Scams Resulted in COVID-19 Jobless Benefits Being Sent to Scott Peterson and Other Death Row Inmates

Scott Peterson has been out of work for a long time. That’s because he’s been on death row in California

Scott Peterson EDD

Scott Peterson has been out of work for a long time. That’s because he’s been on death row in California after being convicted of the brutal murder of his wife and unborn son. While his employment status is not in doubt, questions are now being raised about why Peterson and other death-row inmates have been approved for jobless benefits in California. With a surge in claims resulting from the COVID-19 pandemic, unscrupulous friends, family, inmates themselves, and sometimes unrelated scammers have capitalized on the opportunity to claim a staggering nearly $1 billion in improperly claimed funds.

A Scam of Epic and Devastating Proportions

Scott Peterson Trial

In what has become the biggest fraud scam in California history, hundreds of millions of dollars worth of taxpayer money have been improperly claimed by those incarcerated. Sometimes claims are made by the inmates themselves. Sometimes, by friends or family to whom they gave personal information. Other times, gangs and scammers have used the inmates’ information to claim the money on their behalf.

Per the Los Angeles Times, “Though few dispute the need for unemployment aid during an unprecedented economic downturn — and the potential need for further stimulus money — the latest allegations highlight ongoing problems with EDD that have left many questioning the agency’s ability to administer the massive number of new claims.

So far, investigations have uncovered more than $400,000 in state benefits paid to death row inmates, and more than $140 million to other incarcerated people in California’s 38 prisons, according to Sacramento County Dist. Atty. Anne Marie Schubert, who helped organize and lead a task force that uncovered the alleged dupery. In total, payments to those ineligible due to incarceration in prisons and jails could total nearly $1 billion, the prosecutors claim.”

“It Needs to Stop”

Obviously, the improper claims have a massive impact on California taxpayer money. And, in a lot of cases, the people ending up with the money are the worst of the worst.

Per the LA Times, “’The murderers and rapists and human traffickers should not be getting this money,’ said Schubert. ‘It needs to stop.’

Kern County Dist. Atty. Cynthia Zimmer, whose district has five prisons, the most of any county in California, called the scope of the scams shocking. Zimmer said her office had found about $16 million in allegedly fraudulent claims in her county alone.

‘I’ve been a prosecutor for 36 years,’ she said. ‘I have never seen fraud of this magnitude.’”

And Peterson isn’t the only high-profile killer benefiting from the scam. Peterson’s death-row neighbor, serial killer Cary Stayner, has also received jobless benefits. Stayner is convicted of murdering two women and two girls in 1999.

Scrambling to Stop the Scams

Nine district attorneys and one federal prosecutor have appealed to California Governor Gavin Newsom to assemble the resources necessary to combat the large-scale scam. Newsom, who is currently in quarantine after exposure to a COVID-19 positive person, announced Tuesday plans to launch a task force.

The LA Times shared Newsom’s statement on the task force in part; “‘Unemployment fraud across local jails and state and federal prisons is absolutely unacceptable,’ the governor said in a statement. ‘Earlier this year, I launched a strike team to expedite unemployment payments and to minimize abuse of the system. When we saw evidence of fraud in correctional facilities, I directed the Employment Development Department to review its practices and to take immediate actions to prevent fraud and to hold people accountable when fraud is not prevented.’”

It’s a Challenging Problem to Untangle

Because of the scope of the scams and the complexity of identifying the people involved, it’s a mammoth problem to solve. The LA Times reports, “EDD Director Sharon Hilliard told legislators recently that the agency had been working with federal authorities to identify and stop fraud schemes, some of which appear to be international in scope.

‘EDD investigators are busy working with national, state, and local partners to expose, identify, and prosecute offenders to the fullest extent of the law,’ the agency said in a statement last month.

It cited dozens of cases, including more than 100 people arrested by the Beverly Hills Police Department in recent months during an investigation that confiscated 200 EDD-issued debit cards potentially worth up to $4 million in benefits.

EDD officials said they had been actively participating in the investigations and took the problem seriously.

‘The EDD is dedicated to investigating suspicious activity, and we work with our local, state and federal law enforcement partners in order to protect the unemployment insurance program for California’s workers in need,’ said Loree Levy, an agency spokeswoman.”

Genuine Claimants Left Waiting

Scott Peterson Death Row

Because of the volume of the scam claims and the disorganization at the EDD, hundreds of thousands of legitimate claimants are stuck waiting for relief from their state government in California. Just under 600,000 claims are back-logged as EDD workers slowly slog through the process of verifying and approving them, although clearly the process leaves much to be desired.

According to the Los Angeles Times, “The strike team found that the EDD needed to change an internal culture that delayed approval of legitimate claims based on fears of fraud. Agency officials said at the time they believed fraud was involved in tens of thousands of claims from people who had not responded to identity verification requests.

But as claims languish and the pandemic continues to wreak havoc with the economy, prosecutors said they were frustrated by the current situation.

‘There are so many unemployed people in this state, people losing their homes, they’ve lost their livelihoods, and yet to find out there are criminals taking advantaged of this situation, it’s just so bad,’ said [El Dorado County District Attorney Vern Pierson]. ‘There are ways to prevent this.’”