Jail Inmates Accused of Scamming COVID-19 Unemployment Funds

Santa Barbara authorities are investigating what appears to be a large-scale unemployment fraud scheme carried out by County Jail inmates to receive COVID-19 unemployment assistance.

While the District Attorney’s Office, which is leading the investigation, said it could not comment on the pending inquiry, sources with knowledge of the alleged plot say the ring of inmates ― with help from outside contacts ― successfully filed 143 bogus claims through California’s Employment Development Department (EDD). The exact number of inmates involved and the amount of money stolen is unclear. Charges will likely be filed in the coming weeks.

The caper, sources say, mirrors the one that played out at the San Mateo County Jail over the summer, when 21 inmates secured more than $250,000 in payments from the EDD. Inmates would apply for pandemic unemployment assistance, most commonly through phone calls to a friend or family member, and request the checks be sent to an outside address of their choosing.

The EDD has recently come under fire from legislators who say the state agency is not doing enough to verify claims and guard against scams. California law says a person cannot start receiving unemployment assistance while they are in custody, though a person who was getting unemployment benefits before their arrest is allowed to continue doing so.

The San Mateo district attorney, Stephen Wagstaffe, is in the process of prosecuting all 21 offenders in his jurisdiction ― one of whom is behind bars for murder ― and is working with the state to recover the stolen funds. Wagstaffe told reporters in August the scheme is so simple he wouldn’t be surprised if inmates up and down California have been carrying it out since the EDD started distributing checks in March. The extent of the fraud could be massive, he said.

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