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California Estimates 27 Percent Of Unemployment Payments May Have Been Fraudulent

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A staffer works to process claims at California's unemployment office, March 30, 2020. (California Employment Development Department)
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California’s unemployment department says that as much as 27 percent of benefits paid out during the pandemic may have been fraudulent.

The new estimate comes on the heels of anti-fraud efforts that have left many Californians blocked from collecting payments.

Since March, California’s Employment Development Department (EDD) has paid out more than $114 billion in unemployment benefits. But in a press call on Monday, Labor Secretary Julie Su said a large chunk of that money has gone to criminals.

“Approximately 10% has been confirmed as fraudulent,” Su said. “An additional 17% of the paid claims have been identified as potentially fraudulent.”

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Officials said crime rings in Moscow and Nigeria have flooded the state with applications. They said scammers operate by purchasing personal information on the dark web, using it to file bogus claims and then picking up debit cards loaded with cash at the mailboxes of vacant homes.

Stopping fraud was the stated goal when California suspended 1.4 million claims over the holidays. But many people in that group say they’re seeking benefits legitimately, and losing those payments has left them in a deep financial hole.