RELEASE: Rampant EDD Unemployment Insurance Fraud Prevention Measure Enacted

New Law Will Safeguard Taxpayer Unemployment Funds

For immediate release:

SACRAMENTO – After California lost more than $810 million taxpayer dollars last year to unemployment insurance (UI) fraud, legislation to implement standard fraud-prevention practices at California’s Employment Development Department (EED) was signed into law. AB 110, authored by Assemblywoman Cottie Petrie-Norris, requires EDD to cross-check unemployment claims against incarceration records in order to prevent paying fraudulent benefits.

“EDD’s inability to detect and prevent fraud must never be repeated. We have a duty to our taxpayers to ensure that their dollars are going into the right hands,” said Assemblywoman Cottie Petrie-Norris (D-Laguna Beach). “California will now implement basic business practices to prevent fraudsters from taking advantage of a glaring loophole in the current system.”

Although other states cross-check lists of unemployment benefit claimants against incarceration data, California law restricted sharing inmate information with other state agencies. AB 110 now enables EDD to easily cross-check claimants’ information, including social security numbers, against the relevant information in the database of inmate information maintained by the California Department of Corrections and Rehabilitation and by the counties.

“The rampant statewide fraudulent unemployment claims scheme involving state prisoner applicants is a breakdown of catastrophic proportions that has failed the American taxpayer,” said Orange County District Attorney Todd Spitzer. “AB 110 is absolutely essential in minimizing the loss of taxpayer dollars to fraud. Had a mechanism been in place to block this money from distribution to ineligible prison inmates, untold millions of dollars would have been safeguarded.  The state of California owes a debt of gratitude to Assemblymember Petrie-Norris for her leadership on this issue and for remaining unwavering to protecting precious taxpayer dollars.”

AB 110 is supported by CalChamber, California State Sheriffs’ Association, Orange County Business Council, Orange County District Attorney Todd Spitzer, Orange County Sheriff's Department, Peace Officers Research Association of California and Southwest California Legislative Council.

“The backlog in claims and fraudulent unemployment payments are an embarrassment to California and its workforce when it needs help the most. Assemblywoman Petrie-Norris’ AB 110 is an important part of a package of reforms needed for EDD. This bill assures a better flow of information between EDD and the Department of Corrections and Rehabilitation to prevent unnecessary fraudulent spending, directing State dollars to those in need,” said Lucy Dunn, President and CEO, Orange County Business Council.

“The fraud on California’s UI Fund that has been widely reported throughout this pandemic is unacceptable.  The California Chamber of Commerce is glad to support Assemblywoman Petrie-Norris’ AB 110, which would facilitate sharing of information between the EDD and California’s correctional system to ensure that fraudsters do not utilize inmates’ information to steal money from California’s Unemployment Insurance Fund.  We would also note that other states’ already employ this basic safeguard, and are glad to see a common-sense solution being imported into California,” said Rob Moutrie, Policy Advocate, California Chamber of Commerce.

"The breadth of the EDD fraud is staggering.  Inmates stole money rightfully for those in need, defrauding the state for their own personal gain.  AB110 helps close this loophole, exploited by tens of thousands of inmates to the tune of hundreds of millions of dollars in taxpayer money.  This bill will direct local and state jails and prisons to provide inmate identifying information to EDD so EDD can identify and deny these fraudulent claims," said  Jeannine M. Pacioni, Monterey County District Attorney.

This bill is jointly authored by Assemblymembers Phillip Chen (R-Yorba Linda), David Chiu (D-San Francisco), Chad Mayes (I- Rancho Mirage), Adrin Nazarian (D-Van Nuys), Rudy Salas Jr. (D-Bakersfield) and Miguel Santiago (D-Los Angeles); and co-authored by Assemblymembers Richard Bloom (D-Santa Monica), Rebecca Bauer-Kahan (D-Orinda), Tasha Boerner Horvath (D-Encinitas), Wendy Carrillo (D-Los Angeles), Cristina Garcia (D-Bell Gardens), Jesse Gabriel (D-Woodland Hills), Mike A. Gipson (D-Carson), Adam C. Gray (D-Merced), Brian Maienschein (D-San Diego), Al Muratsuchi (D-Torrance), Jim Patterson (R-Fresno), Bill Quirk (D-Hayward), Phil Ting (D-San Francisco), Carlos Villapudua (D-Stockton) and Senator Ben Allen (D-Santa Monica).