California allegedly paid $11 billion in fake jobless claims to criminals overseas

California allegedly paid $11 billion in fake jobless claims to criminals overseas.

According to the Associated Press, California did not have the security required to protect its hundreds of billions of unemployment transfers, resulting in hackers securing upwards of $11 billion in unemployment payments from the state. This represents a total of 10% of the payments sent out by the state (AP).Stimulus checks have been a supporting factor for the economy during the COVID-19 pandemic, and as with all monetary ventures, some people out there saw stimulus packages as a great way to rake in cash. 

California Labor Secretary Julie Su also warned that “another 17% ($20 billion) is considered suspicious, and a large part of that could be found to be fraud” (AP). Su also stated that California was being swamped with jobless claims, roughly 940,000 backlogged. This may provide some insight as to the struggle the state is facing in handling these issues. Similar events happened in Washington recently. A West African fraud ring used previously stolen identities to steal upwards of $300 million in stimulus payments. Fortunately in this case, the state was able to collaborate with federal law enforcement and financial institutions to recover most of the funds. Still, the danger of fraud continues as the pandemic lingers.

On Monday house speaker Nancy Pelosi, along with a handful of Democrat colleagues, urged President Joe Biden to create a commission for the investigation and prevention of such fraud. It is unclear whether the president has a plan for handling the issue at this time. Fraud is also occurring in small businesses, according to the Star Tribune. Several small businesses in Orange County, Los Angeles, were sued by the district attorney for fraudulent relief claims.

The businesses claimed, made up records for, and received money to pay employees that they did not have. When the businesses faced closer inspection, it was revealed that they had claimed nearly double their staff for relief money. Issues such as these will most likely progress as the pandemic continues on throughout the year. Fortunately for the states, each case gives insight on how to better fight & protect against the next. The state of California has yet to announce whether or not these cases have been resolved.




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