While claims of fraud against the California Employment Development Department (EDD) have run rampant in the past couple of years with the COVID-19 pandemic, one of the most noteworthy schemes involves two inmates who allegedly ran their scam from behind bars. In July 2021, a grand jury handed down an indictment of three California residents—two of whom are currently incarcerated—for an alleged plot to steal $1.4 million in fraudulent unemployment benefits.
The alleged scheme involved two inmates incarcerated at separate facilities in California and a third person who was recently arrested in Los Angeles. According to a Department of Justice press release, the three defendants allegedly hatched and enacted a plan to submit a series of phony unemployment insurance claims totaling up to $1.4 million using the names of other inmates, falsely claiming that these inmates actually worked within the prescribed period as handymen, merchants, and other occupations, and were available to work. The Justice Department claims the defendants covered their tracks by setting up fake email accounts and giving various physical addresses across Southern California—even paying family members up to $1000 to use their physical addresses. The EDD says the defendants caused a loss of at least $270,000 before the scheme was discovered. The indictment charges all three individuals with conspiracy to commit mail fraud and aggravated identity theft.
What Is at Stake
The conspiracy charges to commit mail fraud and aggravated identity theft are federal crimes that carry potentially severe penalties. If convicted of conspiracy to commit mail fraud, each of the three defendants faces up to 20 years in prison and fines up to $200,000. (For the two inmates, these penalties would be in addition to the state sentences they are already serving.) For the charge of aggravated identity theft, each defendant could also face an additional mandatory two-year consecutive prison sentence.
Attorneys with Experience in Federal Criminal Defense
The above story is just one of many instances of fraud against the EDD, which says they have paid out between $11.4 billion to over $31 billion in false claims in the wake of the economic crisis triggered by COVID-19. Understandably, federal and state agencies are highly motivated to find and aggressively prosecute all instances of unemployment fraud and other federal crimes. If you find yourself accused of such crimes, you need an experienced federal criminal defense attorney in your corner to make sure you are afforded due process and that your rights are protected.
The lawyers of the Sigal Law Group are highly experienced in defending against federal charges with an excellent track record of success. Call us today at (818) 325-0570 for a free consultation.