California Admits Up to $31 Billion Sent to Fraudsters and Foreign Criminal Rings

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Posted by Sheridan Nolen on Thursday, January 28th, 2021, 3:25 PM PERMALINK

Already facing a growing recall effort for his despicable leadership during the COVID-19 pandemic, Gov. Gavin Newsom can add failing to protect the tax dollars of hardworking Californians to his administration’s laundry-list of pandemic failures. According to the California Labor and Workforce Development Agency (CLWDA), $31 billion in unemployment funds may have been sent to fraudsters.

"Of the $114 billion in unemployment paid by California since March, approximately 10% has been confirmed as fraudulent. An additional 17% of the paid claims have been identified as potentially fraudulent,” said CLWDA Secretary Julie Su.

This month, California had estimated that $10 billion in unemployment benefits were sent fraudulently, including some funds being received by organized crime groups in Russia and China. Initial estimates in October 2020 were $4 billion.

"There is no sugar-coating the reality: California did not have sufficient security measures in place to prevent this level of fraud," Su said. She also added that foreign and national criminal rings are working relentlessly behind the scenes to steal unemployment benefits using sophisticated methods of identity theft.

Widespread unemployment fraud is by no means new in California. Before the pandemic, the state revealed more than 8% of all jobless claims paid between 2016 to 2019 went to scammers. If anything, Secretary Su should have acted sooner to protect taxpayers by improving the security of the state’s unemployment system.

Unfortunately, given that President Biden plans to nominate Su for Deputy Secretary of the U.S. Department of Labor, it seems unpromising that swift, effective action will be taken to fight unemployment fraud at the federal level. While California Democrats House Speaker Nancy Pelosi, Senator Dianne Feinstein, and Senator Alex Padilla are calling on President Biden to establish a federal task force to assist states in addressing the issue, President Biden will be bringing the very person who contributed to the problem into his administration.

Thankfully, many Californians could be heading back to work soon. On Monday, Gov. Newsom lifted the state’s stay-at-home order after months of imposing some of the harshest, job-killing virus restrictions in the entire country. According to the U.S. Bureau of Labor Statistics, the Golden State had an unemployment rate of 9% for the month of December.

Gov. Newsom’s oppressive, baseless coronavirus restrictions have caused irreparable harm to millions of Californians. Now, taxpayer dollars are not even going into the pockets of those suffering from his mistakes – or even United States citizens'.

Photo Credit: Gage Skidmore

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