Santa Clara County DA logoThe Santa Clara County District Attorney’s Office has launched an effort to clamp down on a major new rise in unemployment benefits fraud, especially scams perpetrated by inmates in county jail.

This statewide fraud trend is estimated to cost California hundreds of millions of taxpayer dollars. One of the suspected main engines of the local fraud are organized rings involving numerous inmates within Santa Clara County Jail. In just one case alone in the County, an individual is suspected of defrauding the State’s Employment Development Department out of approximately $12 million.

No charges have been filed yet. However, District Attorney Jeff Rosen said that he has created a team to tackle the problem and expects imminent prosecutions.

“To those who have abused the system during this pandemic: you will be caught and pay the price from stealing from the pockets of the needy,” DA Rosen said. “Fraudulent unemployment claims deny benefits to those who are legally entitled to receive them and who truly are in need.”

Unemployment benefit fraud carries a maximum of three years in state prison and a fine of up to $20,000.

Incarcerated persons are not entitled to receive EDD benefits. This fraud often involves co-conspirators using the inmate’s identifying information to submit an EDD application on the inmate’s behalf. To avoid alerting EDD that the applicant is incarcerated, the accomplice receives and transfers benefit payments back to the inmate. Within the last two months, tens of thousands of local, state, and federal inmates were involved in this fraud, including Cary Stayner, one of California’s most notorious murderers.

As a result, California’s elected district attorneys have created a statewide EDD Fraud Task Force to work with our law enforcement partners to combat this massive fraud. The Santa Clara County District Attorney’s Office is part of the task force which also includes EDD and other district attorney’s offices from Alameda, Contra Costa, Marin, Monterey, Napa, San Benito, Santa Cruz, San Francisco, San Mateo, and Sonoma counties.