‘The Next Wave’ of CA’s EDD fraud | #phishing | #scams


Mike Holm had a diabetic ulcer on his foot. It had been there too long.”I’ve had both my knees replaced. So that knee on that, on the left leg became infected due to the infection in the foot,” Holm said, sitting in his Rocklin home. He was in the hospital for nearly a month and in a nursing care facility for another month just to heal. For a man who had coached JV football at the powerhouse Whitney High School, sitting still wasn’t easy. “Yeah, it was hard, because I missed the last three games. And then, of course, our varsity team had a great run, beating Folsom and going through the playoff,” Holm said, pointing to the pictures of his teams on the wall of his home.Holm like hundreds of thousands of other Californians had gone on disability. It started well.”I ended up receiving four checks,” Holm said while pouring through the paperwork. “Then everything was just cut off.”How to watch KCRA 3 Investigates documentary: ‘Easy Money: The New Wave’Holm was caught in a wave – a new wave – of EDD fraud. The fraud, once again, was not limited to one place. The offices of Jim Patterson, (R) – Fresno, were inundated with calls. “We were hit with a wave of people calling our office,” Patterson said. “These were mothers with children. These were people who were getting disability, these were legitimate claims. And they were just cut off, and they were in desperate circumstance.”The wave overtook the people in most desperate need in California, but also swept up doctors in its wake as well. “A lot of people, especially physicians, a lot of doctors that had it,” Elk Grove Assemblyman Jim Cooper said. “It comes back to this is white-collar crime. It’s much safer than dealing drugs, robbing a bank, or breaking into someone’s house because the penalties are less severe.”Mike Holm had waited so long that he took things into his own hands. When he was finally able to walk, he went to the EDD office. He waited in line with anywhere from 30 to 40 people, all in the same shape as he was.”Some people worse,” Holm said. “One gentleman I was talking to, he was the number one in line. It was his 15th time down there since he was able to physically go down there. Because he had a spinal cord injury who hasn’t been receiving anything since August.””It’s heartbreaking when you heard a mom with a newborn, or somebody who’s on disability, who can’t maybe isn’t mobile, maybe he’s been hurt. And they’re having a real tough time because they’ve been cut off. And now the rents due, they, you know, they got to pay for their food, they got to live a life. And they’re nearly destitute as a result of it,” Patterson said.”We’ve been closely monitoring our systems, obviously, and noted this kind of activity hitting our fraud indicators,” said EDD spokesperson Loree Levy. “So we were able to take action fairly quickly to minimize some of the impacts.”| MORE | Easy Money: Fraud, Fortune and Failures. A KCRA 3 Investigates documentaryEDD starts freezing accountsBut the department cut off hundreds of thousands of accounts. By January of 2022, EDD had frozen more than 345,000 disability accounts. In an email to KCRA 3, a department spokesperson said that they were waiting to verify 27,000 doctors’ credentials.Meanwhile, people continued to show up at the EDD offices in Northern California – a problem compounded by the fact that only two offices in the area offer services for disability claims: Stockton and Sacramento. Many of the people in line traveled miles and miles to wait in line, ultimately to get no answers.”They said is because some fraud went on,” said one person in line. “I was telling them, I get that there has been fraud, but before that, my benefit was good.”Another added, “they just stopped everything and it has been since November.”Like the first wave of fraud, hitting the Unemployment Insurance and Pandemic Unemployment Assistance Programs, letters started showing up in mailboxes.”I received official notice from … the disability department saying that they needed some information because my disability insurance claim is being looked at,” said Yolo County resident Violetta Corral. “I sat there and I thought, No, I didn’t file a disability claim I’m still employed.”Others got letters saying they’d applied for disability…but they were self-employed. None of those people were disabled or asked for benefits. Still, like the first wave too, when they called to report fraud, they were on hold or hung up on by the automated EDD system.”It is deja vu. Absolutely,” Cooper said. “It shouldn’t happen that way. They had the experience to get it right the first time. And they should have seen this coming. And it’s time and time again. They’re going to infiltrate the weakest point. And with the way EDD is set up, it is the weakest point in the state government.”Mike Holm, in Rocklin, survived by setting up a GoFundMe page. Friends and members of their church donated money. Without the help of others, he says he would never have survived. “There’s a sense of pride there and you have to put your pride aside. And luckily … a lot of people helped us out and we count our blessings every day that we have the support from the church and through friends and family that I know some people probably don’t have,” he said.Lawmakers step in to helpHolm got help through Cooper’s office, getting four checks paid within weeks. It’s something that Patterson saw firsthand and says that the EDD initially wouldn’t even let his office help. “We basically stepped in and insisted that if you can’t do this for our people, we will,” Patterson said, angrily, from his office at the Capitol Swing Space in Sacramento. “That’s exactly what we did. They wouldn’t accept our help at first, but we made a nuisance of ourselves and they finally relented, and we were able to clear these in weeks rather than months and months.”Lawmakers like Cooper and Patterson don’t see it as luck that people like Mike Holm got help. They see it as a dysfunctional department that still has not learned the lessons thrust upon them by the COVID-19 pandemic.”You would have thought having that the UI, debacle they would have got the training in their sea legs with that, when in fact they didn’t. This is the same thing, just disability insurance,” Cooper said. “So those same stopgaps should have been in place and really weren’t. So it’s just, it’s just, it’s frustrating.”

Mike Holm had a diabetic ulcer on his foot. It had been there too long.

“I’ve had both my knees replaced. So that knee on that, on the left leg became infected due to the infection in the foot,” Holm said, sitting in his Rocklin home. He was in the hospital for nearly a month and in a nursing care facility for another month just to heal.

For a man who had coached JV football at the powerhouse Whitney High School, sitting still wasn’t easy.

“Yeah, it was hard, because I missed the last three games. And then, of course, our varsity team had a great run, beating Folsom and going through the playoff,” Holm said, pointing to the pictures of his teams on the wall of his home.

Holm like hundreds of thousands of other Californians had gone on disability. It started well.

“I ended up receiving four checks,” Holm said while pouring through the paperwork. “Then everything was just cut off.”

Victor Nieto, KCRA

Mike Holm at his Rocklin House

Holm was caught in a wave – a new wave – of EDD fraud.

The fraud, once again, was not limited to one place. The offices of Jim Patterson, (R) – Fresno, were inundated with calls.

“We were hit with a wave of people calling our office,” Patterson said. “These were mothers with children. These were people who were getting disability, these were legitimate claims. And they were just cut off, and they were in desperate circumstance.”

The wave overtook the people in most desperate need in California, but also swept up doctors in its wake as well.

“A lot of people, especially physicians, a lot of doctors that had it,” Elk Grove Assemblyman Jim Cooper said. “It comes back to this is white-collar crime. It’s much safer than dealing drugs, robbing a bank, or breaking into someone’s house because the penalties are less severe.”

Mike Holm had waited so long that he took things into his own hands. When he was finally able to walk, he went to the EDD office. He waited in line with anywhere from 30 to 40 people, all in the same shape as he was.

“Some people worse,” Holm said. “One gentleman I was talking to, he was the number one in line. It was his 15th time down there since he was able to physically go down there. Because he had a spinal cord injury who hasn’t been receiving anything since August.”

“It’s heartbreaking when you heard a mom with a newborn, or somebody who’s on disability, who can’t maybe isn’t mobile, maybe he’s been hurt. And they’re having a real tough time because they’ve been cut off. And now the rents due, they, you know, they got to pay for their food, they got to live a life. And they’re nearly destitute as a result of it,” Patterson said.

“We’ve been closely monitoring our systems, obviously, and noted this kind of activity hitting our fraud indicators,” said EDD spokesperson Loree Levy. “So we were able to take action fairly quickly to minimize some of the impacts.”

| MORE | Easy Money: Fraud, Fortune and Failures. A KCRA 3 Investigates documentary

EDD starts freezing accounts

But the department cut off hundreds of thousands of accounts. By January of 2022, EDD had frozen more than 345,000 disability accounts. In an email to KCRA 3, a department spokesperson said that they were waiting to verify 27,000 doctors’ credentials.

Meanwhile, people continued to show up at the EDD offices in Northern California – a problem compounded by the fact that only two offices in the area offer services for disability claims: Stockton and Sacramento. Many of the people in line traveled miles and miles to wait in line, ultimately to get no answers.

“They said is because some fraud went on,” said one person in line. “I was telling them, I get that there has been fraud, but before that, my benefit was good.”

Another added, “they just stopped everything and it has been since November.”

Like the first wave of fraud, hitting the Unemployment Insurance and Pandemic Unemployment Assistance Programs, letters started showing up in mailboxes.

“I received official notice from … the disability department saying that they needed some information because my disability insurance claim is being looked at,” said Yolo County resident Violetta Corral. “I sat there and I thought, No, I didn’t file a disability claim I’m still employed.”

Others got letters saying they’d applied for disability…but they were self-employed. None of those people were disabled or asked for benefits. Still, like the first wave too, when they called to report fraud, they were on hold or hung up on by the automated EDD system.

“It is deja vu. Absolutely,” Cooper said. “It shouldn’t happen that way. They had the experience to get it right the first time. And they should have seen this coming. And it’s time and time again. They’re going to infiltrate the weakest point. And with the way EDD is set up, it is the weakest point in the state government.”

Mike Holm, in Rocklin, survived by setting up a GoFundMe page. Friends and members of their church donated money. Without the help of others, he says he would never have survived.

“There’s a sense of pride there and you have to put your pride aside. And luckily … a lot of people helped us out and we count our blessings every day that we have the support from the church and through friends and family that I know some people probably don’t have,” he said.

Lawmakers step in to help

Holm got help through Cooper’s office, getting four checks paid within weeks. It’s something that Patterson saw firsthand and says that the EDD initially wouldn’t even let his office help.

“We basically stepped in and insisted that if you can’t do this for our people, we will,” Patterson said, angrily, from his office at the Capitol Swing Space in Sacramento. “That’s exactly what we did. They wouldn’t accept our help at first, but we made a nuisance of ourselves and they finally relented, and we were able to clear these in weeks rather than months and months.”

Lawmakers like Cooper and Patterson don’t see it as luck that people like Mike Holm got help. They see it as a dysfunctional department that still has not learned the lessons thrust upon them by the COVID-19 pandemic.

“You would have thought having that the UI, debacle they would have got the training in their sea legs with that, when in fact they didn’t. This is the same thing, just disability insurance,” Cooper said. “So those same stopgaps should have been in place and really weren’t. So it’s just, it’s just, it’s frustrating.”



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