Friday, April 16, 2021

California Spends $11 Billion on Unemployment Fraud During Covid, Possibly $31 Billion

 Click here to read the original Cautious Optimism Facebook post with comments

From the Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff.

Well the story is a couple of months old, but now we know where more than a quarter—and probably soon to be over a third—of California’s $42 billion Covid “stimulus” bailout money already went before they ever got it. Plus there’s a classic if not completely predictable punchline at the end.

"California has paid out a staggering $11 billion worth of fraudulent unemployment claims since the COVID-19 pandemic began last spring, California Labor Secretary Julie Su said Monday."

Read Sacramento Bee article here

"The fraudulent payments represent about 10% of all payments for pandemic era unemployment benefits, Su said. The percentage is likely to go higher."

"Another 17% of the dollars that have been paid out — more than $19 billion — are considered suspicious and “a large number of that could be confirmed fraud as well,” she said."

"“There is no sugarcoating the reality,” Su told a news conference. “California did not have enough security measures in place.”


"...dozens of prison inmates had been engaged in a scheme, mostly using contraband cell phones, to illegally acquire unemployment benefits for themselves and outside accomplices."

“Officials said billions of additional dollars have been siphoned off by organized cyber-crime rings operating out of Nigeria, Russia and elsewhere. “There’s a lot of sophisticated schemes out there,” Su said.”


“Su, who is reportedly about to be nominated as deputy U.S. Labor secretary by President Joe Biden, put much of the blame for the fraud problem on the Trump administration."

"She said Trump’s Labor Department “did not provide adequate guidance or information to protect against fraudulent rings state by state.”"

"The department did issue advisories for months warning about potential fraud.”

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