LOS ANGELES — California officials say hackers, identity thieves and overseas criminal rings stole an estimated $11.4 billion in unemployment benefits from California last year.
But the extent of the fraud might grow far larger: billions more in jobless payments are under investigation, California's Employment Development Department, the organization that manages the state's unemployment, said.
California Labor Secretary Julie Su told reporters in a conference call Monday that of the $114 billion the state has paid in unemployment claims, about 10% has been confirmed as fraudulent since tougher security measures were adopted in the fall.
Nearly $20 billion more is considered suspicious.
The majority of the fraudulent claims were filed through a new federal program intended to provide unemployment benefits to gig workers, independent contractors and the self-employed.
Su says the state did not have sufficient security measures in place and criminals took advantage of the gaps.
“There is no sugarcoating the reality,” Su said during a press call Monday. “California has not had sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.”
Su said part of the blame goes to the Trump administration, which she claims did not provide guidance or resources to California to counter fraudulent claims.
“It should be no surprise that EDD was overwhelmed, just like the rest of the nation’s unemployment agencies,” Su told reporters. “And we now know that as millions of Californians applied for help, international and national criminal rings were at work behind the scenes working relentlessly to steal unemployment benefits using sophisticated methods of identity theft.”
EDD hired a contractor, ID.me, to verify claimants online beginning in October. Between October 1 and January 11, ID.me says they blocked 30% of the claims filed, roughly 463,700 claims, because of potential fraud, according to the Los Angeles Times.
