Jail inmates, including convicted murders, collect EDD benefits while unemployed Californians can't get them

ByRenee Koury KGO logo
Wednesday, August 19, 2020
Scam nets San Mateo inmates $250K in unemployment benefits
Unemployment benefits are still out of reach for many Californians who are out of work. While legitimate workers can't get benefits, officials say the EDD has paid at least $250,000 in benefits to inmates running a scam inside a San Mateo County jail.

REDWOOD CITY, Calif. (KGO) -- EDD benefits are still out of reach for more than a million Californians who are out of work. While legitimate workers can't get benefits, officials say the EDD has paid a quarter-million dollars in benefits to inmates running a scam inside a Bay Area jail.

We've heard about fraudulent claims. Now, a stunning discovery we first broke this weekend. San Mateo County jail inmates, including convicted murderers, have been getting benefits. How did that happen?

RELATED: 21 arrested in unemployment scam at San Mateo Co. Jail, sources say

Alicia Lee of South San Francisco lost her restaurant job when the pandemic hit in March. "I kept calling; it's like two weeks, three weeks, four weeks..."

"Then when I try to certify they say I have to certify, I get this: page not found," she says.

Pierro Infante of Berkeley lost his job as a legal researcher.

Both filed unemployment claims months ago -- but like a million jobless Californians, they can't get their benefits.

While many legitimate workers can't get their benefits, authorities say the EDD doled out at least a quarter-million dollars in benefits to inmates in the San Mateo County jail.

San Mateo County District Attorney Stephen Wagstaffe said 21 current and former inmates were in on the scam.

RELATED: Scammers get EDD benefits while 1 million jobless still can't

The California EDD said that they're in an active nationwide investigation regarding identity theft and fraudulent claims.

"We charged 21 people with ripping off the California EDD to get money for unemployment. Money that is destined to be going to people who are out of work," he said.

"These fellows in the jail starting in May, June, July, were having money deposited in their accounts because they applied for and said they were unemployed and entitled to benefits. It was a complete ripoff," DA Wagstaffe said.

What's more, Wagstaffe said two suspects are convicted murderers. Yet another is awaiting trial on a murder charge.

"We were paying these murderers as taxpayers. Our money was going to these murderers so they could spend it however they wanted," DA Wagstaffe said.

Wagstaffe said an investigator discovered the scam by chance.

"He heard the inmate talking about it. 'Hey, here's how you can get this easy money.' It's not being checked on, and that's what made him say 'okay.' He took that inmate, called up EDD, verified, yeah, we're running money to this individual."

Inmates were using county-issued iPads and phones to file claims. Money was deposited into their debit accounts.

RELATED: Unemployed workers share how they got through EDD system to finally receive benefits

"Just keep trying, keep calling, keep on them." Stories of successfully receiving unemployment benefits are trickling in, and workers share their encouragement and tips for success.

"It's not hard. You fill out the paper, you get the paper online, you fill it out online using the tablets we provide to them," said DA Wagstaffe.

Officers arrested 21 suspects in three counties and found $150,000 cash at one location.DA Wagstaffe said other suspects also went on a spending spree.

"Including one person who really went out... We think spent it all on drugs. That's where it went instead of helping UI people who are simply trying to put food on the table," Wagstaffe said.

The EDD has been trying to stamp out widespread fraud.

"They just pretty much acknowledged we're overwhelmed. We don't have the resources to catch all the fraud and scammers out there. They said until we filed charges, they couldn't stop wiring money to these guys."

RELATED: EDD applicants find themselves in 'purgatory' without an approval or denial

DA Wagstaffe saw our reports on the struggles of workers trying to get benefits.

"I sat there and thought of these very people on channel seven, these people that have been there, trying somehow to survive, not getting money, while hundreds of thousands of dollars were being deposited from EDD to these criminals. It's wrong and immoral and I'm glad we brought it to a stop, at least in this jail," he said.

DA Wagstaffe says other jails are checking possible claims too.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.