SACRAMENTO, Calif. (AP) — Califonria Gov. Gavin Newsom’s administration wants to pay tens of millions of dollars this year so the state can keep using sophisticated software to stop scammers from filing fake unemployment claims and stealing money from taxpayers.
But a nonpartisan agency that advises the Legislature says lawmakers should reject Newsom’s proposal, arguing much of the fraud prevention did more harm than good by making it harder for legitimate claimants to get paid.
Nancy Farias, the newly appointed director of the California Employment Development Department, told lawmakers on Tuesday that the state stopped $120 billion worth of fraud attempts in 2020 and 2021 — or more than $164 million per day.
The state failed to stop $20 billion in fraud, including $810 million paid in the names of roughly 45,000 prison inmates who were not eligible. The state even paid money in the name of well-known convicted murderer Scott Peterson in what was most likely a case of identity theft. So far, Farias said the department has 850 pending investigations for fraud and has made over 200 arrests. About 20 cases have been prosecuted.
But nearly all of that fraud was traced to a temporary federal program that made more people eligible for unemployment benefits during the pandemic. That program, which did not have as many safeguards as the…
