Timeline: From backlogged claims to billions lost, a look at the EDD

Local News

SACRAMENTO, Calif. (KTXL) — California’s unemployment agency has reportedly lost nearly $32 billion to fraud since the pandemic began in 2020. 

As Californians began to lose their jobs during the pandemic, the Employment Development Department expected to handle a large number of claims and made some adjustments to address them.

But as time went on, residents seeking unemployment benefits said they waited weeks before seeing a payment, and reports of fraud and abuse began to be seen across California. 

Investigators say they have linked fraudulent claims to inmates in state prisons, local jails and even out-of-state inmates.

Law enforcement also uncovered suspected EDD fraud in unrelated investigations. 

While executing a search warrant, Davis police say they had expected to find fentanyl at a home but also found evidence of suspected fraud. 

Meanwhile, investigations actually aimed at uncovering fraud have spanned several counties, with multiple county district attorneys working together. 

In Los Angeles, police had even arrested a rapper who made a music video alleging he had “gotten rich off of EDD.”

Since then, law enforcement has arrested at least eight people in the region on suspicion of EDD fraud, one of whom was a former EDD employee. 

The Department of Justice identified that former EDD employee as Andrea Gervais of Roseville. In one instance, Gervais allegedly used the identity of a sitting U.S. senator and was able to obtain a Bank of America debit card in the senator’s name.

The extent of the fraud plaguing the unemployment agency became apparent in February when people began to receive their tax forms.

“We are nowhere near the end of this particular fraud,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center, a nonprofit that helps victims of identity theft.

Click or tap here for information on what to do if you are a victim of unemployment fraud.

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