California officials: more than $11 billion in unemployment benefits fear fraudulent claims

California Gov. Gavin Newsom (D).

California may have handed out as much as $11 billion in unemployment benefits to fraudsters, state officials said Monday (Jan. 25).

The California Employment Development Department (EDD) has processed 19.5 million applications and paid out $114 billion in unemployment benefits since the March 2020 pandemic of the Chinese Communist virus (Wuhan pneumonia), according to an official California statement. It is estimated that 10 percent of these payments, or $11.4 billion, have been identified as fraudulent claims.

In addition, 17 percent of those unemployment benefit claims have now been marked as suspicious and are under investigation.

“EDD is now working with some of the nation’s most successful fraud prevention businesses and law enforcement agencies to protect the state’s unemployment benefits system,” said California Labor Commissioner Julie Su. “We know that many Californians are waiting for payments, and EDD is working quickly to validate their claims and get benefits to them.”

Nationwide, 35 percent of unemployment claims are fraudulent, according to, a Virginia-based security firm hired by 21 states to investigate and combat fraud.

“Currently, is stopping approximately $1 billion in fraudulent actions each week among the states we serve,” said Blake Hall, the company’s founder and CEO. “The fraud rate for new claims is at least 35 percent, which is at least 10 times the rate we The fraud rate for new applications is at least 35 percent, more than ten times the rate we see at federal agencies. California should be commended for acting early to screen’s previously filed high-risk applications as quickly as possible to prevent further losses to taxpayers.”

Earlier this month, Hall warned that much of California’s fraudulent claim money is going to foreign criminal organizations that use stolen identity information to file unemployment claims and use U.S. “money mules” to receive debit cards.

“When the Russians, the Nigerians and the Chinese get into the race, they each achieve something,” Hall told the Los Angeles Times, “and it’s a very sophisticated Cyber Attack that’s going on at scale.”

Previous estimates are that the California EDD paid up to $4 billion to fraudsters, including a former EDD employee who used the name and Social Security number of Democratic Sen. Dianne Feinstein (D-Calif.) to collect $21,000 in unemployment benefits. The scam was not uncovered until after Bank of America, which manages EDD’s debit cards, discovered it.

In addition, hundreds of millions of dollars in unemployment benefits went to prisons and prison inmates, many of whom were not incarcerated in California, according to an enforcement task force led by the district attorney.

“The amount of fraud and the types of inmates involved is staggering,” district attorneys wrote in a letter to Gov. Gavin Newsom. They added that death row inmates, inmates serving Life sentences and without the possibility of parole, rapists, child molesters, human traffickers and other violent criminals have all received unemployment checks, and many of those checks have been sent out of state.

According to a December analysis obtained by the Los Angeles Times, more than 2,000 claims considered high or moderate risk of fraud came from inmates in the Florida Department of Corrections or the state’s county jails. Overall, the report estimates that about $42 million went to out-of-state jails and prison inmates.