"The Most Significant Fraud on Taxpayer Funds in California History.”

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We're familiar with the reports of prisoners running drug rings and scamming the IRS out of tax refunds. But the new honey-pot is the unemployment benefits enlarged by coronavirus aid.

Headline: Prisoners’ fake unemployment claims cost state hundreds of millions, California D.A.s say [bold added]

The officials said the stolen money amounted to hundreds of millions of dollars and that the fraudulent claims were paid out falsely using the names of tens of thousands of local, state and federal inmates.

Documented cases of fraud in jails and prisons in the past have seen inmates file false claims using their own Social Security numbers, with unincarcerated accomplices receiving the money. Some scammers may also have ripped off Social Security numbers sent through the mail, undisguised, by the state’s Employment Development Department.

Other schemes may have involved online identity theft, the letter said. The district attorneys cited media reports of criminals obtaining personal information from the internet and using it to file claims under the names of unwitting people.

“The word I’ve used is behemoth. This is massive. There is money going out of this state; there is money going out of this country,” said Sacramento County District Attorney Anne Marie Schubert, whose office is part of the investigation, during a news conference Tuesday.

Schubert said the scams are ongoing and that attempts to work with top officials at the EDD have been unsuccessful.

Schubert said 35 other states have systems that cross-check inmate data with unemployment claims, but California does not. “We need to do what other states are doing,” she said.

The State of California likes to brag about its technological prowess. However, it's clear that the skills lie with the private sector. Want another example? [bold added]

The state auditor sharply criticized the EDD in a report last week for sending out at least 38 million pieces of mail with undisguised Social Security numbers, despite being warned about the practice.

Q.E.D.