Department of Justice needed to protect taxpayers and recover $11 billion in fraudulent claims
February 9, 2021 - WASHINGTON — In response to the recent revelation of more than $11 billion in fraud at California’s Employment Development Department (EDD), 
Representative Josh Harder (CA-10) has called for federal assistance in investigating and prosecuting the criminals who have stolen from American taxpayers. Rep. Harder has requested federal support in bringing to justice the Russian, Chinese, and Nigerian crime rings who have prayed on vulnerable Californians by stealing their identities and falsely claiming their benefits. He has also called for Department of Justice support in order to hire a fraud-designated prosecutor to get to the bottom of these issues once and for all and to right the systemic wrongs at the agency.
“I will not stand by and allow thugs overseas to rob taxpayers of their hard-earned dollars and prevent families from receiving the benefits they deserve,” said Rep. Harder. “The state itself has admitted that EDD has no centralized unit for tracking fraud, so I’m asking the DOJ to step in to protect our money from thieves and fraudsters. With billions on the line, it’s time to step up.”
The text of the letter is below and an original copy is available here.
Dear Acting Attorney General Wilkinson,
I write today urging immediate assistance to end the fraud plaguing California’s Employment Development Department (EDD) by requesting an investigation and prosecution of the international actors fraudulently accessing federal unemployment insurance funds. Now more than ever federal support is needed to protect the federal funds Congress allocated to California taxpayers and ensure these funds are not lost to international criminals.
Detecting and preventing international unemployment insurance fraud has been an ongoing problem at the EDD. Multiple reports note that the Coronavirus Aid, Relief, and Economic Security Act unemployment benefits have been fraudulently obtained by international actors ranging from Nigerian students, to crime rings out of countries including Russia, China, and Nigeria. The existing fraudulent domestic and internal cases put total unemployment insurance fraud over a staggering $11 billion in California. That’s money that has been robbed out of the hands of the California taxpayers. During a global pandemic and at a time when people rely on these funds for their livelihoods, that’s simply unacceptable.
Over the last year, the EDD has failed to prevent fraud. In fact, the California Secretary of Labor Julie A. Su stated herself that the “EDD was woefully unprepared for the unparalleled demands created by COVID-19.” I couldn’t agree more with that statement. However, the agency’s lack of fraud prevention tactics predate the pandemic. A recent state audit revealed a history of significant flaws in the agency’s fraud detection program, including many errors that could have been prevented if better safeguards were put in place by the agency. Support from the Department of Justice (DOJ) is needed to protect the California taxpayers.
Given the gravity of this serious issues, I am urging swift action from the DOJ, including providing resources such those provided to the State of Nevada, to hire a fraud-designated prosecutor to support the EDD and assist California in the identification and resolution of these international fraudulent unemployment insurance claims. Thank you for your attention to this critical matter and I look forward to your timely response.
Source: Congressman Josh Harder
