers have attacked across the country due to the lack of safeguards in this program compared to the regular state unemployment insurance programs. The EDD has taken many steps to fortify the front door to benefits against fraud while we work aggressively with our partners to address past issues and bring offenders to justice.

Loree Levy, Deputy Director EDD Public Affairs Branch

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