The unemployment crisis in California continues to be huge. The state is still down 1.4 million “payroll jobs,” not including work for gig workers, from December 2019. The amount the state has paid in unemployment benefits is also huge: $114 billion between March 2020 and January 16, 2021. The state processed 19.5 million claims during that time, compared to 3.8 million claims in all of 2010, the unemployment peak of the Great Recession.
To top it off, a new federal unemployment program for gig workers was thrown into the chaos with little guidance and no preparation and no instant way of verifying even the identity of the claimants – and fraud was also huge, and getting huger with each report.
Of California’s “confirmed fraudulent payments,” 95% were associated with the federal PUA (Pandemic Unemployment Assistance) program that covers gig workers. As in other states, this program has been “hit hard by fraud from international and national crime syndicates,” the Employment Development Department (EDD) reported in its latest unemployment-benefit fraud update.
In its new report, the EDD confirmed that 9.7% of all payments it made during that time – so roughly $11 billion – were to “fraudulent claims.” In addition, another 17% of all claims – so roughly $19 billion – were made to “potentially fraudulent claims.” These payments are now “under investigation,” and according to officials, a large number of them will likely be confirmed as fraudulent.
Just ballparking here: the pile of fraudulent payments made by California alone could exceed $20 billion after it’s all said and done.
— source wolfstreet.com | Jan 26, 2021