As one California man recently learned, prosecutors are taking unemployment benefit fraud seriously.
Robert Mateer was driving a new Maserati SUV when he was pulled over by Pasadena police. He also had $197,000 in his vehicle.
There was only one problem: Mateer was officially collecting unemployment benefits.
When police searched the vehicle, they found 17 unemployment benefit debit cards loaded with $133,000 and issued to people with various names. The cards were issued by California’s Employment Development Department (EDD) under the Coronavirus Aid, Relief and Security Act.
That money was supposed to be distributed by the EDD under the auspices of the CARES Act, which gave unemployment benefits to workers who were previously ineligible. This group includes business owners, self-employed workers and independent contractors. To qualify, members of this group had to attest that they were put out of business or lost significant business or income because of the COVID-19 pandemic.
In a federal indictment, prosecutors say that most of the names on the benefit cards belong to people who were victimized by identity fraud. Some of the cards were even in the names of California death row inmates.
The Mateer case is just one of many high-profile recent instances of prosecutors cracking down on unemployment benefit fraud. The San Jose Mercury-News recently reported that Beverly Hills Police had uncovered cases of what seem to be coordinated EDD fraud.
According to the Mercury-News:
“In less than two weeks, Beverly Hills Police have found 87 people who are allegedly connected to EDD fraud and identity theft. Detectives said that they recovered 181 fraudulent EDD cards with a value of over $3.6 million. They also found another $466,000 in case and seven handguns.
Most of those arrested are not from California, police said.
“Shoes, clothing, purses. Anything of high dollar value they were spending on EDD cards,” said Beverly Hills Police Department Lt. “Eighty percent of the arrestees were from out of state, and they were renting Airbnbs and renting high end cars.”
Investigators allege that the suspects were able to go to the EDD website and apply for unemployment under someone else’s name.
“They’re using people who are deceased, in jail, at nursing homes… getting someone’s personal information and entering that into the computer which would then send a card out to their address,”.
In response to rising fraud cases, authorities are now promising swift action.
Federal and State Authorities are Launching a Crackdown
Financial experts have warned that California alone may have seen more than $2 billion in EDD fraud in 2020.
As a result, police, prosecutors and state and departmental officials have begun working to recover some of the lost funding.
Mateer, who could face more than 17 years in prison, is just one such high-profile example. There have been myriad arrests of people accused of defrauding the EDD system in recent months.
Because state employment departments were flooded with applications during the worst of the COVID-19 pandemic, verifying eligibility for aid was difficult. However, as the country continues to recover, banks and employment officials are working together to identify potential instances of EDD fraud.
The EDD recently posted an alert about these efforts and the potential penalties those accused of fraud may face. In that alert, the EDD said it is “aggressively fighting fraud in the wake of unscrupulous attacks on the unemployment program here in California and across the country.”
The EDD added that “perpetrators are often using stolen identity information from national and global data breaches, as well as exploiting expedited payment efforts in the federal Pandemic Unemployment Assistance (PUA) program. Claims identified with suspicious account information have been closed and EDD investigators are partnering with local, state, and federal law enforcement to expose and prosecute offenders to the fullest extent of the law.”
Possible penalties for fraud include:
- Prosecution by government authorities.
- Possible jail or prison sentences.
- Repaying the UI benefits collected, plus penalties and fines.
- Loss of future income tax refunds.
- Losing eligibility to collect UI benefits in the future.
How to Handle Fraud Accusations
If you’ve been accused of fraud of any kind, it’s critically important to seek the help of an experienced attorney. Fraud allegations are very serious and can lead to felony charges if the incident is severe enough. The help of a qualified criminal defense attorney can help ensure that you are treated fairly.
Goldstein Law Group can help. Please contact us immediately for a fast consultation.