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Feb. 15, 2021 - Epoch Times
18:42
How a California Inspector Uncovered the Multi-billion Dollar Unemployment Fraud | Jordan Boyd
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You uncovered this major fraud that's been going with prisoners and people in jail and the EDD. Can you tell us more about how you found this?
Although all of these claims were fraudulent because none of our county jail inmates were eligible for unemployment, we were told at the time that they couldn't stop the flow of the cash until a criminal complaint was filed.
How are these guys doing the schemes?
So it does seem that there was very few checks and balances at the time on EVV's side.
And as long as you had a valid name, a valid date of birth, and a valid social security number, all the rest of the information could be fictitious.
And often it was.
I understand you guys went to other DAs and had them looking to their counties, right?
Not only about the DAs, but the state prison system.
How has it been working with EDD? As this has become a statewide phenomenon, unfortunately, EDD has just been inundated.
And because this has been such a big endeavor, I think it's stressing on their system.
California is facing a multi-billion dollar unemployment fraud with even jail inmates receiving unemployment benefits.
My guest today is Jordan Boyd.
He's the inspector with San Mateo County that discovered the fraud.
Today, he discusses how he uncovered the fraud among the inmates, the EDD's response, and the ongoing investigation.
Welcome to California Insider.
Jordan, it's great to have you on.
Welcome.
Thank you very much.
Pleasure to be here.
So you uncovered this major fraud that's been going with the prisoners and people in jail and the EDD. Can you tell us more about how you found this?
So back in April, May, June of last year, 2020, I was monitoring a local inmate in our county jail, somebody that I knew for many, many years, somebody I knew who had previously committed crimes while in our county jail.
And so I've taken an active role in monitoring his communications, his recorded jail calls.
And in listening to his recorded jail calls, I discovered that he was talking with a good friend of his who had been convicted for murder out of San Mateo County and was then currently housed at Corcoran State Prison.
Serving a 50 to life for murder.
And so I listened to a number of those calls.
Obviously, we had to put a stop to that.
You know, inmates in our county jail cannot communicate freely with CDC prisoners.
And it was clear from the directionality of the calls that the CDC prisoner was using a contraband cell phone.
So I worked with CDC officials to search his cell and to seize his cell phone.
I was surprised to learn that it was his second cell phone, contraband cell phone, that he had in about six months.
But as I continued to listen to our county inmate make additional calls, I realized that he began discussing a scheme, a scam, a fraud scam that was going on in the community that he was just beginning to learn about because he had been incarcerated, and that was unemployment insurance.
And specifically, it was unemployment insurance from the state of California that was also receiving the pandemic-related finances from the government as an additional benefit.
And so while he was talking with other colleagues on the outside and in fact having three-way conversations with others on the street who had successfully filed for unemployment, he quickly realized that this was a scam that he could partake in while in custody.
And he did just that.
He ended up making additional calls and himself and other inmates that were in the same housing unit with him Would call friends and relatives on the outside, giving them the names, dates of births, and social security numbers of themselves, as well as fellow inmates.
And inevitably that information was being pushed around and back into two CDC inmates that we were able to identify in our scheme.
One of which was that earlier inmate that he had been talking to, who, much to our surprise, was now on to his third contraband cell phone.
And so that CDC inmate, in getting the names, dates, births, and social security numbers, was then filing fraudulent unemployment claims for all of these inmates in our county jail.
And from there, when you found this, what happened next?
What did you guys do next?
So we kind of had a parallel investigation.
We began working with the state EDD and their investigators, and we tried to determine how big and how many inmates in our county jail were involved in this.
We knew of at least two inmates in two separate housing units that had sent their information out over recorded telephone calls, but we didn't know if it ended there.
So we initially gave this EDD investigator a list of 90 inmates, so the total of these two housing units.
And they ran a check of those 90 inmates.
We discovered that a third or about 30 of those inmates had had claims filed with EDD. At the same time, we were working to identify all of the people on the outside that were helping the inmates by keeping the flow of information, not just receiving it from our county jail inmates, but then ultimately pushing it back into this CDC prisoner that was filing these claims.
Unfortunately, at the time, we've been told by EDD that although all of these claims were fraudulent because none of our county jail inmates were eligible for unemployment, nor were they entitled to the benefits, and frankly, they couldn't work, which is a requirement of receiving unemployment that you certify that you're ready, willing, and able to work.
We were told at the time that they couldn't stop the flow of the cash.
They couldn't turn off these cards until a criminal complaint was filed.
And that was very frustrating for us.
So we very quickly, in a matter of weeks, put together a case involving 21 individuals, which was 13 inmates, a number of folks on the outside that were helping them, as well as the two prison inmates.
And so we ended up filing on those 21, which was our first indoctrination into this scam.
Did you ever find out why they couldn't stop the funding?
Yeah, EDD. And again, we got great results in working with the investigator.
We worked well with them.
But as she raised the issue within her own management chain, she was told that EDD policy simply wouldn't allow them at the time to turn off those accounts.
And what we learned through our investigation is that the scam was perpetrated in that when the claim was filed, dates of unemployment were backdated to March 1st.
So although the claims weren't filed until June, July, and into August, they were backdated to March 1st to capture the most amount of money that they could receive.
And the result was once the claim was approved and a Bank of America account was opened, That a Bank of America debit card would then be mailed to an address, preloaded, oftentimes with $20,000 and $30,000 already on the debit card eligible for withdrawal.
And now from there, you guys, I understand you guys went to other DAs and had them looking to their counties, right?
That's right.
And not only the DAs, but the state prison system.
So because we had two CDC inmates that were involved in our case, we notified prison officials.
They, in turn, began launching their own investigation and realized that it was prolific Within both the CDC system, as well as throughout the state and other county jails.
And so together, the various elected DAs have gotten together to really raise the alarm and the flag on this, to let the public know, let the governor's office know, and certainly EDD know that this is a huge problem.
And then out of the 90 that they were in your jail, 30 of them in that unit, in that system, that part of the jail, 30 of them were committing disfraud.
How many more people do you have in your jail outside of the 90?
Yeah, so there's about 900 in custody in our county.
So 90 only represented about 10%.
So once we got through with this initial investigation, then our Sheriff's Office continued to work with EDD and sent over the remaining Inmate population list.
They have been working months now with EDD to flush out what remaining inmates may have filed claims.
And unfortunately, now that this has grown and become such a humongous undertaking statewide, it seems EDD is just overwhelmed.
And so Whereas we were getting turnarounds of next day or several days, it's my understanding that now the turnaround times are much greater because they're doing more with the same number of resources that they've had.
So It's my understanding that that portion of the investigation is still ongoing.
EDD has since turned around that information.
But in addition to learning which claims were filed, the investigative effort also must go to Bank of America.
And we have to get Bank of America records.
And that too has also slowed down a great deal.
When we first launched our investigation, and we were the first in the state, it seems, to be doing this, our EDD investigator was able to get records from Bank of America within just a couple of days, if not a couple of weeks.
And unfortunately, that too has grown to now many weeks of a delay.
Now, do you think this 800, this other 800 people that you have in your jail, and during the time that you guys found the fraud, they may have, they might be still receiving if they were part of the fraud, the unemployment, the pay, they could possibly be getting it?
It could be.
And it's because I don't know if EDD has since changed their stance and their policies.
I don't know if EDD now, once they determine that somebody is eligible because they're an inmate, if they're now able to turn off and freeze the account.
I don't know if that's the case.
I hope so.
And it was just cross-reference checking, right?
It shouldn't be...
I would wonder, like, why would it take like a few months for that to happen?
It's a good question.
I believe it is.
I believe it's, at least at the time, it was more of a manual process.
So while we would send over a spreadsheet of 90 initially, back then in August, I was told that there was just one EDD analyst for the entire state.
So while they had 17 investigators throughout the state, there was just one analyst who was receiving all of those requests and processing it.
So I don't know if EDD has increased their resources since then, or if that's why it's now taking longer.
Out of that 810, have you guys been able to process those yet?
How many of them are committing the fraud and stopping that?
Yeah, it's a great question.
It's my understanding and that portion of the investigation is being handled by a different group, a different entity.
So I don't have a lot of visibility to it.
But I do know that they have done their review.
I understand that they have gotten all the records that they needed back from both EDD and Bank of America.
And that they're on the cusp of sending that case over to us, to our office for prosecution.
I don't know how many additional inmates that'll be, but I do understand that they have finished their review.
So in the next week or two, we should have a better idea of how many more inmates in our jail were responsible.
You just had a big delay on getting the information back.
That was the part that delayed you guys.
Yeah, that's exactly right.
Initially, this next wave, of course, took longer than the first wave, and it was a two-step process.
They had to wait for records initially from EDD. Once they discovered who had claims filed, then they had an even longer delay with Bank of America getting the records they needed from them.
And now you have seen some cases where some very questionable people with questionable identities, like people that are very, very young.
And how are these guys doing the scheme?
If you can get into the details of it.
Sure.
It's my understanding that with the pandemic and with the federal government's aid due to COVID, that our state's EDD system had relaxed their standards to such that individuals who were previously uneligible for unemployment, such as those that were self-employed, could now apply.
And it made sense.
Unfortunately, these scammers realized that that meant them.
So because they didn't have any employment history, there's no way to check what their previous employment was.
And so they were filing these claims as though they too were self-employed.
So we had a number of individuals that were filing claims that they were construction laborers, often barber apprentices.
And we did hear of one instance in which A woman had filed a claim using her five-year-old daughter's information, claiming that she was an unemployed fashion model or designer.
So it does seem that there was very few checks and balances at the time on EDD's side, and as long as you had a valid name, a valid date of birth, and a valid social security number, all the rest of the information could be fictitious, and often it was.
And do you think if you wouldn't have been looking into this and nobody else would have found this, do you think this would be going on till now?
Boy, I'd like to think not.
I'd like to think that there's enough individuals similarly situated like me that are listening to these calls, that are monitoring these inmates' activities, that somebody else would have discovered it down the road.
In fact, I'm confident it would have been.
I think just by luck, we happened to be at the forefront and we were the first.
I'm aware that shortly after our case and news of our case broke locally, that Beverly Hills, for example, also did a major investigation, having seen a number of individuals coming to their town, to the Rodeo Drive and elsewhere, spending a great deal of money using their EBD debit cards.
And shortly after our case, I saw some press That there had been a number of arrests out of Beverly Hills as well.
So I think it was only a matter of time before everyone caught on.
And now what about outside of the jail system?
Have you guys been able to see anything outside, any groups outside of the jail system and prisons that are committing this fraud?
Yes.
And in fact, even in our case, After we've looked at phone downloads and a number of other areas of investigative inquiry, we discovered that there's a lot of people involved in the scam.
There were a lot of people that were willing to have their addresses utilized to receive those fraudulent claims.
And for their effort, they were able to take a couple of thousand dollars off those various debit cards before they passed it along to its final resting place.
And so we've discovered that there's a number of instances like that.
And in fact, we have an investigation that we've referred to another law enforcement agency where we've identified six or seven other individuals who weren't even located in our county, but had been tangibly associated with ours.
And I get calls regularly, unfortunately, from police officers out in the field.
To contact somebody, either through a traffic stop or through some other means, and discover that they are in possession of a great deal of cash, that they have numerous Bank of America debit cards in their possession, not in their name, and are looking for contacts within EDD to flush out why this individual has so many different EDD cards in their possession.
So I know it certainly isn't Just in our jails and prison systems, unfortunately, it's run rampant by those on the streets as well.
How has it been working with EDD? Have they been able to respond or are they still short of resources?
You know, that's a great question.
I've had nothing but great working relationship with EDD, in particular the EDD investigator that we've been assigned.
She has constantly worked hard, has turned around the information that we've asked of her as quickly as she can.
I know that as this has become a statewide phenomenon, unfortunately, EDD has just been inundated.
And I know because of that, Her own ability to receive information from within EDD and elsewhere has been extended.
So my working relationship with EDD has been great.
But unfortunately, I believe EDD, like many other government entities, just has limited resources, unfortunately.
And because this has been such a big endeavor, I think it's stressing on their system.
Well, Jordan, thank you a lot.
You've saved this state a lot of resources.
Do you have any other thoughts for our audience?
I don't.
I'm humbled and happy and glad that this was uncovered when it was.
Hopefully, with the joint effort in both the local, state, and federal partners, we can put an end to this.
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