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California Unemployment Scheme Just Leaked – $11B Is Already Gone, And The State May Have Lost Another $20B
By Ben Dutka|January 27, 2021
California Unemployment Scheme Just Leaked – $11B Is Already Gone, And The State May Have Lost Another $20B

We’ve heard about many unemployment, welfare, and other assistance schemes in recent years. Such programs are unfortunately rife with wrongdoing, as these events indicate.

The latest issue has just hit the Democrat-controlled state of California — billions are apparently gone, and many more billions are currently under investigation.

Specifically, the massive amount of unemployment paid out during the pandemic is in question.

This has been a recurring issue for many states since the coronavirus epidemic struck early last year. Unemployment and other benefits were doled out at a rapid – and potentially alarming – rate.

But worse than that, it seems many of these funds might’ve been just stolen.

Such is the case in California. And now they’re going to have to scramble to figure out exactly how much money is missing.

From Fox News:

At least $11 billion has been looted from California’s coffers in an unemployment fraud scheme run rampant across the state, while another $20 billion in possible losses is still being investigated.

California Labor Secretary Julie Su told reporters in a conference call Monday that of the $114 billion the state has paid in unemployment claims during the coronavirus pandemic, 10 percent, or $11.4 billion, involves fraud and another 17 percent is under investigation.

Su added that there’s “no sugarcoating the reality.”

She says the state hasn’t had “sufficient security measures” to combat this kind of mess for a long time, and now California is paying dearly for that oversight.

Just about all the fraudulent claims were paid by the federal government via the Pandemic Unemployment Assistance Program.

This was approved by Congress to to help people who wouldn’t otherwise be eligible for aid. It includes independent contractors and other self-employed individuals.

However, this “broad eligibility” opened the door to the scheme:

Officials say the program’s broad eligibility requirements made it an easy target for criminals, including from Russia and Nigeria. In December, 21,000 prisoners scored more than $400 million from the state, including 100 prisoners on death row.

In order to stop the flow, the California Employment Development Department (EDD) froze the accounts of 1.4 million individuals relying on the assistance. Officials needed time to investigate.

At the same time, the state is way behind on claims: they’ve still got a gigantic backlog of 940,000 (as of Jan. 20).

Su finished by saying it’s “no surprise” the state was overwhelmed, due partially to “international and national criminal rings” working behind the scenes to steal away those benefits.

But whatever the reason, California will really have to work to dig themselves out of this gargantuan hole.

And it begs the question — how many other states will find major wrongdoing involving pandemic assistance money?

Key Takeaways:

  • A huge unemployment scheme hits California: $11B is gone and another $20B is under investigation.
  • Just about all the money came from the Pandemic Unemployment Assistance Program.
  • The system’s “broad eligibility” made it an easy target for criminals.

Source: Fox News

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Ben Dutka
Ben S. Dutka is a journalist, writer and editor with over two decades of experience. He has worked with three newspapers and eight online publications, and he has also won a Connecticut short story contest entitled Art as Muse, Imaginary Realms. He has a penchant for writing, rowing, reading, video games, and Objectivism.
Ben S. Dutka is a journalist, writer and editor with over two decades of experience. He has worked with three newspapers and eight online publications, and he has also won a Connecticut short story contest entitled Art as Muse, Imaginary Realms. He has a penchant for writing, rowing, reading, video games, and Objectivism.
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