Santa Barbara Inmates Allegedly Collected $1.4 Million in COVID Unemployment Funds

Santa Barbara Inmates Allegedly Collected $1.4 Million in COVID Unemployment Funds title=
Santa Barbara County Jail | Credit: Daniel Dreifuss (courtesy of The Independent)
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This story was originally published by the Santa Barbara Independent and is reproduced here in partnership with Edhat.


By Tyler Hayden of The Independent

Santa Barbara County Jail inmates collected at least $1.4 million in COVID benefits, prosecutors say, as part of a massive unemployment scheme that’s played out in correctional institutions across the state. While the number of local fraudulent claims ― 143 ― was reported last month, the associated dollar figure was not previously known.

Senior Deputy District Attorney Brian Cota said it’s not yet clear how many inmates were involved; individuals may have filed multiple claims. He said his office is in the beginning stages of what will be an arduous investigation that will take several months to complete. No charges have been filed yet.

Last week, nine California District Attorneys described the scam in a letter to Governor Gavin Newsom as “the most significant fraud on taxpayer funds in California history,” estimating payments from the state to ineligible recipients behind bars could total more than $1 billion. More than $400,000 has gone to death-row inmates, including Scott Peterson, who was convicted in 2004 of murdering his wife and unborn child. Cota noted that the suspected Santa Barbara participants are among the county’s most serious offenders, as lower-level inmates were released or transferred to home confinement at the start of the pandemic. 

The fraud, investigators say, was uncovered in both state prisons and county jails, and it took multiple forms. Inmates sometimes submitted the claims themselves, or friends and relatives on the outside would file the paperwork on their behalf. Authorities also discovered larger-scale rackets orchestrated by gangs. To be legally eligible for unemployment benefits, an applicant must be actively seeking work and be available to accept work. Duping the system is a felony crime punishable by up to three years in prison.

The situation first gained attention this summer when authorities investigating unrelated crimes took note of suspicious phone conversations among San Mateo County inmates. In Riverside County, one inmate was overheard bragging that he’d purchased a $400 watch for his mother, “thanks to the state.”

It appears that the state agency responsible for vetting and distributing unemployment funds ― the Employment Development Department (EDD) ― was ripe for criminal exploitation, especially during the chaos of COVID. Unlike equivalent departments in most other states, California’s EDD does not cross-reference applicants’ identifying information, such as Social Security numbers, with California Department of Corrections or county jail data before rubber-stamping claims. Shocked by the oversight, state legislators and prosecutors have pressed Newsom to take swift action to dramatically reform the agency.

In response, Newsom assigned a team of technology and government systems experts to study the department’s operations. He also promised to help local jurisdictions prosecute their cases. “To expedite and strengthen these efforts, I have directed the Office of Emergency Services to stand up a task force to coordinate state efforts and support investigations by local District Attorneys,” Newsom said in response. “We will continue to fully partner with law enforcement and direct as many resources as needed to investigate and resolve this issue speedily.”

Meanwhile, the EDD is struggling to process legal claims filed by unemployed Californians. According to the most recent numbers, the agency is saddled with a backlog of approximately 580,000 applications stuck somewhere in the approval process.

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sacjon Dec 03, 2020 10:55 AM
Santa Barbara Inmates Allegedly Collected $1.4 Million in COVID Unemployment Funds

VOR - do you ever have anything nice or supportive to say about anyone? My gosh, every day it's the same thing.....
Edhat article: "Something something Covid something Newsom something..."
VOR: "Newsom is wrong, everyone is wrong"
PITMIX: "Actually, I think it's not that wrong"
VOR: "Of course it's wrong, and also probably unconstitutional"
GENERALTREE: "You should all be in jail" and then something rude that gets deleted
SACJON: "I don't know, it might not be as wrong as VOR is saying. Also, GT, that's really rude."
GENERALTREE: Deleted
VOR: "Sac, you're wrong and I think everyone is wrong still, but I'm very much right."
MACPUZL: "VOR, here are the numbers to prove you are wrong."
VOR: "Mac, you're numbers are wrong, here are the right numbers."
DUKEMUNSON: "Kids should be back in school now no matter what!"
GENERALTREE: Deleted

Babycakes Dec 03, 2020 11:12 AM
Santa Barbara Inmates Allegedly Collected $1.4 Million in COVID Unemployment Funds

SAC: I think even the most cynical among us would have to agree that an opposing point of view is a healthy thing. You may think of VORs comments as negative, I look VORs comments as the other side of the coin, the half-full part of the half-empty glass, the yin to the yang, and so on. You have to admit that VOR avoids the name calling and shaming that so many others use as verbal weapons. I wish everyone would keep it as classy as VOR, who is definitely the "rebel" in most of the Edhat conversations.

dukemunson Dec 03, 2020 12:42 PM
Santa Barbara Inmates Allegedly Collected $1.4 Million in COVID Unemployment Funds

Too true SacJon...and it was good humor! But remember...in addition to demanding schools open I like to also think my wildly excessive use of exclamation points is notable so only putting 1 after my statement was wildly innaccurate ...I've never finished that demand with anything less than 5 exclamation points...and usually more like 11!!!!!

PitMix Dec 03, 2020 07:33 AM
Santa Barbara Inmates Allegedly Collected $1.4 Million in COVID Unemployment Funds

This story is lacking on a lot of the details. From what I have read in other sources, this money came from the feds and they allowed people to self-certify their unemployment to get the money out to the people that needed it faster. They had to do it this way because the state unemployment computers in most states (and CA) are really old and cannot be reprogrammed to check for death certificates or prison status. They were having to search for retired computer programmers who knew the antiquated languages like COBOL to do the minor reprogramming that they did. Our esteemed local pols Limon and Jackson are responsible for letting the Unemployment infrastructure fall into disrepair over their lengthy terms. Hence the 580,000 people still waiting for their state unemployment 9 months later.

Plenty of blame to go around but there are reasons for all of it if you dig deep enough.

PitMix Dec 03, 2020 09:18 AM
Santa Barbara Inmates Allegedly Collected $1.4 Million in COVID Unemployment Funds

Also, CA has a state law that law enforcement (including prisons) cannot share SSNs with other agencies because this increases the likelihood that these databases will be hacked and result in identity theft. The result was the ED could not check the prison database to see if these people were in jail based on their SSNs. Law of Unintended Consequences strikes again.

MountainMan4865 Dec 03, 2020 09:43 PM
Santa Barbara Inmates Allegedly Collected $1.4 Million in COVID Unemployment Funds

SACJON - thank you for picking up the RexofSB torch. And thank you for the giggle. Duke, I admire your extensive use of the exclamation mark. I try to be a little more modest in my use.
On a separate note, but similar to topic... I never got a 'stimulus' check. Several people I know, from all walks of life did not get one. I just sat back and watched all the 'stimulus' monies - a pittance for the individual, but millions for the large corporations, while little businesses got screwed. This new thing with the prisons.... stinks.

PitMix Dec 04, 2020 08:13 AM
Santa Barbara Inmates Allegedly Collected $1.4 Million in COVID Unemployment Funds

Best Post Ever on Edhat!

VOR - do you ever have anything nice or supportive to say about anyone? My gosh, every day it's the same thing.....
Edhat article: "Something something Covid something Newsom something..."
VOR: "Newsom is wrong, everyone is wrong"
PITMIX: "Actually, I think it's not that wrong"
VOR: "Of course it's wrong, and also probably unconstitutional"
GENERALTREE: "You should all be in jail" and then something rude that gets deleted
SACJON: "I don't know, it might not be as wrong as VOR is saying. Also, GT, that's really rude."
GENERALTREE: Deleted
VOR: "Sac, you're wrong and I think everyone is wrong still, but I'm very much right."
MACPUZL: "VOR, here are the numbers to prove you are wrong."
VOR: "Mac, you're numbers are wrong, here are the right numbers."
DUKEMUNSON: "Kids should be back in school now no matter what!"
GENERALTREE: Deleted

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