California prosecutors reveal how Scott Peterson's name may be linked to unemployment scam

SAN FRANCISCO (KGO) -- The ABC7 I-Team is learning new details about widespread EDD fraud seeping through California state prisons and county jails.

Prosecutors revealed this week that tens of thousands of inmates are involved in a scheme stealing upwards of $1 billion worth of unemployment benefits.

RELATED: At least 35,000 CA unemployment claims filed for prison inmates, including Scott Peterson, DA says

Matthew Wilson is outraged.

"I'm down to my last package of ramen," said Wilson. "I'm still struggling and they told me it might be 12 to 14 weeks before it gets reversed."

Wilson is one of tens of thousands of Californians struggling to get unemployment. His claim was flagged as fraudulent last month and he has yet to see a dime.

"I don't know what to do," he said.

Meanwhile, prosecutors in five counties across the state say claims were successfully paid out under the names of tens of thousands of prison inmates across the state since March.

MORE: EDD mistakenly takes $10,000 from SF man's account in attempt to fight suspected fraud

How exactly?

"The information is being shared to people on the outside, so it's not just the inmates that are involved," said Anne Marie Schubert, Sacramento County District Attorney. "It's people on the outside because somebody has to receive the money."

Schubert is one of the lead investigators working on this state-wide case. She explains most inmates are asking partners outside the prison to file unemployment claims with their social security number.

"They can make a phone call to their friends and family, asking can you file on my behalf? We know that's happening because of jail communications," she said.

"They oftentimes can use the jail phones to make the claims," she said. "They can use the contraband phones if they're in prison, which are illegal phones."

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From there the EDD debit cards are sent to addresses that criminals stake out to access the money. In a few rare cases, the money has been sent directly to the prisons.

From March to August, 35,000 claims have been filed in the name of California state prison inmates. This includes the names of 133 inmates on death row, like Scott Peterson.

Stephanie: "Is there any evidence to suggest Scott Peterson was actually involved in this?"

Schubert: "What I would say in general, because there are high profile names that are on the list, clearly the claims were filed under the individual's name."

Schubert also pointed out just because Peterson's name is listed, doesn't prove he's directly involved.

"There's a number of different ways and it's important that people understand that," she said. "Just because John Doe's name was on the list, does not mean John Doe did it himself, it could mean that he was involved...or it could mean that someone else took his identity."

RELATED: 'People need help': As many as 1 in every 3 EDD claims is fraudulent, security firm says

Governor Newsom announced Tuesday the Office of Emergency Services will launch a taskforce to support further investigations by local district attorneys.
State Assemblyman Jim Patterson (R-Fresno) says that's not good enough.

"Mr. Governor, get your head out of the French Laundry and do your job," said Patterson.

Patterson sits on the budget subcommittee overseeing EDD. He believes the agency could be helping facilitate the fraud.

"I think EDD, is sort of a dim-witted accomplice to all of this," he said. "They knew about this. They were warned about this, not just a few months, but years ago by a continuing review of the California state auditor. And they absolutely did nothing."

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While a million workers still can't get unemployment benefits, EDD paid out a quarter million dollars to jail inmates running a scheme behind bars.



Now, people like Wilson are paying the price.

"Thanksgiving is tomorrow, Christmas is a month away and we have people getting evicted...people who had cars and couldn't pay for them," Wilson said.

Prosecutors said it is virtually impossible to retrieve the money that has been sent out as a part of the operation.

ABC7 has reached out to the Governor for further comment, but his office says the taskforce is already in talks with district attorneys to create a cross-referencing system. The idea is to mirror what's available in 35 other states that allow prison inmate data to be checked with EDD claims.

The ABC7 I-Team has made several attempts to reach the EDD, but has yet to hear back.

See more stories and videos related to unemployment in California here.
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