EDD fraudulent accounts total $ 20 billion

An estimate of $ 11 billion paid by the California Department of Employment Development (EDD) to fraudsters has nearly doubled. The fraud began in 2020 as stacks of envelopes began appearing in mailboxes across California and the United States. people who have never lived there. Initially, EDD gave no estimate. In fact, in a previous legislative hearing, former director Sharon Hilliard told lawmakers she did not keep track of this data. In January, following two state audits on dysfunctions within the department, the EDD gave a very broad first estimate. That was for $ 11.9 billion paid, with a possibility that it could reach $ 30 billion. In a joint hearing of members of the Assembly and Senate on Monday, the director of EDD answered questions with the California state auditor. Part of this questioning brought the new amount of fraud. EDD Director Rita Saenz answers questions from Irvine Assm. Cottie Petrie-Norris said: “of the $ 177 billion that has been paid, $ 20 billion is estimated to be fraudulent.” Assembly member Tom Lackey, R-Palmdale, started the hearing with a visual aid showing 11 dump trucks full of cash. EDD has put the blame, primarily, on criminal gangs and organized crime. “I have spoken to a number of unemployment managers across the country. There is not a single department that has not been faced with a large number of fraudulent claimants,” Saenz said. Lackey was not convinced. Lawmakers also asked about another looming issue: the state unemployment trust fund. With so many people unemployed due to COVID-19, the trust fund ran a deficit of nearly $ 20 billion. This means that the State of California has taken out loans from the federal government in this amount. These loans will have to be repaid, not by the state but by state enterprises. Most of these companies will see these taxes come from the federal government in January 2023. Yet EDD has implemented about 60% of the auditor’s recommendations, including the phased introduction of new computer systems over time. This, however, drew a stern warning from State Auditor Elaine Howle, who said we must proceed with caution. Entrepreneurs often ask for wishlists of other items to go along with their programming, things that can run into billions of dollars in cost, where the system needs major upgrades right now. Call centers have also improved, with average wait times of around 18 minutes, according to Saenz. She added that often robocalls and repeat calls overwhelm their system. A number of these recommendations were also enacted by the legislature, which means that they now have the force of law. This means that if EDD does not implement the changes, including things like crossing prisons and prisons, raising awareness among people of multiple languages, and removing the social security number from EDD correspondence, the department will violate. state law. fraud, EDD says they are investigating 700 fraud cases across the state. However, police departments KCRA 3 Investigates spoke to across California say they have hundreds of cases of their own. The problem they have is prosecuting them for EDD fraud because, they say, EDD has not given them the cooperation or documentation to properly charge and prosecute these people for EDD fraud.

An estimate of $ 11 billion paid by California’s Employment Development Department (EDD) to fraudsters has almost doubled.

The fraud began in 2020 when stacks of envelopes began appearing in letterboxes in California and the United States. The addresses were correct but the names were of people who have never lived there. Initially, EDD gave no estimate. In fact, in a previous legislative hearing, former director Sharon Hilliard told lawmakers she did not keep track of this data.

In January, following two state audits on dysfunctions within the department, the EDD gave a very broad first estimate. That was for $ 11.9 billion paid, with a possibility that it could reach $ 30 billion.

In a joint hearing of members of the Assembly and Senate on Monday, the director of EDD answered questions with the California state auditor.

Part of this questioning brought the new amount of fraud. EDD Director Rita Saenz answers questions from Irvine Assm. Cottie Petrie-Norris said: “of the $ 177 billion that has been paid, $ 20 billion is estimated to be fraudulent.”

Assembly member Tom Lackey, R-Palmdale, started the hearing with a visual aid showing 11 dump trucks full of cash. EDD has put the blame, primarily, on criminal gangs and organized crime.

“I have spoken to a number of unemployment managers across the country. There is not a single department that has not been faced with a large number of fraudulent claimants,” Saenz said.

Lackey was not convinced.

Lawmakers also asked about another looming issue: the state unemployment trust fund. With so many people unemployed due to COVID-19, the trust fund ran a deficit of nearly $ 20 billion.

This means that the State of California has taken out loans from the federal government in this amount. These loans will have to be repaid, not by the state but by state enterprises. Most of these businesses will see these taxes come from the federal government in January 2023.

Yet EDD has implemented around 60% of the auditor’s recommendations, including the gradual introduction of new IT systems over time. This, however, drew a stern warning from State Auditor Elaine Howle, who said we must proceed with caution. Entrepreneurs often ask for wishlists of other items to go along with their programming, things that can run into billions of dollars in cost, where the system needs major upgrades right now.

Call centers have also improved, with average wait times of around 18 minutes, according to Saenz. She added that often robocalls and repeat calls overwhelm their system.

A number of these recommendations were also enacted by the legislature, which means that they now have the force of law. This means that if EDD does not implement the changes, including things like cross-referencing between prisons and prisons, raising awareness among people of multiple languages, and removing the social security number from EDD correspondence, the department will violate state law.

As for fraud, EDD says they are investigating 700 cases of fraud across the state. However, police departments KCRA 3 Investigates spoke to across California say they have hundreds of cases of their own. The problem they have is prosecuting them for EDD fraud because, they say, EDD has not given them the cooperation or documentation to properly charge and prosecute these people for EDD fraud.


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