Bay Area couple warns EDD of identity theft. 2 years later, agency seizes their tax return

ALAMEDA, Calif. (KGO) -- The repercussions of the pandemic live on at the EDD -- fraudsters got away with billions of dollars in unemployment benefits, often using stolen identities. Now many identity theft victims are paying the price. An East Bay couple is among the latest.

This couple kept working all through the pandemic - thinking they had nothing to do with the EDD or the unemployment crisis - little did they know, fraudsters were using them to steal taxpayer money.

Remember May 2020? The economy suddenly shutting down, millions losing their jobs, and unemployment claims pouring into the EDD.

Germaine and Tony Ratto were gainfully employed, far from the crisis at the EDD.

"We're both working people, we never collected unemployment," said Germaine.

But then Tony got a notice.

VIDEO: EDD seizes man's tax refund to repay benefits it sent to a scammer: 'Why is this happening to me?'

The EDD has not revealed how many tax refunds it has confiscated, but says many involve workers who were overpaid by mistake, or fraud or technicalities.

"I saw this, I go what is this, it says 'Notice of Unemployment...'" he said.

To his surprise, the EDD said Tony had filed a claim, saying that he stopped working in March, and was entitled to $450 a week.

"I knew it was fraudulent right off the top," Tony said.

He realized a scammer had used his identity to file a fake unemployment claim.

But it didn't stop there. Germaine got an EDD notice too.

VIDEO: EDD seizes Bay Area woman's tax refund, wages to pay back benefits it actually paid to scammer

The couple had no idea a scammer had used one's identity to get unemployment benefits -- until the EDD confiscated her tax refund... then her wages.

"We were very surprised and didn't understand how that would happen to us," she said.

The notice said the EDD wanted to verify she was eligible for benefits.

Of course, she never even applied for any.

Tony and Germaine each filed a fraud report online with the EDD.

"It's not me, I'm fully employed, blah, blah, blah," Germaine said.

They got a receipt, but nothing else. The EDD never responded. No call, no email, no word about those phony claims.

VIDEO: Disabled Californians plead for EDD to unlock their benefits after 340,000 accounts frozen

With his account frozen and his calls unanswered, one disability recipient went to the EDD office -- and found a line wrapped around the block.

"We didn't think anything of it anymore. After that we thought, okay, nothing hurt us personally, financially," Tony said.

Until now. The couple received a notice from the Franchise Tax Board in April.

$1,800 of their tax refund had been seized. The agency that took it?

The EDD.

"Wow you guys didn't even notify me or give us any due process at all," Tony said.

They figured it was due to those fraudulent claims two years ago. The EDD apparently had paid $1,800 dollars to the scammers before cutting them off.

VIDEO: CA mom in high-risk pregnancy goes into premature labor after disability benefits cut off

New moms were caught in the crossfire of the EDD's crackdown on fraud -- including one who was ordered to stay stress-free for the sake of her twins.

Now it was taking that $1,800 back -- from Tony and Germaine.

"So the fraudulent person got away with stealing $1,800," Tony said. "Why would EDD go after me for somebody that stole from them?"

"$1,800 of my money is now gone, that's not fair," Germaine said.

The EDD admits it paid an estimated $20 billion dollars to fraudsters during the pandemic.

The couple says they did what they could to stop at least one scam -- but got punished anyway!

"We've done our part, EDD has not done their due diligence in handing out bazillions of dollars during COVID," Germaine said.

RELATED: EDD estimates nearly $20 billion paid to fraudsters since start of pandemic

"I think they owe an apology to the victims of this fraud and an apology to the taxpayers who lost $20 billion," Tony said.

The couple said EDD could not tell them how to get their tax money back -- so we told EDD about their plight, and it took action.

"We were surprised that the check came in the mail," Tony said.

Actually, they got two checks, for $900 a piece -- the couple finally made whole.

"Thank you 7 On Your Side for helping us," Germaine said.

The EDD says it's trying to identify fraudulent claims that used stolen identities, so the real person doesn't get penalized. 7 On Your Side has helped several identity theft victims get their refunds back. If that's you're in the same situation, be sure to let us know.

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

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