Senator Shannon Grove (R-Bakersfield) announced that her bill to strengthen protections against fraudulent unemployment insurance (UI) claims filed with the Employment Development Department (EDD) passed off the Senate Floor today. SB 39 would require the Employment Development Department (EDD) to cross check prison inmate roles in order prevent unemployment benefits from going to ineligible recipients.
“SB 39 is a common sense bill that puts the California State Auditor’s recommendations into effect immediately, so that we can avoid millions, if not billions, in fraudulent claims,” said Senator Grove. “These fraudulent claims are 100% avoidable and it is the state’s duty to ensure the fraud debt doesn’t fall back on taxpayers and hardworking Californians once again.”
In the past year, audits have uncovered billions of dollars in misspent UI benefits at the EDD due to the department’s inability to prevent fraud. Between March and August 2020, more than 35,000 Pandemic Unemployment Assistance claims were filed on behalf of inmates and more than half of those claims were paid, despite inmates being ineligible to receive the benefits under current law.
At the time of the discovered fraud, 35 other states had adopted fraud protections for their various unemployment programs. This paved the way for a widely utilized fraud scheme to steal nearly $1 billion in taxpayer money.
District Attorneys across the state have had to deal with the repercussions of the EDD’s incompetence. With more state prisons than any other county, Kern County has seen over $16 million in processed fraudulent prison claims. Kern County District Attorney Cynthia Zimmer has partnered with Senator Grove on SB 39 and has continued to work on the front lines combating and prosecuting EDD fraud.
“Kern County District Attorney, Cynthia Zimmer has been on the front lines battling EDD prison fraud issues for over a year,” said Senator Grove. “Cynthia is one of the many District Attorneys across the state that were required to use resources and employees to stop the rampant fraud happening in our prison systems. SB 39 will provide an immediate solution to inmate fraud in the EDD system, so those resources and time can be used to further protect our communities.”
SB 39 passed with a vote of 38 to 0. The measure will next be heard by the State Assembly.