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 the Senate Committee on Labor, Public Employment, and Retirement 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.
“The state has already confirmed $11 billion in fraud, with potentially more than $31 billion being placed on the backs of taxpayers. SB 39 is a common sense measure which will safeguard against further fraudulent prisoner claims and ensure benefits are available for hardworking Californians,” said Senator Grove.
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.
Despite previous warnings, California was 1 of only 15 states that failed to cross match unemployment benefit claims with jail and prison rolls. 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.
“Cross-matching beneficiaries of unemployment benefits with state prison rolls is a commonsense step that California must take to ensure that prison inmates are not allowed to fraudulently siphon off funds designated to those most in need. California learned a hard lesson by being defrauded of 31 billion dollars largely because these basic protections on public funds were not already in place, as they are in many other states. The vote advancing this bill is an important step forward to ultimately becoming law, and today’s success is a product of the bipartisan efforts led by Senator Grove to close the floodgates of fraudulent claims that prison inmates have used to defraud California of billions of dollars,” said District Attorney Cynthia Zimmer.
SB 39 passed with a bipartisan vote of 5 to 0. The measure will next be heard by the Senate Committee on Appropriations.