California taxpayers have been bilked out of hundreds of
millions of dollars — possibly even $1 billion — this year,
that went to jail and prison inmates through fraudulent
unemployment claims filed as part of the state’s pandemic relief
Murderer Scott Peterson, convicted in 2004 of killing his
pregnant wife Lacy, was one of the recipients, according to
What are the details?
Widespread job losses amid the coronavirus pandemic spurred
governments to act quickly in making financial relief available for
those struggling financially. But in the rush, critical fraud
prevention measures were missed, and in California, prisoners and
their loved ones were able to take advantage.
Los Angeles Times reported on the massive racket conducted
through California’s Employment Development Department, which was
revealed through a letter from nine district attorneys and a
federal prosecutor who wrote to Gov. Gavin Newsom (D), urging him
to put an end to the loopholes.
The newspaper reported:
So far, investigations have uncovered more than
$400,000 in state benefits paid to death row inmates, and more than
$140 million to other incarcerated people in California’s 35
prisons, according to [Sacramento County Dist. Atty. Anne Marie] Schubert. In total, payments to those ineligible due to
incarceration in prisons and jails could total nearly $1 billion,
the prosecutors claim.
Schubert told the Times, “The murderers and rapists and human
traffickers should not be getting this money. It needs to
But the prosecutors noted that the huge racket was not as simple
as incarcerated individuals filing their own applications for
relief funds, although some purportedly did just that. The
New York Post reported that “the alleged con took many forms:
some claims were submitted directly by inmates or by their family
and friends, while other prisoners were unwitting victims.”
Authorities believe prison gangs may also be involved in some
instances of large-scale, organized scams to rake in jobless
Peterson’s attorney claims his client was not involved in any
fraud, and that we was unaware of the accusations by the
prosecutors. Other notorious convicts named as recipients of the
unemployment funds include death row inmates Cary Stayner, a serial
killer, and Isauro Aguirre, who tortured and killed an 8-year-old
Newsom issued a statement thanking the district attorneys “for
their commitment to resolving this issue,” according to
The New York Times.
“Unemployment fraud across local jails and state and federal
prison is absolutely unacceptable,” said the governor, who
announced his own task force to aid district attorneys and
coordinate state anti-fraud efforts.