California’s unemployment department faces another wave of fraud | #phishing | #scams


California’s embattled Employment Development Department says they have seen yet another wave of fraud attempts. This time, again, hitting unemployment claims.The department said that the latest fraud involved the use of paper and fax claims. EDD said 47,000 claims are potentially fraudulent, with a dollar amount they said could be as high as $560 million. “EDD’s tough new fraud filters thwart a constant stream of new fraud attempts, schemes and criminal tactics” said EDD Fraud Special Counsel McGregor Scott. | VIDEO ABOVE | Here’s how Gov. Newsom responded to questions on EDD fraudScott is not an employee of EDD, he is a paid consultant working for the King and Spalding law firm. “These criminals again tried to pierce the department’s defenses but we stopped them dead in their tracks,” Scott said. KCRA 3 Investigates has been hearing from viewers who have indeed seen this type of fraud. One told us that they received four letters from the EDD in the last week saying that they had filed for unemployment with the last day of work in March. That person never filed for unemployment. “Some Californians may receive multiple notices from EDD if a scammer tried to file multiple claims in their name,” the EDD said in a news release on Thursday. “EDD’s mailed notices are part of its fraud-fighting system and help warn potential identity theft victims that fraudsters are attempting to use their personal information.” Yet this viewer said it took transfers from fraud to the mainline and a lot of time on hold before a representative finally told them they were aware of the fraud. The account was linked to their Social Security Number and personal information. Even so, they were told to wait for yet another notice – making the number of envelopes coming in five – and check a box saying they did not file the claim.| HOW TO WATCH | Easy Money: Fraud, Fortune and Failures. A KCRA 3 Investigates documentaryThis latest fraud may have been stopped by the EDD but it is far from the first attempt. The department paid out more than $20 billion to fraudulent accounts from 2020-2021. While the majority of that was under a new “Pandemic Unemployment Assistance (PUA) Program,” not all of that money was. In addition, the fraud caused delays and a backlog of more than a million claims before the legislature and a state audit pushed for changes within the department. Earlier this year the department got hit with a wave of disability fraud, which the department met by freezing hundreds of thousands of disability claims, leaving injured and sick Californians outside in lines waiting for answers at EDD offices across the state. The fraud perpetrated so far was spelled out in multiple KCRA 3 documentaries, Easy Money, which detailed how fraudsters flooded into California just to get money being paid out by the department.| More Easy Money | How disability scams became ‘the next wave’ of EDD fraudThe department has touted its fraud prevention systems put in place since the pandemic began. Those include ID.Me, a company that provided identity verification. However, ID.Me has come under Congressional investigation for over-inflating their fraud prevention numbers and for allegedly exaggerating the number of fraud cases across the country. They also added the Thomson Reuters Pondera system. It is a system that catches, according to one former employee, “a phenomenal amount of fraud.” However, EDD shut off that system claiming it was too expensive at a cost of $10 million dollars during the Jerry Brown Gubernatorial Administration. They have since added the system back into their fraud prevention.Scott continues to bolster the fraud prevention and prosecution efforts at EDD. This all comes even after the state auditor recommended a separate fraud division be created to tackle fraud. The EDD did create that division, saying they have it fully staffed … with 12 people. KCRA 3 Investigates continues to ask for an updated number of the fraud, which the department insists stands at $20 billion. This, however, comes after former-director Sharon Hilliard said “we don’t track that” when asked about fraud; and an insistence that the amount is PUA fraud. The department still has not given an updated amount of fraud-to-date that includes UI, PUA and Disability fraud.

California’s embattled Employment Development Department says they have seen yet another wave of fraud attempts. This time, again, hitting unemployment claims.

The department said that the latest fraud involved the use of paper and fax claims. EDD said 47,000 claims are potentially fraudulent, with a dollar amount they said could be as high as $560 million.

“EDD’s tough new fraud filters thwart a constant stream of new fraud attempts, schemes and criminal tactics” said EDD Fraud Special Counsel McGregor Scott.

| VIDEO ABOVE | Here’s how Gov. Newsom responded to questions on EDD fraud

Scott is not an employee of EDD, he is a paid consultant working for the King and Spalding law firm.

“These criminals again tried to pierce the department’s defenses but we stopped them dead in their tracks,” Scott said.

KCRA 3 Investigates has been hearing from viewers who have indeed seen this type of fraud. One told us that they received four letters from the EDD in the last week saying that they had filed for unemployment with the last day of work in March. That person never filed for unemployment.

“Some Californians may receive multiple notices from EDD if a scammer tried to file multiple claims in their name,” the EDD said in a news release on Thursday. “EDD’s mailed notices are part of its fraud-fighting system and help warn potential identity theft victims that fraudsters are attempting to use their personal information.”

Yet this viewer said it took transfers from fraud to the mainline and a lot of time on hold before a representative finally told them they were aware of the fraud. The account was linked to their Social Security Number and personal information. Even so, they were told to wait for yet another notice – making the number of envelopes coming in five – and check a box saying they did not file the claim.

| HOW TO WATCH | Easy Money: Fraud, Fortune and Failures. A KCRA 3 Investigates documentary

This latest fraud may have been stopped by the EDD but it is far from the first attempt. The department paid out more than $20 billion to fraudulent accounts from 2020-2021. While the majority of that was under a new “Pandemic Unemployment Assistance (PUA) Program,” not all of that money was. In addition, the fraud caused delays and a backlog of more than a million claims before the legislature and a state audit pushed for changes within the department.

Earlier this year the department got hit with a wave of disability fraud, which the department met by freezing hundreds of thousands of disability claims, leaving injured and sick Californians outside in lines waiting for answers at EDD offices across the state.

The fraud perpetrated so far was spelled out in multiple KCRA 3 documentaries, Easy Money, which detailed how fraudsters flooded into California just to get money being paid out by the department.

| More Easy Money | How disability scams became ‘the next wave’ of EDD fraud

The department has touted its fraud prevention systems put in place since the pandemic began. Those include ID.Me, a company that provided identity verification. However, ID.Me has come under Congressional investigation for over-inflating their fraud prevention numbers and for allegedly exaggerating the number of fraud cases across the country.

They also added the Thomson Reuters Pondera system. It is a system that catches, according to one former employee, “a phenomenal amount of fraud.” However, EDD shut off that system claiming it was too expensive at a cost of $10 million dollars during the Jerry Brown Gubernatorial Administration. They have since added the system back into their fraud prevention.

Scott continues to bolster the fraud prevention and prosecution efforts at EDD. This all comes even after the state auditor recommended a separate fraud division be created to tackle fraud. The EDD did create that division, saying they have it fully staffed … with 12 people.

KCRA 3 Investigates continues to ask for an updated number of the fraud, which the department insists stands at $20 billion. This, however, comes after former-director Sharon Hilliard said “we don’t track that” when asked about fraud; and an insistence that the amount is PUA fraud. The department still has not given an updated amount of fraud-to-date that includes UI, PUA and Disability fraud.



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